Currently, I am reading my grandfather’s autobiography (he’s actually still in the process of writing it), and it’s amazing to me that the American Dream has changed dramatically in the past 60 years. The dream of owning your own home one day seemed feasible, but today that dream has become a nightmare! The housing woes and mortgage meltdown have put a massive damper on the economy. And all the uninformed people who thought they were getting the deal of the century (by getting one of those subprime loans) are probably now shrieking with resentment. I almost became one of those unfortunate people.

Two years ago (September 2005), I was looking into the real estate market. I didn’t have a down payment, but I kept hearing of this wonderful 100% financing. I was renting at the time and thought it was better to buy than throw my money in the garbage. I was determined. I started looking for homes on the Internet, picked up books at grocery stores, and even called a realtor. I had an excellent credit score and two jobs, so I thought it would be easy. Wrong!

I found a small condo and absolutely adored it. It was a small complex and reminded me of the TV show Melrose Place. I went back with family members and signed a contract on September 11th (I should have seen the red flag just by the date). The contractor was still renovating the building so closing wouldn’t be for a month or two. It seemed too easy at the time. The contractor was overly kind and said he really wanted to help me out because he remembers when he was first starting out. He had everything taken care of… inside financing, and he was even willing to take care of all my closing costs. The insider financing gentleman was a middle aged retired cop and had a trusting demeanor almost like a grandfather. Naively, I thought these people were sincere. All I had to do is sign, and they were giving me the so-called American Dream. A deal too good to be true?

Then Hurricane Wilma hit a month later and destroyed much of South Florida and of course damaged my little condo too. By Florida law, they had to fix the damage before we could close on the property. So I was playing the waiting game. And for once in my life I didn’t mind waiting. When another two months passed and I hadn’t heard from anyone (no contractor, no broker, no realtor), I started to get worried. I had put $3000 in escrow towards a deposit/down payment.

I kept calling the mortgage broker, the contractor, my really bad realtor, and never got any answers. After many failed attempts and messages, I finally received a letter in the mail saying I had to close by January 2006 or they would keep my $3000 dollars! I was insulted… I hadn’t heard from anybody, and now they were threatening me?

I finally got in touch with the insider financing mortgage company three weeks before my supposed closing date. Now they were ready to set up an appointment and finalize my mortgage, but the retired cop mortgage broker I was working with all of a sudden disappeared. I heard things like he no longer works for us, but in my heart I knew this was part of the scheme. Reel you in with the trusted grandfather and then feed you to the sharks.

Back in September I was told it would be a 3% interest rate, but when I was sitting down with the sharks in January I was seeing figures in the 9% range. The explanation was that they never locked me into an interest rate, so basically what it came down to was a property that cost $151k was going to cost me $1600 a month (including taxes, insurance, and home owners association). I almost fell out of my chair… I said, “There is no way in hell I can afford this now or a year from now.” They reassured me that I was going to be making way more money next year as I am still young and getting into a career. It’s nice to think positively, but one thing my mother always taught me was to look at the bad before the good… it’s pessimistic but usually realistic.

The only way to run from this whole ordeal and get my money back was if I couldn’t qualify. I kept asking how can I qualify for something I knew I can’t afford? But they made sure I would qualify. In desperation I was trying to seek another mortgage company, but was disappointed with the results I was getting. So I kept trying to not qualify and told them things like I lost one of my jobs and I am having a financial hardship. They didn’t seem to care.

I immediately contacted a lawyer and pleaded my case. The lawyer looked at me despairingly and said, “I am sorry, but this contract is written entirely in the contractor’s favor and there is nothing you can do.” I was devastated and outraged. And after receiving another threatening letter from the con artist… errr... I mean contractor, I obliged and allowed them to keep the $3000 dollars I had worked very hard for.

I thought how many other people had lost money the way I had. And as foreclosures increase not only in my own backyard, but across the nation, I am starting to see there were thousands of people in my predicament or worse. I am now thankful to have lost $3000 and not a home. Common sense and pessimism saved me, but I saw how easy it was to be trapped and talked into something. I remember the best selling point the mortgage broker used: You will be making more money next year, so when the interest rates adjust so will your income. It’s almost pumping people up to believe they will be better off the following year, but nobody knows what the future holds. I mean… how many people really saw this housing/mortgage/banking crisis coming?