I admit it: I’m a victim of the economy. But I was also a contributor to its demise. In 2006 while still married, I purchased a home with 100% financing. Wow. That was dumb. I was sold a bill of goods, a litany of “you should buy now, invest in your future, real estate is a good investment,” tag lines. I watched all the commercials for Countrywide, offering me a killer deal on 100% financing. And I bought into it. All of it. And then in 2008, I divorced. The economy tanked. My house value plummeted and I was still stuck with a mortgage from the divorce settlement. But I don’t blame my former husband. He was the smart one who said, “Take the house, please.” I, on the other hand thought, “things will get better. This has got to turn around. I’ll get a housemate. I’ll keep adding value with new landscape, a remodeled kitchen and bath. I’ll keep it up because it’s my asset. It’s not like it’s going to be a depression.” And then the rose-colored glasses came off and I was staring directly at my own debt. Ouch.
It’s no secret that I’m the Executive Director of the Santa Fe Alliance, working on local living economies, saving the economy from itself, trying to turn a huge consumer mind-set to spend local, move your money local, go green for green’s sake, eat local, act local. And yet, here I am, a victim of my own mind. I truly believed it would get better and that the work that I do would surely fix things – fast. Maybe I believed it because I HAD to believe it. Because when a friend of mine moved back to New England in 2007 and remained unemployed for two years, I believed Santa Fe was doing well. Or better, at least.
I ran into a colleague on a lazy Saturday afternoon in September. The conversation went like this: “Hey, how are you? What are you up to,” she asked, eye-balling my shopping cart filled with doormats and home goods. “I’m staging my house,” I said proudly. “For sale?” “Yes. More like unloading it. Actually, if I could just throw it off the cliff, I’d be much happier.” She laughed. And agreed.
Suddenly the American Dream of homeownership is not so interesting. In a recent NPR news story, a once-potential homeowner claimed that renting was a far better option than owning in this current economy. “Our front porch collapsed on our Milwaukee house. . . It was, like, $22,000 to replace it, just to get back to having a front porch. That’s a lot of money to get hit with just to be able to walk up to your house, your front door.”
Her husband says that when he writes his rent check every month, he thinks to himself, “This is worth every penny. . . It locks my cost in every month. I have no surprises. Utilities are included. Parking’s included. I write my check; I’m done for the month. It’s a wonderful feeling.”
I’m beginning to understand this feeling. But my feeling is connected to writing an inflated mortgage payment to a massive multi-state corporate bank, and watching my investment go nowhere. Selling my house might actually reconnect to my local economy in a meaningful way. I discovered something interesting recently in a conversation with Santa Fe Alliance member, Southwestern Title and Escrow owner, John Fox. Buyers and sellers have a choice in where they close the sale, purchase or refinance their home. When I bought my house, I wanted handholding through the process – my real estate agent was the expert. But at closing, I was asked to sign reams of paper with a pen from a title/escrow company based outside of New Mexico. I have learned now that buyers and sellers can choose to use a local title company because it means IF they sell their house, most of the fees for title insurance and closing which we pay from the transaction will stay in Santa Fe. Did you know that? I had no idea. As John Fox says, “All of the employees of Southwestern Title are based in Santa Fe. All our profits stay in Santa Fe. We all live here and want to keep the community’s engine running.” On the other hand, I can shop as local as I want to, shift my entire budget to 100% local and still not make a single dent in my mortgage issues because my mortgage is owned by a massive corporate bank.
I’m not crying, though. I’m relieved to finally admit I can’t do it anymore. Nor should I try. I can’t continue to believe that I’m building my future through homeownership. My asset management plan was not to pay “interest only” to a massive corporate bank.
When I made the decision to sell the house and talked about it out loud I met other people who are going through it too. We’re all in this mess together; we created it together. We made some bad decisions; we can make some better decisions now. We can move our money, reinvest in ourselves – our own sustainability. It’s more important to me to make sure my money goes to the locally owned businesses in this community who care about our community than to save my house. Imagine if in 5 years I buy another house and pay my mortgage to the newly formed Bank of New Mexico, owned by the State of New Mexico – a bank that might give 1% loans to farmers, and help locally owned businesses recover from this economy. That’s local. AND sustainable.
So, I’ve got a house for sale. Real cheap. Anyone interested?