Part 1 – Dealing with the rubble of the housing market disaster
In June 2006 my husband lost his job of 7 ½ years at a hospital in Florida after the hospital sold to another organization. My husband’s services were contracted for through his employer, and the statement was made by the hospital’s new administration after the purchase that they did not use contract services, but preferred to work from within.
My husband met with his company’s CFO and asked if he should be out looking for another job or whether they would place him in a new facility should the contract be cancelled. He was told not to worry, that the contract would not be cancelled, but even if it was, the company would take care of our family. Over the months the tensions seemed to mount, so my husband approached his CFO two more times, both times receiving reassurance that he had nothing to worry about. My husband is an extremely dedicated employee and hard worker, so he set his mind to staying focused and doing the best job he could possibly do.
But, the contract WAS cancelled and his company did NOT take care of us. They simply informed us that they had no where else to place him and provided our family with a 6-week severance package. My husband works in a specialized field for which jobs are not easily found. The standard severance package for his position, combined with years of service, would normally be between 3 to 6 months. He hit the pavement running and interviewed for positions in Seattle, Delaware and two locations in Colorado before accepting a job in Colorado Springs.
By the time my husband was offered his new job, we had only two weeks to pack, put our house in Florida up for sale, and move all the way across the country - away from our children, grandchildren, family, church, and friends of 15 years.
After settling into Colorado, we quickly found a rental home figuring we would rent for a couple of months until our house sold in Florida. Of course, the housing market crashed in Florida shortly afterwards and our city in particular. It currently has one of the highest foreclosure rates in the country and it will be years before the excess inventory constructed during the “building boom” has been sold off.
We watched the value of our home plummet from approximately $490,000 to $245,000 at present, if we are lucky. From August 2006 until May 2007 we had fewer than 10 potential buyers come through our house and no one made an offer. In the meantime, we were paying for our rental home and all the expenses associated with both homes in Colorado and Florida.
In the spring of 2007 we decided to take the Florida house off the market and try to rent it. The house rented in late June 2007, but the tenants were unable to make timely and/or regular payments and abandoned the house in February 2008, leaving a great deal of damage.
As all of this was happening we were approached by our landlord in Colorado and told that due to the discovery of a terminal illness, he was selling all of his rental properties. We were given the first opportunity to buy our rental house – the alternative being we had to move at the end of our lease. Though stretched to our limit financially, up to this point we had been able to keep all of our bills current and had good credit. To move to another rental home would have required new deposits, etc., that we simply didn’t have. We started to inquire about a home loan and found that we qualified for a low interest traditional loan. Our Landlord made it possible for us to purchase our home in Colorado Springs with no money down and at a monthly rate that was just a little more than our rent.
After cleaning and repairing our Florida home we began trying to rent or sell the property again… nothing. (BTW, it cost nearly $500 every 10 days to run an ad in the local paper.) By June 2008 we had exhausted all savings and other means to maintain two households in two separate states. Nearly two years after moving to Colorado Springs we had to make the very difficult decision to walk through the steps necessary to apply for a short sale.
Now, 9 months later, we have been approved for a short sale, but one opportunity has already fallen-through as a result of the amount of time it has taken for the mortgage holder to perform its necessary due-diligence. I could easily get side-tracked writing about the “non-motivation” of our bank since receiving its bailout money, but that is for another time.
The bottom line is that the value of our home is not the only thing that has plummeted. Now that we are in the middle of a short-sale, our credit score has also plummeted from the high 700’s to the low 500’s. We really had no choice in the end so it is useless to cry over something that cannot be changed. Instead I have to adapt.
I am now a female, small business owner with a bad credit score. In order to grow my business (or stay IN business) I need to upgrade my software and computer but do not have the funds. I am hoping to take advantage of new incentives offered by the Small Business Administration to businesses that have had their credit injured due to the recession.
Follow me as I walk through the steps of applying for a small SBA loan. I’m curious as to whether the incentives are real or just talk.
In Part 2, I will give a recap of the current incentives and explain why I feel my buiness should qualify.
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Related info: As the economy has declined it has become more important for me as a small business owner to make getting paid as easy as possible! I have found cardpay.net to be an excellent, trustworthy merchant account provider. I also received a free credit card machine as part of the package. This really helped with start-up costs.
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