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We read the statistics about the number of home owners facing foreclosure and listen to the conventional wisdom telling us what the causes are. But no list of numbers brings home the foreclosure crisis more clearly than profiles of the people who are actually fighting to stay in their homes.

As we conducted these interviews with Americans around the country, we discovered that while there are patterns—lost jobs, failed business, illnesses, and broken marriages—each case represents a unique mix of causes.

Beware of blanket assumptions about what leads to foreclosure—such as financial mismanagement. Statistics from the National Foreclosure Mitigation Counseling Program, a housing counseling service administered by NeighborWorks America, which supports affordable housing and community revitalization efforts nationwide, paint a picture of foreclosure you might not expect.

Myth: Most people facing foreclosure overextended themselves. 
Reality: Only 6% of those counseled by NFMC cited poor budget management skills. 

Myth: It’s all the fault of ARMs.
Reality: Only 5% of those counseled by NFMC report an increase in loan payments. And fewer than half of NFMC clients said they held ARMs.

Myth: Greedy people made bad bets on investment properties.  
Reality: 82% of foreclosures have been on primary residences, not investment properties, according to a recent Center for Responsible Lending study. In fact, the main reason for default is a change in income due to a job loss, according to 58% of those counseled by NFMC.

Indeed, the loss of job and a reduction in household income are the top causes of personal residence foreclosure, says Austin A. Frye, a certified financial planner in Aventura, Fla., who’s seen such tragedies firsthand.

Read on to meet home owners with the resilience to hold on to their home or exit with as much grace as possible. In short, we hope you’ll see a side of foreclosure mere numbers can’t show.

Eva and Brandon Gibson: Double Job Loss and No Health Insurance

How does one handle the loss of a job and home, multiple moves, and unexpected expenses in just a year’s time? “With the ferocity and doggedness of a caveman hunting for the next meal,” says Brandon Gibson, 30, an IT specialist who confronted these sorts of travails after relocating with his wife, Eva, 33, to Seattle from Asheville, N.C. “As the bread winner, my approach was to go out there and kill the saber-toothed tiger.”

A year and a half after their move, in June 2007, the couple purchased a modest townhouse. In early 2009, Brandon landed a permanent job after working a string of contract positions and Eva, an administrative assistant, became pregnant.

Within two weeks of giving birth to their son, Henry, in October, Brandon was laid off while taking paternity leave. “I didn’t see it coming and was devastated,” he says. ”I thought I had finally arrived and was settling in for a long career.”

Eva resumed working in January of 2010 but the couple could ill afford the childcare required for Brandon to be able to interview. She decided to quit and stay home when she learned that her company was going to lay her and others off in March.

Moving just to find work

While applying for full-time positions all over the country, Brandon found contract employment in Seattle in February 2010. But it took about a month to start getting paid. The Gibsons not only were having to live on the vastly reduced income but also had no health insurance.

“We were new parents and couldn’t afford to take Henry to the doctor,” says Brandon. “With two car payments, the house, and living expenses, our small savings evaporated quickly,” adds Eva.

It quickly became apparent to the couple that they would have to give up their home and move. “We had an adjustable rate 80% primary mortgage and a 20% secondary one,” says Brandon, which the bank had offered as a way to avoid private mortgage insurance. “I saw I was going to miss a payment and I had never missed a bill in my life. We weren’t crazy spenders.”

In early March, Brandon got a job offer in San Diego for more than he was earning as a contract worker and the couple put the house up for sale with the help of a short sale agent. They received one offer—for $115,000 less than what they owed—which the bank accepted, and they closed in August 2010. They moved into a rental apartment in San Diego at the end of March and Brandon started his new job immediately.

Finally, a job-hunting payoff

His prior job applications had generated a flurry of interest and in mid-June Brandon accepted a new position in Lexington, Ky., with a bigger salary and full moving package.

“It was horrible getting to this point; we had no more than a month of stability for almost a year,” says Eva. “But the higher income plus the lower cost of living in Lexington meant that I could stay home with the baby and we could rent a 3,000-square-foot house for $200 a month less than we were paying for our 900-square-foot apartment in San Diego.”

