One can say that Realtors step into people’s lives, one story at a time.  Many of my clients say I should write a book someday of the experiences I’ve had and the families I’ve met over the years.  Perhaps someday I will, but a tale that involves real estate and a woman that could be anyone’s Grandmother has captured my fascination this week.  It is the story of 90 year-old Addie Polk from Akron, Ohio.  She is someone I will never meet, but in knowing her story it has changed my perspective on big business, Congress and those in foreclosure forever.

Back in 1970, Mrs. Polk and her husband purchased the home which she continues to reside in after his passing years ago.  Back in 2004, Addie Polk took out a mortgage for $45,620 and a Home Equity Line of Credit (HELOC) for $11,380.  I can only assume that an 86 year-old woman would make such a financial move because she needed the money to survive.  Could it be that Mr. Polk was very ill prior to his passing, eating up much of their retirement funds, leaving her with very little to live on?  Or is it possible that she quite simply outlived what they had saved up all of those years ago?

Nowhere For the Common Man to Turn

Regardless of why she had to take out those funds, Addie Polk found herself with no other alternative but to cash out the equity in her home to make ends meet.  Harder times for her were just ahead, as Mrs. Polk later found herself unable to make the payments.  In 2007, Fannie Mae foreclosed upon her property.  They tried more than 30 times to serve the eviction papers upon her, but no one ever answered the door.

The Akron Sheriff’s deputies arrived at Mrs. Polk’s home on October 1, 2008 to make another attempt to evict her from the home when they heard gunshots inside.  Neighbor Robert Dillon quickly grabbed a ladder and climbed into a second story window, only to find Mrs. Polk lying on her bed in a pool of blood.  She had shot herself twice in the upper body in an attempt to commit suicide.  Downstairs, her pocketbook, life insurance policy and car keys were neatly placed so they would easily be found.

Addie Polk is now resting in a local hospital in critical condition.  Fannie Mae has issued a public statement on Friday, via spokesman Brian Faith.  He stated that the mortgage association had decided to halt action against Polk and assign the property outright to her.

“We’re going to forgive whatever outstanding balance she had on the loan and give her the house,” Faith said. “Given the circumstances, we think it’s appropriate.”

On that same fateful day Mrs. Polk shot herself, I assisted a client of mine to close on the sale of her house.  She had also been served papers from her lender, stating they wanted to begin the process of foreclosure.  Luckily for her, she was able to sell and begin her life again somewhere else.

My client hit rock bottom prior to the closing of the sale.  Her electricity had been shut off two weeks prior to closing because she didn’t have enough money to pay the bill.  On the day of closing, she had not eaten in two days and drove her car to the attorney’s office with the low fuel indicator light on the entire trip.

Some people think those who let homes go into foreclosure have a laissez-faire attitude about the process.  “Oh well, I’ll get another house” is what some outsiders think that those who lose houses in foreclosure believe.  After spending time with my client over the past few weeks and reading the story about Addie Polk, I have to tell you it isn’t.  Pride is broken and dreams become shattered.  No one chooses to go into foreclosure and it is a gut-wrenching experience for those who do go through it.

You Can’t Always Get to “Main Street” by Way of “Wall Street” But Washington Doesn’t Understand That

While those we have elected to Congress go on about how the Financial Bailout Bill will help those of us on “Main Street” by getting “Wall Street” back in business, I cannot help but think of my client or the Addie Polks of the world.  This bill won’t help them at all.  These women do not have large sums of money in stocks or mutual funds that would be affected by declining stock market values.  For Mrs. Polk, she did not have a job, so the argument that this bailout would help keep people employed wouldn’t sway her opinion either.

Try selling my client who didn’t have enough money to put gas in her car or food in her stomach on the benefits of the FDIC insurance cap being raised from $100,000 to $250,000.  The only wording in the entire bill that might help these folks is open to interpretation by lenders:  “…federal agencies to encourage loan servicers to modify mortgages by a number of means – including reducing the principal or interest rate.”  Big whoop.  They “encourage” them to modify?  How about demand or require?  They could reduce the interest rate?  By how much?  I don’t like the sounds of ”reducing the principal” part of it either.  For a quick run-down of what’s in the bill, click here.  In theory, it sounds like a nice “gimme” for the entire bill to be more palatable by the masses, but this part doesn’t seem to have any “teeth” to it, in my opinion.

