What’s a Lesbian Parent to Do in This Housing Market?

You want a better life for your kids and family. You’re stuck in a house that you’re upside down in by $100,000 which was supposed to be your retirement fund through the equity houses are supposed to have. The problem is, you have no equity. You have no future.

In late 2003, a friend bought a 4 bedroom, 2 bath house in Las Vegas for $200,000. It was hard to find any house at that time since California investors were snatching up properties left and right. They had large initial down payments readily available so it was easy for them to qualify. They were outbidding the average person and it wasn’t easy to get a house.

It was the time to buy, right when home prices were still affordable. If your lease was up on a house rental, or you were ready to take advantage of becoming part of the American dream and buy a house to settle down, it was a good idea to act. Realtors tell you it’s a large bank account that will continually appreciate as no more land is being made, obviously, and you believe them. It’s supposed to be the truth.

So, you make an offer, and buy the house. You and your lesbian partner are so happy to finally have a house you can call your own. Things seem really good for the first couple of years. The house gets appraised for $160,000 more than you paid for it 2 years ago, and you couldn’t be happier. You take out a $60,000 home equity line of credit to either put into house upgrades or pay off bills, school loans, or whichever works out for your needs.

Then the bubble bursts in late 2006. It’s a gradual mess, only getting worse by the year, and you try to sell your house but can’t. Homes around you start to depreciate because ARM rates are adjusting to all time highs, and homeowners are starting to lose their properties. It it their fault? Are they irresponsible people?

Not necessarily the case

Medical bills, illness, divorce, or other unexpected life events can be the reason for homeowners to start having financial issues. You start working overtime or 2 jobs, cutting back where you can, just to make your house payment. You buy a car that gets better gas mileage and find cheaper childcare for your baby. You never see your older child at all, as demanding high school extracurricular activities prevent this from happening due to your new working hours.

You don’t go out to dinner, continue to wear jeans with holes in them, cancel cable TV, and keep the house at a somewhat warmer temperature than you are comfortable in. You’ve maxed out your credit cards to help pay the mortgage and ever increasing food and gas bills, along with the cost of living. Then the credit card companies up your interest rates to 32% even though you haven’t made one late payment.

Are things getting better yet? Not quite. You watch even more people abandoning their homes by walking out on them due to lenders not working with them when they can’t afford to make their payments. Your property is depreciating even more. You put a “for sale” sign in your yard and it sits there for 2 years with no one coming to look at it. Why? Your house isn’t worth nearly what you are asking for it. You just want to break even, as it can’t possibly be about the equity right now, as there is none.

What are the choices now?

It seems as though gay and lesbian parents are getting the “stick” twice fold. There is nothing that can be done about our lack of help in the system. Maybe we’ve been together for many years. Doesn’t matter… we have to file as single on our taxes. If we are lucky, we can each claim head of household on our taxes, if there is more than one child in the house. That’s about the best we can do.

Trying to get a school loan while having a really good income is getting more and more difficult. It’s not fair that they don’t look at the fact that you and your partner can’t get married legally, therefore, it looks like you have more disposable income than you actually do.  They won’t give you a loan, and you can’t go back to school to better your life.

You have no retirement left, and you’re in your late 30’s. There won’t be any social security by the time of retirement age, so this is a huge factor. Having to pay for individual health insurance, while your partner can put herself and the kids on her insurance because you live in a state that doesn’t recognize gay and lesbian relationships, is another problem. That’s another $400 out a month that married couples don’t have to spend.

No one is able to help you. So, what are the choices? File for bankruptcy? Lose your home to foreclosure? That’s great on the credit report. If you’re planning on moving to another part of Las Vegas, that’s one thing, but if you’re planning on moving out of state where foreclosure isn’t hitting so hard, it’s even worse.

So, what’s the answer here? I don’t think it’s fair that someone’s credit has to be ruined because of no fault of their own. It’s not as if these people haven’t been working hard and putting in more hours, spending less time with their children, and cutting back to pay for a house payment that they can’t sell, can’t get rid of, have no equity in, and are upside down $100,000 due to an unstable economy. The  housing market crash is a very real problem for the gay and lesbian community, and it’s forcing more and more people to go bankrupt or foreclose and destroy their high credit scores.

I guess it all comes down to what’s most important.

Credit can be repaired through time and careful tactics down the road. It’s inevitable that all people will pay the price by having unavoidably high interest rates and penalties due to their low FICO scores, but it can ease up in a few years if you prove yourself credit worthy and responsible with money.

Personally, I think having a sense of financial stability, happy family, progressive community, a valuable education, and a fresh, new start is in store. While many will disagree with me by thinking “you got yourself into this mess”, it really comes down to a matter of what’s feasible or not. One way or another, you are going to pay.

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