Home page, Judith Kruk, at her home in Marmora where she is packing her things in preparation to move. Her home went to foreclosure June 18.

SEAVILLE — Judy Kruk is packing up her things.

On the floor is the usual chaos that materializes when one is getting ready to move: boxes, paintings, some of which she’s created herself, clothes sorted in piles, all the things one accumulates over time — everything she owns — on top of careworn Oriental rugs covering uneven wooden floors in this mid-19th century house.

This used to be her grandmother’s home, and was hers, until June 18.

That’s the day she lost it to the bank.

She walks around and recalls that as a child she and her siblings spent a good deal of time here.
“We used to stay up here,” she says, entering an upstairs room off the main bedroom.

An antique mirrored dresser covered with old linens lines the wall. It’s the type of room that conjures up C.S. Lewis’ “The Chronicles of Narnia”: the romance of old trunks with hidden treasures inside and a large wardrobe you step through to enter into an imaginary world. It’s a room a little girl would have loved to play dress up in.

To say an 1860s house is old is like saying grass is green. The ceilings in the main living room are hardly a couple feet above the head of a five-foot-six-inch person; the old posts and beams, exposed. The house leans quite clearly in different places and has had to be reinforced in the main bedroom with 20th century beams. From the street, the sunroom, a nook off the dining room area, looks as if it’s trying to make a break for it it’s leaning so far off to the left.

But inside, that room is a little oasis, with plants, and a breakfast table with the Want Ads and crosswords spread out, half complete.

It’s where Kruk spends her mornings, she said.

Kruk, a single woman, has lived here for a good part of her adult life, tending the vegetable gardens in the back and the herb gardens on the side, renting out the adjoining property that was in her family at one time.

Her uncle, a politician, has a street named after him right down the road.

She made a decent living as a casino dealer in Atlantic City until April of last year. But when she had a dispute with a customer over the use of what she considered reprehensible language one night, she said, she found herself soon after unemployed.

“They chose to believe him rather than me,” she said.

She had worked in a casino for 17 years.

After she lost her job she went on unemployment but it wasn’t sufficient to cover her mortgage. The mortgage, like so many others who are facing similar financial straits, had an adjustable interest rate. At first it was a fixed rate — for the first two years — then moved to a variable rate.

“Once it went to variable, every three months it seemed it was going up and up and up,” she said. “Because of late payments, the interest and late fees were adding up.”

The uncertainty of adjustable rate mortgages makes them risky for those who don’t have the cash flow to cover an increase in payments. The benefit is they can often be gotten at lower interest rates. But nationwide, consumers are getting into financial trouble and losing their homes as rates climb and real estate values decline. In Cape May County, foreclosures since 2004 have been on the rise. From 275 In 2004, to 615 In 2007. In 2008, in the first quarter alone, 247 were filed. If 2008 continues at the rate filed through March, by the end of the year there will be 988.

While Kruk was still working, she ended up declaring bankruptcy, and it wasn’t the first time, she said, candidly.

But after she lost her job, it became impossible to keep up payments. The bank was threatening foreclosure.

“Once I lost my job there were no payments being made at all,” she said. “They started threatening the sheriff’s sale.”

That happened in September 2007. The balance of the mortgage owed was approximately $118,000.
When she switched attorneys she had the house listed for sale. It’s been on the market, she said, since last May. A potential buyer kept backing out and the months dragged on. Then, that same buyer came forward again at the eleventh hour. A last ditch effort seemed to be the saving grace.
She had a potential short sale, which means the bank will take less than what is owed in a cash deal.
Her attorney got a postponement of the sheriff’s sale lasting until June 11. She also got an emergency extension granted by Chancery Court Judge Todd in Atlantic City.

“I went over to see him and he granted me a week. I was asking him for a month, he granted me a week.”
But with the week extension granted to attempt to finalize the title search, the surveys and all the legal work — a seemingly impossible deadline from the get go — the deal fell apart the day of the sheriff’s sale.
It turned out the potential buyer didn’t have the necessary funds to close the deal.
If the short sale had gone through, she might have come out of the sheriff’s sale with some cash in hand, as the buyer would have bought the contents of the house as well.

