Sunday, March 29, 2009

Beggin and Pleadin 101 - Part 1

When you say you have no money people assume you mean "I have no money until payday" or "I have no money until my pension check or disability check comes." But for many of you and for almost two years me also, it means I HAVE NO MONEY. No cash of any kind and no cash coming. For me, I hit rock bottom when I had to borrow money from my neighbor for bread and milk. My checking account was so overdrawn I was afraid I'd be arrested if I tried to take anymore invisible money out. All I could do was watch the calendar like a dog watching a cat. Remember when you were a little kid and you thought if you went to bed and fell asleep Christmas would come sooner? I even tried that to make my cash day come faster. Having no cash in a so-called cashless society will truly make you stagger on the right side of insane. We'd maxed out every credit card. Blown through every line of credit and even done the "check under the couch cushions" number. I went from ignoring pennies to picking pennies up from the sidewalk. Until I had no cash I didn't realize that the co-pay for my monthly medication exceeded $200 a month. Fortunately, I only ran out two days before the cash arrived.

What all this has to do with beggin and pleading is that when you find yourself in a situation similar to mine there will still be bills to pay. The way you reach out to an speak with your creditors will make all the difference in agreements that are reached. It is possible to speak to the electric company or telephone company representatives without groveling or losing your soul while at the same time giving the person on the other end of the phone their due. It took many tries for me to get this right and understand its importance. You will have to accept that you need their help. You need them. They don't need you. The best advice I received was from a young woman trying to help me work out utility payments. She said "We don't have the authority to change due dates and deadlines. Always ask for a supervisor. They'r the only ones that can really help you." In Part 2 of this blog I'll tell you exactly what words to use during those conversations.

Sunday, February 8, 2009

Foreclosure Part 2 - Finding the Federal Mortgage Money

I must admit that my reluctance to write down my experiences surprises me. There was a time in my life when I couldn't stop talking about myself. In fact I couldn't stop talking about myself to the exclusion of everyone around me. At 56 things seem, at times, as if they've swung around 360 degrees. It's true what they say about aging-events from childhood grow clearer by the day while events from last week I can hardly grasp.

So here's how things have gone. The day the foreclosure papers arrived in the mail I went (as they used to say) wang dang doodle nuts! I dropped to my knees because I couldn't support my own weight and on the other hand I'm not a fainter. I had a vision of my furniture being hauled out on to the front lawn. I've lived in neighborhoods where people actually watched for eviction notices to be posted on doors so they could raid some strangers belongings. I've watched people frantically trying to hang onto their belongs while people darted in and out stealing away bits and pieces of their life. The woman would cry while the man yelled and threatened and their children watched like those wide eyes paintings. Did I mention these things never seem to happen on bright sunny days? So anyway, the process server handed me a thick envelope that basically boiled down to "GET OUT" said in legal language. One of the few things that has helped me get through the last three years of my woman-made financial nightmare is facing almost everything as if I'm doing is for someone else. In this case I was working to help someone save their home. But the gravity of what was happening, the possibility of having no where to live made it impossible to pretend it wasn't actually happening to me.

From 1995 to 2006 I was privileged to be appointed by then Governor George E. Pataki (see my homepage tab about Susan Kemp) and my primary responsible was research. A wonderful man, a Rabbi of all people, introduced me to this thing called the Internet. The only search engine was AltaVista. Everything was pure text and almost no one had an email address. It was early days but I knew this thing called the Internet could really be something. It didn't take long for the word to get out that if you needed something come to me and I'll find it on the Internet. Ten years of teaching myself how to find anything out there left me feeling truly frustrated when someone could put out information but didn't. I'd been hearing alot about how some portion of the Federal bailout money had been set aside to help people like me who'd fallen behind on their mortgages. In my case I'd had to make some hard choices. It take up to six months for review of your application for disability. While the review is ongoing you cannot make any money. Some friends have speculated that the idea is to force you into bankruptcy while you wait for a decision. I still had bills to pay while I was waiting. Electricity to keep on, fuel oil to keep me warm and medical bills, lots and lots of medical bills and co-pays to cover. Let's not even talk about the cost of medications. So I used what would have been mortgage money and I'm willing to bet I'm far from alone. It's called robbing Peter to pay Paul and if Paul's up in heaven waiting for his cash he's going to be a very rich man when I die.