Now, they’re focused on regaining their footing and are extremely grateful for their new opportunities. “If there’s anything our recent experiences have taught us,” says Eva, “it’s that it doesn’t make sense to plan too far ahead.” 

Donna Sapolin is a multimedia content consultant and developer specializing in housing and other lifestyle topics. She is the former editor-in-chief of numerous national publications including Home magazine,, and This Old House magazine. A longtime home owner, she recently downsized to a 550-square-foot coop apartment in New York City.

Maria Balisado: Divorce was the Final Straw

Tending to others is what Maria Balisado, 54, a registered nurse, does. For much of her career, she worked one hospital job during the week and another on the weekends, along the way funding several of her then-husband’s businesses and her son Vincent’s higher education. She accomplished all this from a home base that she feels helped make all her hard work possible.

“My house was not only a vital investment,” she says, “but also a critical source of self-esteem—my launch pad.”

Maria married in 1986 and five years later purchased the single-story, 4-bedroom house in Orlando, Fla. “I eventually had two mortgages,” she says. “But I always made sure to make the payments on time and was in good financial standing until 2008.”

An insurmountable chain of events

At the beginning of that year, Maria’s husband shuttered his restaurant business. They agreed to move to California where he had family. As a result, she requested a transfer from the Veterans Affairs office, for whom she had begun working, and in November rented a condo in Los Angeles. She was also paying for her husband to pursue eldercare certification training in Chicago.

But Maria soon discovered he had been having extramarital affairs and the couple decided to divorce. Upholding the Orlando home’s two mortgages while paying divorce lawyers, condo rent, and her son’s tuition began to overwhelm her.

“Throughout 2009, I was dealing with the stress of a new city, a new job, my husband’s sordid betrayal, and the loss of my marriage,” says Maria. “I experienced an extreme level of emotional turmoil and reached the brink both personally and financially.”

Recognizing that she would soon be unable to make timely payments, she requested a modification of her first mortgage from her lender in hopes of lowering her 7% interest rate. But she was told she would need three months of delinquency to qualify.

“I began to use the money I had designated for mortgage payments to pay my [divorce] lawyers and I did get behind,” says Maria. “I fell into a deep depression and was going to end it,” she says, weeping softly at the memory.

Counselors of mercy

In February, however, Maria finally began to get on the receiving end of some of the care and support she had long extended to others.

“The day I intended to take my life, I called Roger Navarro, an officer at Wingspan Portfolio Advisors, the mortgage servicing specialist that worked with her lender to help borrowers with delinquent loans,” she says. “He understood what I was intending to do and kept me on the phone so no harm would come to me.”

Together with the lender, he and his boss came up with a plan that would lower the payments on both mortgages. “They and Christina Castaneda, who handled the details of the case, saved my life,” Maria said.

To reduce the monthly payments to sustainable levels for Maria, the Wingspan team arranged a lower interest rate on her primary mortgage and a longer term on the secondary one.

Though Maria’s difficulties aren’t over—she was recently diagnosed with breast cancer and is undergoing chemotherapy—she’s confident that she will get past them and is looking forward to getting back to work.

“I think my story is one of triumph,” she says. “I have a good job and a great son who’s now in nursing school and taking care of me. And, I’m able to keep the [Orlando] home, which means so much to me. It’s my piece of the American dream—it provides me with so much comfort and a deep sense of belonging.”

Chris Malich: Double Hit Leads to the Brink

St. Joseph, Mich.-based Chris Malich, 28, is a self-described homebody. Every day he gets down on the floor of the toy-filled living room of the three-bedroom ranch he owns with his wife, Deborah, 35, and plays with their 18-month-old son, Nathan. “For me and Deborah, home is a place to spend quality time with family and friends,” he says.

But Malich’s February 2009 layoff from a mold-making job he had held since high school seriously jeopardized the couple’s ability to hang onto their cherished haven.

Although Malich got a job as a nuclear power plant security officer five months later, the period of lost income, a new lower salary, medical expenses stemming from Nathan’s bout with a respiratory illness, and other factors caused the couple to fall behind on their mortgage payments.

A home we can’t keep

“I was raised to own a home,” says Malich. “My dad always told me not to rent and to buy instead, so as soon as Deborah and I decided to get married, we went looking for a house. The situation we found ourselves in after I was laid off was absolutely devastating. Our home retained most of its value but I quickly lost hope that we’d be able to keep it.”

