(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 seventh in a series on one family's struggle.)
SKOKIE, Ill., June 1 (UPI) -- Fred and I applied for refinancing on our house in early April, but with June starting we still don't have a firm closing date.
Throughout March, while awaiting the parameters of the Obama stimulus package, we made friends with our loan officer. He told us about being on the receiving end of harrowing hard-luck stories. He said his company had not hired more personnel despite the increased load, but although he was overworked, he was thrilled to have a job and be able to earn overtime.
After all the hype, the stimulus package turned out to be a bit of a dud. Rumors of lowered interest rates coupled with extensions of 30-year mortgages to 35 or even 40 years didn't pan out. The monthly savings would have been enormous if they had. Lengthening the term of the loan wouldn't have bothered us: We never expected to own this house outright and we don't mind if we never get to have a mortgage-burning party.
Still, we got a lower interest rate, which does afford us some relief and holds out hope for a lot of other people.
Mortgage companies must be inundated with applications from those who are desperate like us and by people who want to take advantage of highly publicized opportunities to knock a few hundred dollars off their monthly payments. Errors abound: For one couple we know, while the papers were being redrawn because the original documents provided for a too-high cash-out amount, the underwriter discovered the county used the wrong ZIP code. Because documents to be recorded must be perfect and the second error had to be corrected by the county, the couple had to come back the next day.
After submitting our application we were told to wait and a certain person would contact us, but weeks later we were told we were supposed to contact him. We left messages and finally got a callback: The refi is proceeding well and our closing will probably take place around the end of June. Because of the mortgage company's backlog, the lock on our new interest rate was extended past the customary two months.
We are guardedly relieved. We were anxious our house might appraise outside the acceptability range of our loan and we wouldn't qualify. Considering we lost our home equity line of credit due to falling comparable property values, who knows how our house might have appraised three months later?
We comfortably afforded the house until recently. We always assumed we could sell if it ever became necessary, but we never imagined such a need would be coincident with dual unemployment and lowered housing values.
We still intend to sell our house when doing so wouldn't bankrupt us and leave us unable to afford shelter. We feel sad about the prospect of leaving our home of 17 years, but we remind ourselves it's just a house.
Our family understands, more assuredly than ever, what's important in life, and a house doesn't make the list.