Well there was no doubt about it - being three months behind on your mortgage pretty much guaranteed foreclosure. I once referred to my house as "home crap home." 20 years later I would have fought like a pit bull to keep it. I put the word out on several listservs that I wanted to know "where the cash is." Any number of non-profits were openly available to help people figure out how to create a budget or save to buy a house but where was the actual cash and why wasn't anyone talking about it openly? I've got this real problem with secrecy. The more you try to hide something from me the harder I'll search for it. Childhood issues and all that. Well a wonderful woman on one of my listservs got in touch with me and gave me the website for something called PHASES (Preserving Homeownership and Savings Education Strategy (PHASES) program.) This is not easy money but I will tell you its fair money. I've worked in the grants field for 25+ years and what has often pushed me to the edge is when you hear about an "available" grant when the truth is they already know who they're going to give the money to. PHASES is fair. They look at everything from your debt to income ratio, the reason(s) you fell behind on your mortgage payments, the application you have to complete as well as the online finance course. This is not easy money to obtain but it is obtainable.

I received a foreclosure notice a week before I was approved by PHASES. They understood the urgency of my situation. Sometimes I felt like a jockey riding a house instead of a horse to the finish line. But they did get me to the finish line. I had to make a commitment to pay the mortgage on time from that point on and check in on a quarterly basis with my budget to show I'm keeping on the straight and narrow. I was approved for social security disability just before Christmas and got my pension check started to. My husband found a job that meets our need for him to be available during the day to take care of me. I've been reading alot about the good people who don't get the happy ending. Believe me I know how lucky I am. I'm trying to make myself as available as possible to help people facing possible foreclosure.

Having just emerged from the foreclosure process I know how truly desperate you can get to find a way to keep your home. It seems like there are signs everywhere - in the ground and on telephone poles - telling you that, if you call the phone number they could help you keep your home. In New York State such "help" requires entering into a contract including details of services and fees. This may be true of other States also. Look carefully into each individual business's offer of assistance. Check them out with the Better Business Bureau and/or the local Chamber of Commerce or your State's Attorney General's website or office. Protect yourself. Your already going through one of the toughest times of your life. Don't let someone compound that for their own personal gain.

How To Be Poor In America -

Monday, January 26, 2009

Foreclosure - Part 1

I'm more than a little wary of blogs. They seem to range from self-indulgent (do I really need to know every single detail about your colonoscopy?) to long forgotten. I actually once saw a blog created in celebration of a child's birth. It was so long since the creator had written in it that her next entry was about the child leaving for college. I was absolutely determined not to go on and on about my personal stuff unless it helped one of the newly poor in some way. Well since I am now officially one of those screw ups (just ask anyone-they'll tell you) who brought this on myself I was served with foreclosure papers today.

My entire professional life has been spent helping people like the person I've become again. Because of starting out in my twenties needing to find those little things like food and shelter for my children. Working nights and going to college days I spent years moving from being the person in need to the person who helped the people in need. One of the proudest days of my life was when I gave the commencement address to the community college that helped me change my life. It was astonishing. In my mind my goal has always been clear - to inform the people who have the right to know where the help is, where the money is, what the people who are supposed to help them really do. In short, no secrets. For over 20 years my motto has been "No secrets." If I didn't know how something worked I dug deep until I did. I was privileged to work with the "good" politicians (and that's not an oxymoron) who felt as I did. I lived in the world of political appointments and that was OK with me. I knew the rules. When the appointment ends you pack up your bank boxes and head for home. You make other plans. I knew I was no Condoleeza Rice. Although I had a great of grants knowledge and even a few Washington connections no one was pounding on my door to get it. Still I knew when my appointment by the Governor ended I'd need an exit strategy - something to do that used 25+ years of grants knowledge. So I created my own business. I was even fortunate enough to get a U.S. Small Business Administration loan. Life was good. Two years later I had discovered one of the most important rules of running a business...just because you know how to do something doesn't mean you'll know how to run a business. I thought I could fix things by working harder, by working 16-18 hour days. I didn't realize how important marketing would be particularly I didn't know a damn thing about marketing. I also didn't know it takes anywhere from 2 to 5 years to really get a business going. I worked harder. I KNEW I could make the business work if only I could figure out how to work 24 hours a day 7 days a week. My body refused to agree.

