How one couple lost their home

Crystal Neubauer wants others to know how she lost her Grayslake home.

She contends she and her husband, Larry, fell through the cracks of a corporate lender that had grown too large, that didn't have enough workers to help them with mortgage problems.

"We're representative of more people than the public is aware of," she said. "We're a normal working-class family living paycheck to paycheck."

The couple seemed to have a lot going for them, including a house with an estimated $30,000 to $50,000 in equity when prices were stronger.

The Dream Foreclosed is a four-part series looking at the local home foreclosure crisis. Stories Dreams end and begin at foreclosure auctions [11/27/07] How one couple lost their home [11/27/07] Salvaging the American dream [11/26/07] Miscommunication at heart of foreclosure crisis [11/26/07] Communication with lender key, counselor advises [11/26/07] Foreclosure tips: What you need to know [11/26/07] Families struggles against foreclosure [11/25/07] Many factors fed housing breakdown [11/25/07] Growing areas not safe from foreclosures [11/25/07] A glossary of foreclosure terms [11/25/07] Graphics Map of local foreclosures Excel document breaking down local foreclosures Then in spring 2006, things turned south."My husband got laid off, and we kind of went through a period of time with one financial blow after another," she said. "The car got hit by a deer, I got sick and my daughter got sick. The dishwasher broke. It was a horrible cycle of one thing after another and our savings got depleted."Keeping up with their mortgage payments got harder and last fall they missed a payment.The Neubauers have a blended family with custody of seven offspring. Crystal had quit her job to stay home with several of the teens. After Larry's job loss, Crystal returned to her full-time job as a project manager at a large graphic printing company in October 2006.Larry was unemployed for about six months and is now a national account representative in the business of sound systems for the music industry.When they fell one month behind in mortgage payments in fall 2006, Crystal Neubauer said their lender, Wells Fargo, would not accept payment unless she gave them two months worth -- extra money she would not have at the time for two more weeks.The Neubauers still thought they were back on track and could qualify for a program where the lender would add two missed payments to the end of their mortgage and recalculate their payments."We were only a couple months behind at the point where we were both back at work," Crystal Neubauer said.But this is where they say they ran into a bureaucratic nightmare."I faxed the paperwork and they said they didn't get it," Crystal Neubauer said. "I faxed again and they would say they didn't get it. I would leave my desk and go to the fax machine five or six times in one day. I called the mortgage company over and over and over again -- probably several dozen times."Then they would say, yes, they got it. They would say 'We need you to update. Can you fax again?' "A Wells Fargo spokeswoman said Crystal Neubauer's account of what happened is not consistent with their records, but the spokeswoman said she could not discuss the case because of privacy laws.Neubauer contends at one point she used an overnight shipping company to send the paperwork."The whole cycle started again," she said. "It started to feel intentional."While the Neubauers had an adjustable rate mortgage that changed during the time they were in trouble, the payments only increased $100 a month, which Crystal Neubauer said was manageable.They had considered selling their home when prices were still strong but were not sure where they could move. They also thought things would work out once they got jobs.Then the housing market slowed while the Neubauers' loan issues increased. It seemed impossible to them to sell the home for even as much as they owed on it.The stress took its toll on their marriage and they have undergone a few separations.At one point, the Neubauers had sought help from GNR Realty Inc. in Round Lake Beach, a real estate company. In hindsight, Crystal Neubauer said they should have tried that sooner.Eventually, Randy Nosalik of GNR sold the home in what is called a short sale because it was for less than the mortgage. He negotiated with Wells Fargo to accept the lower price. A short sale is a step to avoid foreclosure and looks better on a homeowners' credit record.The home was sold for around $138,000 in September, Crystal Neubauer said. The mortgage had been about $168,000."They accepted in the long run thousands less than what we owed them. It doesn't make sense. It was appraised before this whole thing started for $214,000 to $220,000," Neubauer said.Debora Blume, the Wells Fargo spokeswoman, said a short sale is a voluntary act by the homeowner.Nosalik was reluctant to blame Wells Fargo, saying borrowers need to be persistent and prepared with complete information when dealing with loss mitigation staff members."How can you afford to hire people when you're going bankrupt?" he said of the mortgage industry in general.But Nosalik reports his own problems faxing documents to lenders."I faxed twice a day for four days -- 65 pages. So finally I called back and they said we have it."He recommends anyone having trouble paying their mortgage should contact the lender before they get behind. He also urges owners to seek help from a counselor certified by the U.S. Department of Housing and Urban Development or a real estate agent.Larry Neubauer said he does not want to bad-mouth Wells Fargo and is sure they have helped other people, but he said the company just got too big."I'd like to save somebody else from having the same headaches we had and loss we had," he said.The Neubauers were able to rent a house in Round Lake after selling their home.Crystal Neubauer said she wants others facing foreclosure to realize they are not alone."The government is not dealing with that -- what's going on with mortgage companies, how they're growing so fast and lose people in the process."It's not always people who took on an (adjustable rate mortgage) and shouldn't have. There are more people like us who need a little help and couldn't get through the system."She remains optimistic."We are grounded in our faith and do a lot of praying," she said. "One of the things that I've learned the most is to really hold on loosely to things outside. My source of happiness comes from inside, not from what I have."