Rip Brown, 48, grew up in New England and, with a college degree and MBA, began a career in commercial banking in the 1980s. By the 1990s, married with two children, he was building a solid resume as a corporate controller for several Fortune 500 companies, including W.R. Grace and Wal-Mart. In 2005, he set up a global consulting business with clients in Europe and Mexico. But Brown’s fortunes shifted. In 2004, to pay for his daughters’ education, he borrowed against the rising value of the Boston home he bought in 2002. By 2006, unable to cover the cost of running his business, he declared bankruptcy but continued to pay on the house. In 2007, his mortgage rate jumped three percentage points to 11 percent, more than he could afford. Hoping to work out more affordable terms with the bank, he took on a long-term project in New York last year. In November, Brown’s client prematurely terminated the project after the banking crisis shut their credit line. Out of work since, his 18-month struggle to save his home finally ended in foreclosure on Jan. 29 at 2 p.m. These are excerpts from a diary Brown kept:
Jan. 20, 2009 Inauguration Day - Looking for a job
So President Obama gets to start the year off with a job. For those of us who start it unemployed, we are truly envious. Just to have a place of work to go to every day, knowing when you go home at night you’ll receive a paycheck you can use to live on. What’s that song they sing in "Cabaret"? Money makes the world go round, the world go round … and so on.
With only $400 of cash left in my pocket, my job prospects in this second great depression are really dampening my morale. Especially here in New York, what with all these unemployed bankers to compete with now. The job market is downright bleak, jobs at my executive level too far and too few. Friends and family, with all their good intentions, advise me to apply for the abundance of jobs below my level of skill and experience. But they don’t understand, I could not possibly apply without grossly misrepresenting myself. I’m just too overqualified for the vast number of basic accounting and finance positions out there. … I may just have to rewrite my resume a dozen different ways: As an accountant who makes $50,000, as an unskilled laborer without a college degree. Perhaps I’m better off applying for a job as a pizza delivery boy.
And what now of America’s aging baby boom generation? If we all have to continue to work past retirement age? The future belongs to the young, yes, but which generation will win the battle in corporate America today? Will they prefer to staff their middle management with young, up-and-coming sharp malleable executives, or with more experienced, older bodies more set in their ways? And how will the generations behind all of us feel about that, our taking away, denying, or at least delaying the higher paying jobs for them?
Jan. 22, 2009 - The feel of shame
I’ve been lingering on the last words spoken between myself and my daughter on the phone last night. She wanted to know about my bankruptcy. I was not prepared to give her the simple answers she sought, and felt a deep regret.
Nancy had just watched a 2004 documentary about credit cards, and it scared her to think how much power banks have over credit card holders who they need in order to stay profitable, yet against whom they apply tremendous amounts of pressure (and some would say unfair advantage) once the money is borrowed. It’s a vicious cycle, I told her, not wanting her to misunderstand or romanticize my own fall into the credit death spiral. Having taken on bankruptcy is nothing I am proud of, the price for it greater beyond money, when one counts the psychological cost. … And now, too, I will be losing my house.
Today is another day I look to stay busy, keep my spirits positive. Nancy called in again, this time from a health clinic. She was with her mother trying to sort it all out. She’s a college student in New York, no longer a resident of Massachusetts. She needs to be treated, but the clinic was asking who was going to pay for it and how. Nancy has no insurance — another story. She put her mother on the phone, and that opened another vulnerable spot.
Nancy’s mother asked if I was working again, and I said no, still very few leads. She asked what was I going to do about it, and I said keep looking. I have enough savings for to live on for one more month, but that’s about it — I need to start visiting the food pantries soon. Another angst for her — she knows that means I can’t send her the girl’s child support for a few months, maybe longer. I am most fortunate — she’s been very understanding about that. Of course the unspoken expectation is that when the times are once again good, I’ll make up for the shortfall, as I’ve done before between jobs. I also told her the bank finally decided on a date to foreclose on my house: Jan. 29. My time for saving my home is up.