September 2007 I had a stroke. I was lucky. With alot of physical therapy I was finally able to walk with out a brace. Since the stroke was in the occipital region of my brain my vision has been wonky and still is. I couldn't remember the words to describe things and that was frustrating as hell. The business was leaking away from me. Who wants to pay $125 an hour for a consultant that can scarcely remember their clients name? I climbed back. Six months later I was walking without the brace and remembering the name of the kitchen table which was table by the way. I picked up 5 new clients in the first quarter of 2008 alone. I knew it was going to be my year. Finally, revenue in the black, the ability to pay back bills and keep the lights on. I could start answering the telephone again without fear it was a bill collector. Wahoo!

I woke up in the intensive care unit of the local hospital two weeks later. My tiredness was actually complete respiratory failure. I had a tube down my throat for almost a week. I guess it got so bad they asked my husband that question you see on tv all the time - "What do you want us to do?" which is medical-speak for should we let her die. My husband was smart enough to know I'd come back and haunt his ass forever. Between the hospital and the rehab center (It's amazing how fast you lose the ability to walk when you're in bed for a few weeks) by the time I got home my "this is my year" was over. In grant world deadlines rule so my clients had to find other consultants to help them find and write grants. They just couldn't wait for me.

The business was over. Unfortunately this also meant the end of any kind of income. I was in big trouble. I had to choose between paying the mortgage and finding food, paying the mortgage and paying the electric bill, paying the mortgage and getting fuel oil. We didn't qualify for ANYTHING! We exceeded the income means test for every kind of aid. It got so bad that at one point we had to borrow $20 from our neighbor. We started going to the food bank but since I'd previously worked for the soup kitchen I just couldn't bring myself to go there to eat. I was so ashamed of having gone from overseeing non-profit organizations to needing their help once again. This was not where I expected to be at 55. I wouldn't leave the house because I didn't want anyone to talk to me. The clothes that had once shown me to be a fashion plate were long gone and the elastic in my underwear was broken. I was wearing what my mother said I shouldn't get caught going to the emergency room in. I called a few friends and colleagues for money. If you're in my situation I strongly advise you not to do it. When they turn you do (and they will) you'll want to grab the nearest sharp implement and slit your wrists. You'll hope you never run into these people again. When my husband is faced with a crisis he stops eating. I take the opposite approach and gained another 20lbs.

After five months of trying to hold it all together I finally received my first pension check and was approved for disability. Money was finally going to return to my life. Unfortunately it was five months too late. I was served with a foreclosure notice yesterday. Part 2 of this blog will tell you how it turns out

Tuesday, January 20, 2009

The Newly Poor

The Face of the Newly Poor
The single hardest part of having more debt than money to pay those debts is negotiating with the people you owe money to. I believe it is an art, a skill that you will have to learn as you're forced to do it more and more. We've all heard that you should call a creditor as soon as you realize you won't be able to pay a debt on time but that action is considerably easier said than done. When you cannot pay a bill you owe you have no leverage, no tools with which you can negotiate. This leaves you open to anything from having someone speak to you condescendingly or speak to you with open rudeness. Since I started out my adult life poor I thought I knew the rules of the game. On my way "up" I accepted how I was being treated because I believed it would end one day. Never in my worst nightmares did I think I would find myself struggling in the same way financially, at 55 that I did at 25. These struggles have led to what I call the "begging and pleading" phone calls.

These painful phone calls involve my trying to explain why I cannot pay a bill on time or in full or both. The person on the other end of the phone falls into one of two categories Either they've been in my shoes or they cannot possibly imagine being in my shoes. Some were kind and willing to help me find a way to keep my lights on or my phone working. There was a wonderful woman who explained the "supervisor" system of approval and that she couldn't make adjustments to my bill but I should call back and ask for her supervisor. She also explained that this was true for practically any organization that I might call. Her advice has helped me tremendously over these difficult months. Then there are the others-professional bill collectors, in particular. It feels as if they could not even imagine being where I am financially and are fairly sure I'm probably lying to get out of sending them the money I owe. I have been verbally abused and brought to tears. I've received over 15 "robocalls" starting at 7:30AM on a Sunday and not ending until well after 8PM that night. I've come to feel that I'm being held hostage by my telephone.

