By Tim Vandenack, Truth Staff
tvandenack@etruth.com
ELKHART -- It has its flaws.
When Terry Gonyon, wife Desiree and six of their kids moved in to the massive, two-story house on Main Street four years ago, though, they couldn't have been happier. They had been living in a two-bedroom home -- the dining room had to be converted into living quarters -- and they were frequently at each other's throats, things were so cramped.
"This house was like a godsend," Desiree said.
Then the economy turned sour, Terry's construction jobs started to wane and their monthly mortgage spiked unexpectedly, well beyond their means. They stopped making their payments, efforts to renegotiate the terms of their home loan floundered, the lender foreclosed and now, the liklihood of eviction hangs heavy.
Haylee, 22 months, naps soundly on her mother's lap as the Gonyons tell their story. Three-year-old Zachary, meanwhile, seems more bent on riding his tricycle around the airy home than anything else, his parents' protestations notwithstanding.
Broadcasting his frustration
Outside their home -- a brick fortress-like structure built in the late 1800s -- the Gonyons have put a large sign for all to see. It sits along Main Street just south of Prairie Avenue and reads:
"Government bailouts don't work/Foreclosed/We lost this home/Family with 9 children put out." For the record, the Gonyons, a blended family, have three other step-children between them who live full-time with their respective former spouses and part-time at the Main Street residence with the couple's six other kids.
The sign is Terry's shout of frustration over losing his home. It's also his fist-shake at the $700 billion bank bailout plan approved by the feds last year that doesn't seem to be doing much to help rank-and-file folks like himself.
"To date, I don't think that they've helped one single person out of foreclosures," he said. Rather, the plan, meant in part to increase liquidity in banks so they can lend to others, "was just (banks) borrowing money from the government so they could keep their cushy lifestyle."
Even so, Terry -- an independent construction worker -- admits that he isn't without fault in the drawn-out process that led to the foreclosure of the family home. Maybe he and his wife were too quick about wanting to get into the bigger house, he concedes. It's just that things were so crowded at the old place.
'Somebody lied'
Whatever the reason for the mess, when the broker overseeing the sale back in early 2005 said the inspection on the $120,000 Main Street home came out OK, the Gonyons took him at face value. Likewise, when the interest rate on their 30-year, fixed-rate mortgage finally settled out at 11.27 percent, they shrugged and went ahead with the deal. An earlier "good faith estimate" had pegged the rate at 7 percent.
After the fact, the Gonyons learned of serious structural problems identified in the inspection, which hindered their ability to get home insurance. A pricey policy was later forced on them that pushed the monthly home payment to $1,287, up from $898.
They managed, initially, but then as the economy slowed down, so did Terry's jobs, reducing the family income. By late 2007, he saw things weren't going to get any better and he contacted his lender to see about renegotiating the loan terms. Nothing came of that and he stopped making his home payments soon thereafter.
"They just absolutely refused to work with me," Terry said. The lender said pay up "or we're going to take your house."
He later sent in $7,000 to try to catch up with his late payments, but the mortgage servicer applied that money to the loan principal, keeping the overdue amount the same. He tried to negotiate again. What about a 50-year mortgage? What about forgetting what he owes and just starting from scratch? Terry just wanted that monthly payment lowered to a more manageable $600.
The lender came back with a proposal. They would lower the interest rate on the home loan from 11.27 percent to 9 percent for a year, though a portion of the overdue payments, plus interest and fees, would be applied to each monthly payment. That would actually have jacked the monthly payment up to around $1,500 and after that year, when the interest rate went back up to 11.27 percent, to around $1,800.
"The payment just kept going up each time they sent a new workout packet," Terry said.
He declined the offer and foreclosure proceedings commenced. The lender bought the home at the Elkhart County Sheriff's Department foreclosure sale in January.
'Wears a toll'
These days, Terry takes whatever construction job he can get. Desiree and her sister, Chavon Richmeier, who also lives at the home, work at a fast-food eatery here. The kids who are old enough go to school while Desiree's mother, who also lives with the family, cares for the younger children.
They're still at the house, occasionally playing indoor dodgeball, saving what they can and bracing for the day when they get booted. Desiree has scouted all the nonprofit agencies here for help, but no solid leads have materialized.
"We go to work and we wonder. Is this the day we're going to get the eviction notice on our door?" she said. "It wears a toll on you."
Almost 10 percent of homes in Elkhart and Goshen in trouble
The Gonyons' plight shows Elkhart is not immune to the housing crisis sweeping the nation.
The number of homes in or headed to foreclosure in Goshen and Elkhart rose from 6 percent of all mortgaged homes in January 2007 to 9.4 percent last December, according to First American CoreLogic, a Santa Ana, Calif., company that tracks such data.
At the same time, local realtors say that with Elkhart County's unemployment rate skyrocketing -- 18.3 percent at last check -- more families here may soon face the prospect of losing their homes.