I look for work every day and, if nothing, find things to keep myself busy, like cleaning my apartment or reading, so as not to turn to drink. It is sobering to think of the fine line separating two possible futures right now. One possibility: To secure a job in the next 30 days and go on, more careful with my pennies than ever before, save against a future calamity. Or two: My last pennies trickle out of my piggy bank like the last sands of an hourglass. The final blow to pride a working man feels is when the labor of his own hands and mind have no more economic value to offer the world.
Boston, Jan. 31 - The auction
Few people showed up for the foreclosure today. The sky was sunny, the air freezing, the snow on the ground no less than two feet. The auction took place in my driveway in front of the house. Besides me, the bank rep and the auctioneer, there were a few of my neighbors who came to watch, and a few young men dressed warmly, blabbing on cell phones the whole time, as if they were reporting the day's stock quotes. Only one man, a transportation employee wearing his phosphorescent red vest from work, came with a $10,000 certified check to bid. He appeared the oldest present, perhaps nearing retirement, looking to buy low.
The bidding begins at $400,000, the last appraised value on the property in 2006. My home is a small, three-room colonial on two floors, about 1,600 square feet of total living space. Built in 1960 upon Met Hill in the Roslindale neighborhood of Boston, it still has an unobstructed view of the cityscape — the Prudential building and John Hancock and the rest of the downtown skyscrapers are easily visible miles away above forest. If it were summer, the lights of Fenway stadium on game days would be visibly reflecting into the night sky.
The auctioneer reads the auction notice, which I already received and read last week (served on me by the sheriff’s office). It’s about three pages of legalese. While everyone ignores the reading and waits for the main event, I chat with a stranger at my side. If only Obama could have done something for me sooner, bought me more time, I say. The bystander, wearing a local union jacket, keeps warm behind his coat collar and black Bruins beanie. Hey, he says, a loan is a loan and if it can’t be repaid the owner has no right to ... he shuts up suddenly, realizing he’s speaking to the owner of the house. I say, hey, I’m an independent contractor who lost my job in the fall when the bank cut off credit to my client. As a freelancer I have no right to unemployment, no health insurance, and if there’s anything I can do to save my house. ... He stares ahead waiting for the auction to begin, and I shut up.
So the bidding begins. Nobody is allowed inside the property, and that makes it hard to really fathom the true value. Receiving no response to the first asking price, the auctioneer drops to $200,000; the bank rep immediately bids $210,000. All in a matter of minutes in rapid succession the man in the phosphorescent vest bids $211,000, the bank $215,000, the man $216,000, and so on until the bank bids $230,000. Then everyone waits for the man in the phosphorescent vest to decide if he’ll continue to compete.
He does not. Probably reached his predisposed limit. I think, God knows he came ready to buy, but he’s no professional investor, and though he’s tempted, so very tempted to continue, he’s probably wondering like the rest of us, where will this end. It remains quiet in the chilly air. The auctioneer makes it official with the words “Sold!” and the bank buys the property from itself for $230,000. Just like that, the end of a horse race or something, the crowd of cell phone users flips their mobiles closed, wave goodbye to the bank rep (they must follow him around like pilot fish on a great white whale, I imagine) then all disappear. Likely representing real estate companies or investors, they will show up at the next auction in half an hour to track what price properties are going for. I am left alone with the bank rep and auctioneer for a few minutes.
The auctioneer (the only woman present) and bank rep are loosened up and friendlier now, and the two share with me what they are seeing out there. Auctions more frequent, few if any buyers, banks more often than not buying back the properties and sitting on them. Left empty in this part of the country in winter, pipes burst and freeze. Banks aren’t prepared to care. Why is that? I think. As a former banker who witnessed the mortgage meltdown in the '80s, I think there’s got to be fellows on the inside of these institutions who know what they should be doing. But the people at the top aren’t listening. And Rome under their watch continues to burn.