I recently found myself in my cellar with a flashlight checking on how much heating oil I had left. Although my oil delivery company had done their best they just couldn’t extend themselves any further. I owed them $1000. It went down to 5 degrees here and we took turns monitoring the fuel oil level throughout the night while keeping the thermostat at 60 degrees. My daughter often says that we're all just one relative away from being homeless and I've marveled at how right she is. We borrowed the $1000 from a relative of my husband and was able to get the fuel oil we needed.

There is something frightening about people who lose the very things that the rest are fighting to achieve - particularly if it’s a career or wealth or a home. If it can happen to me it can happen to you. If it can happen to you it can happen to your families or friends. I can't tell you how often, in the face of failing health, I was asked "how I'd gotten sick." As if there was some secret I'm withholding that would help others avoid having a stroke. I have gone from being a teenage welfare mother to being appointed assistant welfare commissioner of my State, from going with my children to a soup kitchen to a six figure salary and back to getting food from the local food bank. My most recent mantra has been "oh how the mighty have fallen."

I am hopeful that our new President will help America understand, in the face of the millions of newly poor people who found themselves out of work in 2008. Poverty is not a word that should be spoken in the same sentence with the word fault. It does not demonstrate a lack of integrity. It is not due to laziness. The newly poor, by and large, did not bring this on themselves. But they are going to need a great deal of help in the face of what may initially appear to them to be insurmountable odds. It's time we put the same money and energy into helping the newly poor that we given to the banks and Wall Street firms.

Friday, January 16, 2009

Thoughts on the TARP

When I first heard about the TARP (the Troubled Asset Relief Program) I turned to my husband and said "Uh..oh. This means trouble!" I've worked implementing and managing Federal funds for 20+ years. I've done it as a private consultant and as a political appointee. The number one rule about dealing with Federal money is that first come the regulations and THEN comes the actual money. If I give you the money first there's no reason for you to pay attention to me when I start jumping up and down, demanding that you do annoying things like honor the actual reasons you're supposed to use the money I gave you. Anyone whose ever suffered through a Federal audit can attest to just how mean spirited some of those auditors can be when it comes to proving what you spent your money on. Somehow I can't imagine Citibank or the Bank of New York suffering through that type of audit a few years down the road. But I digress which I do constantly or so my husband tells me.

I've actually enjoyed reading some of the articles out there about the TARP. Everyone has an opinion, especially economists. The financial institutions (the big boys) that got money from the "first wave" of funding said they needed it to enable them to provide credit to everyone from big and small businesses to individuals needing mortgages. Congress got pretty upset when they found out the bailout funds they gave to the big banks was being used to buy other banks. Kind of like saying you need a student loan to pay your tuition but actually using the money to buy a car. People get really testy about things like that. Now if you or I pulled a switch like the banks are accused of we'd be under the jail but when you're talking about millions of dollars the rules get a little grey. These among many others are also the reasons Congress didn't want to give our new President the second part of the bailout funds - $350 billion dollars. But they relented. Personally I've been struggling financially for almost twelve months now - fighting to keep my small house out of foreclosure. A mere $5,000 would go a long way to help. Tomorrow I'll tell you about the many, many hoops I've had to jump through just to get considered for one of the Federal foreclosure prevention programs. I warned you I tend to digress.

So the bottom line on the TARP is that the President-elect is planning to impose the regulations that weren't imposed on the first $350 billion. I'm beginning to think of all this like stacking sandbags against a flood. The floodwater's keep pushing out the sandbags so we run down and redo the dam. It's too scary to even think about what happens if the auto industry, the banking industry and the housing industry don't get the money they need. But on the other hand those in the know say there just isn't enough money to go around. I really am starting to worry about what kind of debt (remember the TARP is borrowed tax money) I'm leaving for my three grandchildren to deal with.