Price change from peak: -23.4%
Jim and Christine Schell led a cushy life in the early 2000s. Jim was co-owner of a computer-software company, living with his wife in a Fowlerville, Mich., five-bedroom colonial home on more than five acres. They had a retirement plan, investments and a seemingly bright future.
But after the September 11 attacks, everything unraveled. Jim's company went belly up. The Schells could no longer afford the double-digit mortgage on the colonial and were unable to refinance because a previous divorce had left Jim with terrible credit.
They lost everything. After the house was foreclosed on, the Schells were forced to move into a trailer park.
"We never expected to be there," Jim said.
The Schells spent five years in their mobile home, working off their debt and rebuilding their lives. Last year, Jim, now an automotive quality engineer, and Christine, a medical assistant, were ready to try homeownership again. They spent hours researching foreclosed homes in Howell, Mich., a town of about 10,000 located an hour northwest of Detroit.
"When we saw places we liked, we'd drive around looking through windows," Jim said. "We did our own legwork. A lot of the homes, about 70%, were wide open so we could go in without a realtor."
The couple finally found their home: a two-story Cape Cod built in 2002 on three acres, with four bedrooms and three full bathrooms. A little softball diamond in the backyard "rounded out the country charm," Jim said.
When the Schells closed in November 2007, the house was in foreclosure and appraised at $212,000. They paid $148,000. Plus, the bank covered closing costs and property taxes - and paid for a basic remodel of the property since much of it was unfinished. The bank was willing to work with them because prices in the small town are down 6.4% in 2008 through the end of the third quarter, according to Zillow.com.
The Schells bought the house with no money down on a 7.5% FHA loan. They later refinanced to a 30-year fixed note at 6.5%; they're now refinancing again to 5.5%.
"For anybody going through the horror of foreclosure like we did, just know life does get better," Jim said. "But you've got to work twice as hard." - J.P.
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