Seeing foreclosures and evictions happening right and left makes people feel vulnerable.  They identify with the people having to move, and it makes them feel more and more nervous about their own personal security.  While I feel for people who have to go through the pain and humiliation of a foreclosure and eviction, I can’t help thinking that in a majority of cases, no one in this was entirely innocent and without blame.

Before I went to law school, I worked for a small law firm who represented a mortgage broker and several apartment complexes.  We did foreclosures and evictions all the time.

Mortgage companies, on the whole, want people to pay them the money they lent them.  They want to work things out.  Because after a foreclosure, the bank doesn’t have the money its owed, so it’s unhappy, and on top of it, it gets saddled with a property they have to try to maintain and try to sell, usually at a substantially lower sum.  The bank doesn’t win, it only cuts its losses.  And Banks tend to be inexpert property managers, so this is a real pain in the tush for them.

Similarly, when someone gets way behind on their rent, the landlord is in trouble as well.  The rent goes to pay the Landlord’s mortgage, and to put a bit of money aside to pay for repairs and upkeep.  Every time someone misses a rent payment, that effects the landlord’s cash flow.

We all assume the landlord has enough money to pay the mortgage regardless, but most likely not.  He/She has to have enough in reserve for those times apartments turn over, can’t be rented right away, and the like.  So when renters don’t pay, there’s a process that tries to get them to pay before the landlord can start eviction proceedings.  The landlord’s goal is to get the non-payers out and someone else in as fast as possible, to stop bleeding cash him/herself on a monthly basis.

The Big, Mean Mortgage Company and the Big Mean Landlord are easy portrayals to paint and buy into when you are the one being evicted.  You are just struggling to make ends meet, right?  Well, when you don’t pay your bills, you are causing someone else pain.  You are not living up to your responsibilities and expectations, and are instead, causing those very same problems for someone else.

Which brings me to this point:  an eviction or mortgage foreclosure rarely comes as a surprise.  People do lose jobs.  But frequently, the writing has been on the wall for a while, and you should have been thinking about back up plans long before the pink slip arrives.  If you can’t pay your mortgage one month, can you make a partial payment?  Can you contact your mortgage company and talk to them about it?  You’ll fare much better if you head off any problems sooner rather than later.

Student loans have hardship forbearances available.  You can contact your student loan company, fill out a bunch of forms, and if you qualify, they will frequently defer payments while you get a new job- it’s usually six months, and you have to take responsibility to get your life back on during that period, but you can put your payments on hold.  Other creditors do the same thing.

Why do they do this?  In the end, everyone is better off if people meet their obligations, rather than defaulting and walking away from them.  The electric company, utilities and the like will work with you.  There are programs that will help keep your bills under control and level out payments.

But all of this requires people to confront uncomfortable situations that involve admitting mistakes and failures.  There’s an interesting book out there called “Mistakes Were Made (but not be me):Why We Justify Foolish Beliefs, Bad Decisions, and Hurtful Acts” by Carol Tavris and Elliot Aronson.  It helps explain why people make so many bad decisions, and  much of it deals with cognitive dissonance and the fear/inability for people to admit screwing up- It’s humiliating, but in order to improve any situation, you have to acknowledge it and solve the problem at hand- get a plan, and then execute.  Being mired in self-pity or doing an ostrich- stick-your-head-in-the-sand and hope it all goes away will only compound the misery.

The only way to get out of your problems, and the Country’s problems, for that matter, is to stop the cycle of denial and address the problem at hand.  The Country has been on a financial bender for too long, and all of us going along for the ride- now we all need the twelve step program to recovery- the financial equivalent of Betty Ford.  We may not even have hit the bottom yet, but for those who are, or may be headed that way, try to take steps to intervene before that bottom gets too ugly.  Deal with it like you might deal with any other addiction, and start with admitting there’s a problem, that you are out of control, and start to seek help to get yourself out of it- because no one else can really do that work for you but you.