In Boston I am fortunate. No sheriff is present to unload my property on the street. No locks are changed. I find relief to know that the rights of a former owner after foreclosure in Massachusetts are protected by due process. Sometime in the near future, the bank will send me a NOTICE TO QUIT. I will have 30 days to contest, then a court date (likely in 30 more days) will be set. I could tell the judge I lost my job and cannot honor my commitment to the bank. That judge could choose to give me more time to stay on the premises. Better for me; more time to see if Obama comes through with a plan for the homeowners (sorry, union man). Perhaps that is better for the bank as well. Pipes won’t freeze this winter, not in my house. But my savings are running out. I need a job.
Cash for keys
The Cash for Keys Program is offered to each occupant regardless if former owner, relative, or tenant. In regards to multi-units, the Cash for Keys Relocation Program is to be offered to each occupied unit. Should the property be occupied by vagrants please contact this office immediately…
I am such a sellout. After vowing to hold onto my home at all costs, for as long as I can, in order that some last-minute miracle will occur and I’ll save it victoriously, the mortgage bank who bought it back at auction waved money in my face today in the guise of a local agent named Tyrone: $2,700 to vacate in 30 days. I just returned my new BlackBerry back for cash, but that alone will not be sufficient to cover my monthly living costs back in New York. I can’t afford the luxury of fighting for more time. I’m just no longer in a strong position to do that anymore.
Wary of the offer, I call the company’s head national office, and discover Tyrone is legit after all. He’s a local player representing a national asset management company, who the banks have hired to empty, hold and move the thousands of homes they are now foreclosing upon in such high volume these days. With this company’s help, I conjecture that the banks will not wish to sell my home below their own investment in it, will instead prefer to package my home and others as ‘bad assets,’ then sell them to the government as some sort of junk bond, recoup the best return on their investment they could possibly hope for right now, from the federal government bailout bill.
Feb. 26, 2009 - The eviction
I've just spent a very difficult day emptying the contents of my house in Boston, deciding what to sell, what to keep, what to throw out. Then the saying of goodbyes — last conversations with neighbors, putting out with some of their help an enormous amount of 'stuff' for trash pickup tomorrow morning.
In a shoebox I find love letters between myself and my ex-wife, sent when we were separated and missing each other dearly. I keep those. I sold the fridge for $150, the washer-dryer for $250. I kept the dining room table and beds — anything I can use in my smaller apartment back in Queens. Still, a lot I end up throwing away.
I give three air conditioners away, two computers, two stereos, one microwave — those are the grand prizes. The rest of my ‘stuff’ sits out on the street waiting for the scavengers who will walk by on my busy street. A sofa, coffee table, unmatched chairs go quickly.
A Haitian mother stops with her young son, and I answer a few questions for her. She takes the bagful of kitchen utensils, and her son the slightly deflated soccer ball and a jigsaw puzzle of American presidents. A Slavic immigrant stops and picks through a box of tools — I stare intently to see what he takes — a chisel, a cross ruler, some screw drivers and drill bits. I am making him uncomfortable staring so I walk away. To let go of this all is much harder then I realized.
But wait, place the emotions aside, time for a reality check. I moved to New York a year ago. My best job prospects are still there, despite the hard hits taken in job losses in the financial services. My daughters are now grown up, the oldest is in college already and the youngest will be there next year. Why is it that I still feel I need to keep an address in Boston anyway? Does it have anything to do with the fact that this is the city of my grandfather who grew up here? Is it because this house I am losing to foreclosure is just seven blocks away from where my daughters live with their mother — in a house I bought with her when we were first married?
Tomorrow I drive away from Boston, not a business trip but forever. It's the first time since 1975 when I moved here with my mother to the city of her family —first time since I was 15 that I shall not have a place within the city limits to call home.
A great generational and personal loss I feel right now. I am fortunate that losing my home will not affect me as hard as it will many who have lost their jobs and who have dependents living with them. Nevertheless it hurts all the same.