But that didn’t happen.

Kruk said the reality of her situation has finally sunk in. She had “a rough weekend” she said, after the sheriff’s sale on June 18.

“It’s been hell,” she said.

Yet she keeps moving.

She says she hopes to move into the trailer park down the street. And she’s feeling hopeful about a brand new start.

It’s a pretty community with well-maintained trailers decorated with wind chimes and kitchy ornaments on the teeny lawns and neighbors packed in tight. It’s quiet and a friend is helping her get set up there.

“My cousin and her friends from church have been so helpful,” she adds. “Even the gentleman that owns the trailer is willing to bend over backward.”

She is selling the contents of her house to raise the $5,000 necessary to move in. As she continues to search for a job, she’s trying to keep the faith that somewhere the money will materialize.

She has as much time as the bank will take to evict her: weeks, possibly months.

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Tips for Avoiding Foreclosure

Freddie MAC has compiled a list of tips to help avoid foreclosure. For more detailed information, see www.freddiemac.com/corporate/buyown/english/avoiding_foreclosure/.

Learn to recognize the warning signs of foreclosure.

Unexpected life changes are often a contributing factor to foreclosure – especially those that impact your finances, such as:
* Loss of employment or reduction of hours
* Major illness or injury
* Divorce or separation
* Death of a spouse
What makes it so difficult to think about foreclosure during times of crisis is that you are so focused on the problem at hand and not likely to have the time or energy to think about how it could impact other aspects of your life. That is why a plan that was developed before any problem starts is the best protection.
If you have a “Plan B” in place, you won’t have to organize your finances while you are stressed about finding a job or dealing with a major illness. The plan will already be done – you will need to just follow it.

Know what early steps you can take to avoid foreclosure.

You already know a Plan B is important, but what should it include? The first steps to take in creating your plan are to:
*Save money. Put away some money each month to have an emergency fund in case something unexpected happens, such as losing your job. You should have several months of housing costs saved to protect you from unexpected financial problems.
*Reduce expenses. Think about where you can save money; for instance, temporarily canceling cable or your gym membership. By paring down to the bare necessities, you may be able to save a significant amount of money. And even if it doesn’t seem like enough of a savings to make a big difference, remember – every little bit helps.
If you’ve put your Plan B into action and still find yourself having trouble paying the mortgage, you should:
*Call your lender. This is the single most important thing you can do. Lenders want borrowers, not properties – they would prefer to see you keep your home. Most will work with you while you get back on your feet.
*Be honest with your lender. Different situations require different solutions. It will matter to your lender to know if your financial problems are temporary, for example, due to an injury that puts you out of work for a few months, or are more long term, such as a cut in pay or a layoff.
*Know what you owe. Have a clear picture of what your debts are and make your mortgage the priority if you have to make choices. Debt collectors can be very aggressive, but if you can’t pay all your debts, make sure your home is protected from foreclosure by paying your mortgage.
*Talk to a housing counselor. A non-profit housing counseling agency may be able to help you restructure your bills so that you have an easier time paying them. Additionally, they can help you create a budget that suits your specific needs.
*Contact a housing non-profit. A housing non-profit can give you valuable advice. The HOPE National helpline, 888-995-HOPE, is dedicated to helping homeowners facing foreclosure 24 hours every day. Spanish – speaking counselors are available.

Special Circumstances:

•If you are a victim of a natural disaster.

If your property has been damaged or destroyed by a tropical storm, hurricane, tornado, flood, or other disaster, talk to your lender immediately. They often have special disaster relief options to help you.

•If you are a service member on or recently released from active duty.
There are special financial relief options in place for service members through the Service Members Civil Relief Act (SCRA). Talk to your lender about them.

•If you are a veteran.
The Department of Veterans Affairs has produced a streaming video to provide information to vets facing foreclosure.
Courtesy of © 2008 Freddie Mac

(Ed. note: This story is part of an ongoing series on housing issues in Cape May County and the second in a three-part series focusing specifically on foreclosure. Next: The Pros and Cons of Buying a Foreclosed Property).

Contact Avedissian at (609) 886-8600 Ext 27 or at: savedissian@cmcherald.com