Living with credit, Protecting yourself

Head in the sand doesn’t really work for those outstanding debts

Connie Prater

A headline from Michigan caught my eye this morning: “101-year-old Detroit woman evicted in foreclosure.”

The Associated Press article detailed the plight of Texana Hollis and her son, Warren. Sheriff’s deputies went to the home she has lived in for nearly six decades and put the woman and her two adult sons (ages 66 and 69) out.  Warren Hollis told WXYZ-TV that he hadn’t paid the mortgage in several years and ignored eviction notices.

I know that a growing number of people are strategically defaulting on home loans because they feel the banks and mortgage brokers unfairly marketed expensive loans to people who they knew couldn’t afford to repay them. Strategic defaulters are people who stop paying their mortgages  — not necessarily because they can’t afford the payments but because they want out of loans that have terms stacked against the borrower. From all reports, it doesn’t sound like the Hollises are strategic defaulters.

According to the AP article, the Hollises took out an adjustable rate mortgage in 2002 and owed nearly $80,000 on the home. Another report indicated the son had gotten his mother to sign the papers for a reverse mortgage so they could put a new roof on the house and pay other bills.

Here’s my problem: Why subject your elderly mother to the trauma of having her things set out on the curb? The article says that the woman was sent to the hospital for evaluation after she became disoriented. No doubt the trauma of eviction had her rattled. Her youngest son told reporters he was in charge of the finances and kept the true state of their financial affairs from his older brother and mother.

A Detroit Free Press article on the eviction indicated court officers tried to work with the family to give them time to prepare. Notices started going out in May 2011. The original eviction date was Sept. 8, but it was raining that day, so the officer put it off. They gave the family more time after they checked with the Hollis sons last week and found they still hadn’t prepared to move. They were evicted Sept. 12.

The Hollis story reminds me of advice that I hear often from credit counselors: Don’t bury your head in the sand about your financial woes. Apparently, many people don’t open their mail or ignore notices about overdue credit card bills and other loans. I call it the Scarlet O’Hara approach. “Oh, fiddle-dee. I’ll worry about that tomorrow.”

If you’re going to do that, think about the collateral damage that you may be causing to people who depend you on — an elderly parent who lives with you, your children or spouse. They would face the embarrassment and disruption caused by a “surprise” eviction or a civil judgment for a delinquent credit card bill.

The Hollises are apparently getting help now that they’ve been evicted. According to the Free Press, a city councilman has made calls to see what he can do. A neighbor offered to let them move into a rental property across the street. A nonprofit organization was working to get them back into their home. I don’t know if the Hollis sons sought help from credit counselors or others before now, but their eviction is a lesson for others. Have an exit plan for when the day comes that you either have to pay the piper or leave.

Thanks to Detroit Free Press columnist and author Mitch Albom, Hollis was able to move back into her on April 4, 2012 — six months after her eviction. Albom donated his own money and organized donations of money, supplies and labor to help renovate the woman’s home. Federal authorities had refused to allow her to move back in even after the financial problems were resolved because they said it was uninhabitable.

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  • gyoung

    I want to know about the civil jugment for a delinquent credit card bill? What happens if you stop payment on the cards due too high interest rate and monthly interest charges?