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Bouncing Back After Nearly Losing Her House

Faced with big financial woes during the mortgage crisis, a writer figured out how to turn lemons into lemonade

By Gini Graham Scott | March 14, 2013
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Gini Graham Scott, Ph.D. is the author of over 50 books with major publishers and 30 published by her own company, Changemakers Publishing and Writing. She has also written and produced over 50 videos through Changemakers Productions.  

I never thought I’d become a casualty of the mortgage mess. After all, I was a successful writer of more than 50 books, had many writing clients and had owned a thriving business that connected writers to publishers, agents and the film industry.

But, suddenly, in late 2010 and 2011, everything began to dry up for me.

The Economic Downturn Hits Hard

At that time, many publishers were consolidating, closing down, reducing the number of books they printed or looking to high-profile celebrities for their new titles. Simultaneously, many of my potential clients couldn’t afford to hire me due to their own financial difficulties.

Still, I felt I was in good enough financial shape to manage until things picked up. Wrong!

(MORE: Dealing With Massive Credit Card Bills)

In January 2012, although I had been making my mortgage and credit card payments regularly, my card issuers (Wells Fargo and Bank of America) slashed my available credit by $30,000 in two days. Wells Fargo cut my credit limit to $5,000 and Bank of America canceled a card with a $25,000 credit line.

That's what triggered my housing crash. I could no longer pay my mortgage, since during the downturn I'd been using my credit cards to borrow money in order to make the house payments.

Suddenly, it looked as though I could no longer keep my four-bedroom, three-story house in the Oakland Hills neighborhood of Oakland, Calif.

First a Default, Then a Paperwork Mess

 

My mortgage went into default due to missed payments and I spent about seven fruitless weeks in a paperwork nightmare, trying to file for a loan modification with Bank of America. The bank kept losing my documents, the customer service rep left and the new person didn't know anything about my situation.

(MORE: The Dirty Little Secret About Baby Boomer Debt)

Fortunately, I was able to turn things around.

I put my house on the market, figuring that if it didn't sell, my effort would show the bank's loan modification people that I was acting in good faith. But, luckily, a few days after the paperwork mess was straightened out, I managed to sell my house with the help of a real estate agent. Closing was 30 days later.

As a result of the sale, I had enough money to repay the mortgage and start renting a place.

Eventually, I turned my story and strategies into a book, Living in Limbo: From the End to New Beginnings, so I could help others facing their own housing crisis.
 
I also developed a series of spin-off projects, ranging from a script about a man who is losing it all (Suicide Party) to a Huffington Post column to a music video ("Bad Bad Banks").
 
5 Steps to Emulate if You Face a Setback
 
In addition, I took five steps to bounce back. I suggest you try to follow suit if you find yourself in a similar crunch:
 
1. I changed my mindset. As quickly as I could, I put aside my feelings of being stunned, shocked, depressed and unnerved by what had happened and began focusing on what to do about it.

2. I focused on the future rather than the past. I didn’t dwell on what I’d done wrong handling my credit and finances. Instead, I thought about what I could do differently so I’d have more clients and income.

3. I reached out to find support groups and others in a similar situation. That led me to attend a Volunteers in Oakland day, where several presenters spoke about how they, too, had been engulfed in the housing crisis.

(MORE: Should You Pay Off Your Mortgage Early?)
 
4. I began telling my story to others. Rather than concealing my experience out of shame or embarrassment, I explained it to everyone, from my hairdresser to business associates and neighbors.

I soon discovered that almost everybody I spoke to had a similar mortgage crisis story. Either they were going through it themselves or they had a family member, friend or business associate who was dealing with a default, short sale or bankruptcy or had been affected by the mortgage mess in some other way.

5. I imagined potential action-plan scenarios and prioritized them. One was to stay in my house as long as possible through a loan modification or forbearance while I got back on my feet. Another was to sell the house and move. A third was to stay in the house as long as possible without paying the mortgage and taxes (perhaps one to two years), putting away as much money as I could during that time so I could get back on my feet once I had to move.

Although I decided to stay (option one), when I quickly got an offer for my house, I went with option two, selling it and moving.

My Life Today

So how have things worked out?

Great!

I’m renting a few blocks from the ocean in San Francisco and plan to stay here for at least another year. I expect to continue renting for the foreseeable future, since it will be awhile before I can afford to buy another house. 

As the economy has improved, I have picked up new writing clients and contacts in the local transmedia and high-tech communities, which are very active. Had I still lived in Oakland, I wouldn’t have become involved in those groups.

Since moving, I also wrote and produced two short films that are on YouTube, Credit Card Rap and Traffic Court Star, and two shorts I’ll use to pitch feature films: The Parking Lot and Dead No More. Plus, I sold the book Finding Funds for Your Film and TV Project, which will be published by Hal Leonard’s Limelight Editions.

My Secret: Stay Positive

After going through my housing crisis and bouncing back, my advice is that if you face a serious setback in life, try to learn what you can from it and look for opportunities that may arise as a result.

Don’t look to the past with regrets. Instead, look to the future with hope and the expectation that you’ll gain valuable insights, and perhaps newfound success, from the experience.

RELATED VIDEO: "Walking Away From a Mortgage" on The Truth About Money with Ric Edelman