Becoming a (Federal) Good Neighbor

On February 5th at approximately 2 pm, my favorite daughter officially became a homeowner, joining the fraternity (sorority?) of citizens who are expected to be responsible enough to pay real estate taxes. In retrospect, I would rather have a root canal than watch her go through this process again.

It certainly started off with a lot of euphoria about three months ago when she learned she had “won” a lottery to purchase a HUD foreclosure under their “Good Neighbor” program. In return for her commitment to fix up an unsalable house and live in it for three years, she could purchase it at a significant discount to its (HUD) appraised value.

I had never heard of this program before, but it seemed to have many virtues like:
- Giving a legitimate “break” to those who serve our community (e.g. teachers, firemen, police officers, etc.).
- Placing community-minded, gainfully employed people in the affected neighborhood, and
- Helping maintain/improve real estate values in the area of the foreclosed home (not to mention continuing the revenue stream in the form of taxes to help pay for those teachers, firemen, police officers, etc.)

Thus began the saga of dealing with our benevolent government. It soon became apparent I was not the only one unfamiliar with this program and its requirements. Her real estate agent (a family friend) readily admitted this and brought in a colleague with HUD experience, who promptly filled out incorrect paperwork, again and again. Not totally her fault, as she attempted to get the correct procedures from that faceless government agency (with often nameless employees – I dare you to be able to talk with the same contact twice).

My daughter was advised to approach Bank of America for her HUD financing. Remember them – the folks that received billions recently from the government? They apparently didn’t have a clue about processing the “right” kind of mortgage for this government loan – and didn’t admit it either.

Inspections were another area of frustration. During the 15 day window to back out of the deal, my daughter had an independent inspection done, plus an estimate for foundation repairs. The need for foundation repair was fairly evident because, even to my untrained eye, the house slanted in several different directions. Having received an estimate on foundation repairs, this had to be validated by a structural engineer. A recommendation was made for a particular professional by a family friend (turned out to be someone who had never personally been used before!). He came in with an approach/estimate that even the foundation repair service took moral and practical exception with (and they would have benefited from all the excess work),

Then the new lender, (who replaced the “too big to fail” bank after it failed my girl) advised her HUD would only accept an inspection from one of their “approved” people. And this had to happen immediately in order to continue the loan application process. The $600 man showed up at the duly appointed time and, miraculously, within 15 minutes the process was able to continue. Oh, yeah, this was explained as being necessary “for her protection.” I’m biting my keyboard not to comment further.

I was invited to the final walk-through two days before closing which is basically done to ascertain the house is still standing and that no one has ripped off the air conditioner (although they had taken the mailbox!). That was when the real estate associate dropped the bomb that my daughter needed an extra $5000 at closing (~45 hours away) to pay for her services (all along my daughter had been told the government would take care of real estate fees). After all the things she had encountered, it was almost a deal breaker because she did not have the money to comply (and I couldn’t help her because there are all kind rules about using your own funds). While I was fuming and muttering about calling senators, congressmen, newspaper columnists, lawyers, et.al., fortunately they reached an agreement barely hours before the scheduled closing.

So approximately 3 months after starting the process, negotiating all of the many obstacles (including several holidays) along the way, shuffling reams of paper and signing her life away countless times, she has become an official real estate tax-paying Good Neighbor for HUD. I’m very proud of her for competently dealing with the roller coaster ride. Maybe the environment she works in as a kindergarten teacher has conditioned her to deal with it better than I can.

Although it is probably just part of my DNA, but observing this whole experience has, sadly, served to make me even more wary of government programs. The problem does not lie with the ideas nor their intent – just the seemingly constant inability to smoothly implement them. It doesn’t exactly encourage me to turn over the keys to our health system.