Mortgage Meltdown: The Gardner Family
Joann Gardner admits to feeling overwhelmed. Along with providing care each day for her elderly parents and 4-year-old great-niece, she worries about losing the family home. “I don’t know from one day to the next what’s going to happen,” she said.
Gardner, an outgoing woman with a warm demeanor, seems increasingly deflated as the drama plays itself out. The tidy bungalow in Oakland’s Sobrante Park neighborhood came to the brink of foreclosure twice this summer.
Both times, the courthouse auction was postponed at the last minute as a real estate agent tried to negotiate a “short sale” (selling for less than is owed on the mortgage) with the lender.
The Gardners hope to sell the house to an investor who would rent it back to them. At one point an investor seemed poised to buy it, but the deal fell through. Then the mortgage was transferred to a new servicing company, which has not taken the legal steps to initiate foreclosure.
“They switched us on up right in the middle of the foreclosure,” she said. “The new lender, Quantum, has been really pleasant. They call about once a month, and I explain the situation to them.”
The situation is that the monthly mortgage payments of $3,007 plus $355 for taxes and insurance exceed the household income.
Gardner’s parents, Johnnie and Estelle Gardner, both 87, bought the home in 1954 for $11,500. Over the years the family refinanced and took out money, until they ended up owing $454,500 on the house - which is now worth about $300,000. Joann Gardner quit her secretarial job in February to care for her parents. Now the family lives on $3,144 a month, most of it from Johnnie Gardner’s Social Security and pension from 45 years as an electrician at the Oakland Naval Supply Center.
The Gardners have not made a payment since refinancing a year ago. But money is still tight. “Every time I look around, something needs fixing, like the plumbing is backed up and the oven doesn’t work,” Joann Gardner said. “I found myself going to a food bank. I thought I was going to have to go for Thanksgiving, but my cousin gave us a turkey and ham, and the neighbors gave us some canned goods.”
John Anderson, president of Quantum Servicing Corp. in Shelton, Connecticut, said his company specializes in “nonperforming” loans - meaning those where borrowers are not making payments. “Our charge is to take a nonperforming loan and get the people back on track to pay,” he said. “Our clients (the investors who actually own the loans) do not want to take people’s houses. They want them to pay their loans.”
Anderson said the company primarily does loan modifications, that extend the length of loans, reduce the interest rate, and/or spread out the past-due amounts over the life of the loans.
Joe Caravetta, vice president of Quantum, said the Gardners’ house is not an active foreclosure, meaning no auction is pending. “We don’t want to foreclose unless there are no other options,” he said. “We would be willing to entertain any loss mitigation that would prove fruitful.”
He said Quantum would contact the Gardners to see if there are adjustments that could be made to make the loan work for them. “We will be as creative as we can be within reason,” he said.
Meanwhile, Johnnie Gardner has deteriorated physically and mentally in the past few months. “Daddy, he’s starting to get the dementia,” Joann Gardner said sadly. “He inquired about my sister, who’s been deceased 25 years; he wanted to know when she was coming over.”
Estelle Gardner already has Alzheimer’s. “I want to go back to work so bad, but I don’t have nobody to watch them,” Joann Gardner said. “I could work at night when I know they’re asleep.” She’d like to be a toll collector or do customer service at the nearby Oakland International Airport.
Gardner has taken on still more responsibilities. Her 4-year-old great-niece, Maaiah, has been living with her for several weeks. Maaiah’s older brother, Jaron Ison, 20, also lives with the family and helps care for Joann’s parents at night and in between part-time work.
If the house is lost, assisted living might be an option for her parents, Joann said. “I want to see that my parents are situated somewhere,” she said. “I don’t know how much longer they will be on this Earth. They both are getting more scrambled by the day.”
The Gardner family
Joann Gardner, 51, stays home to care for her parents, Johnnie and Estelle Gardner, both 87, as well as her 4-year-old great niece, Maaiah.
House: Two-bedroom, Oakland, purchased in 1954 for $11,500. After many refinances, there is no more equity in the home, which is probably worth about $310,000. Mortgage payments of $3,007 plus $355 for taxes and insurance exceed the household income of $3,144.
Then: In July the Gardners were eight months in arrears. A foreclosure auction was scheduled twice and then postponed at the last minute.
Now: The family continues to live in the home without making payments. The mortgage has been transferred to a new servicer, which said it is willing to see if the loan can be modified to be affordable for the Gardners. In addition, the family has been trying to find an investor to buy the home and rent it back.
MORTGAGE MELTDOWN The Gardner Family
Carolyn Said | San Francisco Chronicle