I wrote to my Representatives and my Senators prior to the bill’s passing, urging them to look at other ways to get us past the crisis, as did millions of other citizens.  At one point,  Congress’ website could not process emails as it was flooded with responses from constituents.  So, I went to the Post Office and my trusty fax machine to communicate instead. 

Did Congress Even Consider That There Might be Another Way to Fix Things?

I told my representatives to look at alternatives to the bill, such as what Dave Ramsey had suggested, the “Common Sense Plan” (click here for details).  His plan had elements such as changing the existing sub-prime loans to have FHA-esque insurance (so they would be marketable securities to sell) and to re-write any delinquent mortgage more than three months past due to a 6% FIXED RATE mortgage (in addition to wiping away all late fees and legal costs), get rid of ALL golden parachutes for executives (for EXISTING AND FUTURE CEOs), change the mark to market accounting rules temporarily and remove the capital gains tax completely.

I was not alone in voicing my opinion against the rescue bill.  Resoundingly, the American Public spoke up against the financial bailout bill.  Multiple polls I saw had over 75% of the American population against it, but the bill still passed.  As this bill was being argued publicly on television, internet and newspapers everywhere, silently a $25 BILLION loan package was passed in Congress for the automotive industry.  Interesting to note, that loan package which is partially for re-tooling of lines to make alternative fuel vehicles by American automakers has not one payment due until five years from now.  I have heard that the terms of the loans can be renegotiated in five years as well, when we could have a lame-duck President in his second term of office.

Now the state of California has requested a $7 BILLION loan from the federal government to halt their own credit crisis.  I have a feeling this is the beginning of many groups, companies, state and local governments who will be looking for handouts.  Keep in mind that the money we’re lending nationally is on our backs as taxpayers.

Sure, they said we’ll MAKE money through the federal bailout, but come on now.  What they did was a federal version of getting a cash advance off of a credit card to go out and buy bad stocks in the hopes that they’ll suddenly start performing and appreciate in value.  The credit card bill will still be due in the future, but how many people really make money off of buying penny stocks?

And the Stock Market Takes a Hit After the Bill Passes

In addition, the stock market tanked again Friday, right after the Financial Bailout Bill passed the House of Representatives and the President signed off on it too.  I think we just paid for some “return favors” to CEOs of ailing financial companies who were major campaign contributors to our Congresspeople.  This bill appears to have a lot of “pork” added to it ($130 BILLION to be exact) in order for it to pass. 

Interesting that the financial “crisis” many have felt in this country for months or years without any recognition of it by their representatives suddenly has become real to those on Capitol Hill.  The timing of this “solution” couldn’t have been better for politicians, as this bill suddenly gets passed four weeks prior to election time for some members of Congress.  Why did we get nearly a TRILLION DOLLARS further in debt?  Who did it really benefit? 

I think the answer may be in my question to those politicians who keep talking about “Wall Street” and “Main Street”.  What does “Main Street” look like to those in Washington, D.C.?  I have a feeling it isn’t the kind of place where my client nor Addie Polk could live.  I think those in Congress must be confusing “Main Street” with “Easy Street”, where they apparently have taken up residence, funded by our taxpayer dollars and passing insane bills like the Financial Bailout. 

For the record, here are how our South Carolina representatives voted for the bill:

Barrett – voted FOR spending $830 BILLION with the Financial Bailout Bill

Brown – voted FOR spending $830 BILLION with the Financial Bailout Bill

Clyburn – voted FOR spending $830 BILLION with the Financial Bailout Bill

Graham – voted FOR spending $830 BILLION with the Financial Bailout Bill

Inglis – voted FOR spending $830 BILLION with the Financial Bailout Bill

Spratt – voted FOR spending $830 BILLION with the Financial Bailout Bill

Wilson – voted FOR spending $830 BILLION with the Financial Bailout Bill

The only South Carolina representative who listened to his constituents was JIM DEMINT.  DeMint voted AGAINST the bill.  They have cast their votes and it will soon be time for us to cast ours, come November 4th!

Your “No Bull” Realtor,

Kathy Smith
Russell & Jeffcoat Realtors, Inc.
(888) 808-4Moo ext. 0
(803) 781-5729
http://www.kathy.smith.net/

To read more of Mrs. Addie Polk’s story, click here.

To read about what’s in the Financial Bailout Bill, click here.