Recession Diary: Bank turns Scrooge

SKOKIE, Ill., April 20 (UPI) -- The recession hit us last autumn. We didn't know, however, just how disastrous things would get until -- in an instant -- we had no money.

In early March, we tried to transfer funds from our home equity credit line to pay a bill. There was no money available. Our lender had reappraised our house, depreciating the value by more than $100,000, and wiping out the money that would have carried us for at least a year.

When my husband learned in mid-November his last day of work would be Dec. 31, he wasn't too worried. He'd always enjoyed long-lasting jobs with easy transitions and had never experienced unemployment. He was shocked when he didn't get another position open at his company.

As December wore on with no prospects, we tightened our belts.

Like most middle-class families, we'd tried to do everything right. We'd bought into the American Dream. We hadn't been affected by past recessions.

We purchased our house in north suburban Chicago 17 years ago, when our youngest was 2 years old. It was perfect for us -- comfortable in size and layout for a family of five. We have lived and loved joyfully here. Our home has been a favorite gathering place for our kids and their friends, and we hope someday it will be the same for our grandchildren and their buddies.

Just before my husband's layoff, we'd started living on the edge of our means. Although we'd never incurred debt and always paid our monthly bills, we'd begun to dip occasionally into the home equity line to pay those bills. We'd reassured each other this wouldn't go on long. Of course I'd work again soon. During our dual unemployment, however, we relied primarily on that equity credit line.

Now, with no jobs or equity line funds, we'll have only my husband's pension from another company where he'd worked for 20 years and his unemployment checks, which are greatly diminished because I had resigned from my last teaching job.

We sat stupefied for a while, unable to utter the words characterizing our now-desperate situation: bankruptcy, foreclosure, homelessness, destitution. We both felt foolish -- we should have glanced up from our job searches, focused on nose-diving housing values, examined the terms of our loan agreement and yanked the remaining funds before the lender could. But who'd ever think of something like that? We phoned several friends with similar loans to give them a heads-up.

We were frantic; what to do first? Call the mortgage lender (we might be eligible for refinancing under President Obama's stimulus package -- but that or other options wouldn't lower our payments enough); negotiate payment plans for bills as yet unpaid that month; put as many college loans as possible on three-year deferment; implement austerity measures (absolute necessities only -- cancel the few subscriptions to which we'd still clung, draft a new budget); turn the heat down to 58 degrees where it'll never kick on; eat little.

It hasn't been all bad, though. Our friends and relatives have come up with creative ways to buoy our sanity, including more invitations to dinner than we've ever had! Stay tuned.

(Editor's note: Unlike past recessions, the current downturn has taken a significant toll on sectors of the economy virtually unscathed by earlier economic crises. This is the first installment of one middle-class family's struggle.)