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When Work Doesn’t Pay – The Judy Lederman Story June 5, 2010

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Judy Lederman and Her Daughter Casey.

As mentioned on today’s show, I had the privilege of meeting Judy Lederman while traveling to New York City for the Robert Kiyosaki interview.  For the Forbes article that they ran on Judy CLICK HERE. Judy was also kind enough to write us an update on her situation:

*From a letter dated May 19, 2010 in response to my 12/09 application.

Dear Mortgagor,

Chase Home Finance LLC is writing in response to your recent request regarding a loan modification on the above-referenced account.  After researching your account, we have determined that you do not qualify for a modification through the Making Home Affordable modification program or through other modification programs for the following reason: Because you are less than sixty days past due on your mortgage Loan.*

I’m a three-time loser.  Three times I have applied for help from WAMU, later Chase, to try and keep my house.  Three times, I have been denied.  The simple reason, as it was explained to me by one of Chase’s attorneys who told me that I could never quote him (oops) is that I have consistently paid my mortgage on time.  If you want us to help you, you have to stop paying your bills.

I thought by applying for the modification before I hit rock bottom I could preserve my credit rating and bail myself out.  Isn’t that what the program was supposed to do?

I come from a family that never used credit cards – that believed if you borrow money, you must pay it back.  I’ve always promptly paid my bills.  And so, somehow, after getting laid-off from my job three years ago, I have watched my bank account dwindle to practically nothing while I scramble to pay the bills. I work overtime, twice as hard making half the money, to try and stay afloat in the hopes that maybe, this time, the bank will heed and my mortgage rate would be reduced to something that keep my checking account from hitting rock bottom.  If only that were the case, I could go out there and be productive – use my business building skills to create jobs for others…

But alas, the time has finally come.  In trying to stay afloat, I’ve whittled away my savings to nothing.  I am still working – consulting jobs – but I finally made it to the bottom of the hole.  I can’t refinance – there isn’t enough income coming in.  With a 5-year interest-only ARM that is due next year, I feel like I’m in quicksand.  And the only way to save myself is to do what the lawyer said:  STOP PAYING THE MORTGAGE!  Become a debtor.  Watch my good credit rating slide into the muck!

I’ve never been one to take bailouts.  I’ve worked since I was a teenager.  I kept working while having and raising three-children and I always proudly brought home a paycheck.  After my divorce, I never qualified for Alimony, nor did I ask for it – I was happy to be employable and eager to work for my wages.

I guess I don’t understand how a bank – or a government – creates a situation that makes it impossible to do anything BUT sink.  The life preserver does no good to a victim who is lying on the bottom of the ocean.  The only way to qualify for help is to be so deeply in debt that you will never, ever climb out.

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