Five years ago the New York Times profiled me about the work I was doing flipping real estate in Greene County, New York. After working many years in show business, I discovered I had a knack for renovating a house. I’d work on one property at a time, buying modest buildings at low cost, doing all the work myself and then reselling them. Again, at reasonable prices. With the profit from one, I would buy another and start the process over. The three projects I completed sold within days of going on the market at or near the asking prices. The work was creative and challenging and I was making a living, if not a fortune.
When the Times piece came out, I was about to begin work on a nondescript tract house that I eventually transformed into a mid-century dream. “Palm Springs in the Catskills,” was how I planned to headline the listing. For $190,000--furnished--this would be the bargain of the year.
I hoped to get the house on the market by October 1, and worked ferociously throughout summer 2008 to meet that deadline. Early on the morning of September 15, I tuned my radio to NPR, and, as I applied stain to the geometric room divider I had constructed, listened to the news of Lehman Brothers’ collapse. I was mildly intrigued by this but in an abstract way; after all, my track record turning over properties was stellar and the market in my area was wonderfully robust. Really, how could this possibly affect me?
The house went on the market September 29. A mere smattering of prospective buyers came to view it, and I never received a single offer. Throughout that winter I watched my financial situation evolve from stable to precarious to hopeless. One gray day in early spring 2009, I could no longer deny the fact that if I sold everything I owned, I still wouldn’t be able to pay my debts. There’s a word for that: insolvent.
No tears for me, though! I’m resilient. I live a simple life and I knew bankruptcy wouldn’t affect my day-to-day existence in any profound way. In the meantime, I was broke and depressed and needed a job. Friends who ran a small hotel on the Caribbean island of Saba had invited me to stay with them that summer, provided I helped with a bit of renovation. That would take my mind off things temporarily. Until then I found a part-time position at an HIV community center in Albany, and I worked there before leaving for the Caribbean. It paid little more than gas money but did wonders for my spirit. Summer on Saba paid nothing but did wonders for my tan line.
Back from my tropical sojourn, I tried desperately to scheme and juggle my way out of my financial calamity. Surely if I refinanced this or short-sold that or negotiated down the other, I could make it all work. Alas, the math was simply not in my favor.
Spring of 2010 I initiated bankruptcy proceedings. It was somewhat demoralizing, but I kept reminding myself that corporations that do so are praised for their boldness. Shortly before my court date, Bank of America, who held the mortgage on my flip house, petitioned to separate that property from the rest of my listed debts. My lawyer said that was standard procedure to save the bank from having to wrest it from the morass later on. The judge gave his assent, the debtor discharge was granted in October 2010, and we all moved on from there.
Here’s where it gets interesting.
In early 2012 my father-in-law was preparing my taxes and asked why I was getting end-of-year statements about the flip house. Beats me, I replied, that place is long gone. He wasn’t sure that was the case and suggested I follow up on it to be on the safe side. “Being on the safe side” has never really been in my repertoire, but I understood his point and called the bank.
“How can we help you resume payments, Mr. Judson?” each new voice asked as I was transferred over and over around the globe. I explained I didn’t want to make payments, that I wanted the bank to take the property off my hands, that I had gone bankrupt. “Of course, Mr. Judson. Shall we try to work out a payment schedule together?”
Finally somebody somewhere told me my foreclosure was working its way through the system, but that it was a slow process. In the meantime would I like to plan my next payment? I hung up the phone and went in person to my local branch and filed a formal report that I had tried to get the bank to initiate foreclosure. I was being on the safe side!
March 16 of this year I received a letter from Bank of America: “Although you have missed several of your monthly payments, it is not too late to get help. Please act quickly before time runs out.”
I suppose 40-odd missed payments can safely be counted as “several.” But time running out? Methuselah should have such a surplus.
This would all be comical if not for the fact that, unlike me, there were families desperate to hold on to their homes, but the banks have refused to accommodate them, even now. “My” property’s worth and condition has deteriorated terribly. Nobody is coming out of this a winner and I can’t even fathom what lessons might be gleaned from such a farce.
In the original Times profile, I’m quoted as predicting that “the housing slowdown will come into play, even if it’s just the psychological effect.” To the other skills listed on my resume, I can now add “Master of the Understatement.”
photo: Kyle Ericksen