For help, Malich turned to the nonprofit GreenPath Debt Solutions, which negotiated lower interest rates on his credit cards and advised him to cancel them. He also requested a streamlined refinance of his 6% mortgage from his lender but was turned down given his joblessness and late payment history.

After Malich was re-employed and could show steady pay, he applied for a loan modification through the Making Home Affordable program. But that resulted in a $150 increase in his monthly mortgage payment so that the delinquency would be covered within a year.

“I felt despair,” he says. And because the Malichs initially had been late with mortgage payments, they were still going to get hit with late fees. 

A system working for home owners

“I made the extra payment for two months and then landed on an article in our local newspaper about a new federally-funded program for home owners called the Hardest-Hit Program,” Malich recalls. “I immediately called my bank and found out that they had signed on to participate. The fellow I spoke with assured me they would help me.”

As someone who had fallen behind on a mortgage due to unemployment but had found a new job, Malich met one of the program’s three possible qualifying criteria, and within three weeks his missed payments had been covered and all late charges waived.

“This program, which I describe as ‘government and banks working for the home owners,’ got us current,” he says. “And since I just received a nice raise, I can make the full payment now. Our lives are back on track and I can’t tell you what an incredible feeling that is!”

Marcia Johnson: Broken Career, Broken Marriage

Sometimes, despite our best efforts, one downturn in life can lead to a spiraling cascade. Such was the case with Johnson, 44, a Melrose Park, Ill.-based attorney, who had a thriving practice devoted to real estate and family law—until 2007. “My specialties are ironic given that I lost both my house and my husband in the same year,” she says.

House closings began to plummet in December 2006, and by the following June she was forced to shut down her firm. Next to go was the two-bedroom River Forest ranch home she shared with her husband of 13 years, his three children, and her daughter.

“At the exact time I was closing my practice, I recognized that we had insurmountable marital troubles, and my husband moved out with his kids,” she said. 

Accepting foreclosure

The house was in Johnson’s name and entirely her responsibility, and though she was re-employed by a nonprofit social services agency by September 2007, her lower salary couldn’t meet her expense load: a mortgage, a home equity loan, substantial business loans, and huge law school student debt. She tried to refinance into a lower interest rate, but was turned down by her bank.

As her stress mounted, Johnson turned to a therapist for support. “I wasn’t able to make the mortgage payments in February, March, or April of 2008 and was experiencing extreme depression,” she says. “I was afraid to go home for fear of being served with foreclosure papers. If I saw a car in front of my house, I’d drive away.”

Although she realized she would have to submit to foreclosure, letting go of her home was a painful process. In November 2008 Johnson arranged for a portable storage container to be delivered to her driveway. ”I had to fit the remains of my life into a 10-by-12 box,” she recalls.

Over the next four months, Johnson searched for a rental apartment she could afford. With the help of REALTOR® Erica Cuneen of Beyond Properties Realty Group in Oak Park, Ill.—“my angel,” says Johnson—she found an affordable place in the same school district and moved in early April 2009.

Bankruptcy and a new lease on life

Given the enormity of her debts (the bank that held the home equity loan sued her for missed payments), Johnson decided to file for bankruptcy and by December had set aside enough money to pay the legal fees. “I went into Chapter 7 and my debts are now being forgiven, apart from my student loans,” she says with a sigh of relief.

Johnson’s daughter recently graduated from high school and is attending Iowa State University in Ames, Iowa. Johnson moved nearby and has renewed hope for their future. “I’ve cleaned up everything—the foreclosure and bankruptcy are done and I’ve learned a tremendous amount,” she says.

“I don’t think about material things in the same way anymore and we live within our true means,” she says. “I give credit to the therapy I got—it made all the difference and helped me keep things together through a really trying period.”

Donna Sapolin is a multimedia content consultant and developer specializing in housing and lifestyle topics. She’s the former editor-in-chief of Home magazine,, and This Old House
Visit for more articles like this. Reprinted from with permission of the NATIONAL ASSOCIATION OF REALTORS®.
Published date on Jul. 09, 2018


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