What would you do if you had only a few weeks before your home would be foreclosed upon?
Would you apply for a last-minute modification? Take out a personal loan to bring your payments up to date? Batten down the hatches and resolve to squat in your own home?
What about turning to the internet for help?
That’s exactly what many families have been forced to do as foreclosure continues to affect millions[j1] of Americans. Suffering from a lack of options, they are asking “the crowd” to step in and help them keep their homes.
Although my company American Homeowner Preservation allows everyday people to invest and earn a return helping families save their homes from foreclosure, most crowdfunding campaigns are simply donation-based, with no expectations of a return.
Crowdfunding site GoFundMe has over 5,500 campaigns related to “foreclosure” on their site, and more seem to appear every day. Perusing these campaigns just might make you feel depressed: they are full of stories of unaffordable medical bills, family emergencies, crises like sudden job loss, and other heartaches that can lead to financial instability and foreclosure.
One such campaign was begun by Susan Meredith, an engineer and entrepreneur whose husband Robert struggled with esophageal cancer shortly after recovering from a stroke. Partly due to their immense medical bills, they fell behind on their mortgage.
“I couldn’t deal with it alone,” Susan said of her decision to try crowdfunding. “Robert was weakened, and I needed help.”
Susan made a campaign and filled it with pictures of and information about her, Robert, and their son Ian. Their story is at the same time one of success and failure: the campaign raised nearly $23,000 of a $50,000 goal in only 28 days, but they were unable to save their home and are now staying with friends.
(You can donate to Susan’s and Robert’s campaign here.)
Another heartbreaking story involves a disabled, elderly World War 2 veteran named Guy Ball, who lost his job of over three decades at a steel mill after a tragic car accident. Now he and his wife are weeks away from losing the home that Ball built himself. Ball’s son Philip created their GoFundMe campaign as a last ditch effort before bankruptcy.
“We filled out a package asking for a HARP refinance. They sat on the package, then called me after it was too late and said, ‘you know, you should’ve had this in earlier.’ I had it in by their policy guidelines, but they told me they didn’t get to it until after the deadline.”
With HARP off the table, Philip didn’t know what else to do. He is a retired police officer, and his family travels the country with their son PJ Ball, a junior Olympian sport stacker. The GoFundMe campaign for his father has, thus far, raised $1,300 of a hefty $165,000 goal.
“My parents keep waiting on a biblical miracle,” Philip said. “I don’t want to be a naysayer, because you never know what good could happen. But there may not be a Hallmark moment.”
“I remember dad working in the steel mill all night, then coming home, changing clothes, and driving the Sunday school bus to the trailer parks to pick up kids who wanted to go to Sunday school. People would come to the door begging for money, and my parents would always help them. After a life of giving to people, not many people have stepped up to help them in their hour of need.”
(Help Guy Ball save his home here.)
Another campaign, which has found some limited success, is run by Ann Wendell and her husband Tony Hicks. Ann is a local historian and Tony runs his own business selling homemade “steampunk gadgets and bodgery,” but medical woes (which appear to be a very common foreclosure trigger) including cancer caused them to fall behind on the mortgage of their Seattle home. The pair raised $14,000 out of their goal of $15,000, but it took them over a year to do and now their home is on the market.
Although it ultimately wasn’t enough to save their home, the donations raised on GoFundMe did allow Ann and Tony to stay there longer than they otherwise would have been able to. “We were able to sustain ourselves for a few months,” Ann said. “But I still didn’t have a job, and sales from Tony’s business were way down. We realized we had no other option but to sell the house. It’s devastating, but at least we can have some control over the process.” They are still hoping to raise a little more money through their campaign to get through the closing.
(Ann and Tony are still looking for a new place to live. Donate to their campaign here.)
Ann and Tony’s story underscores the potential pitfalls of crowdfunding aid for financial woes. Susan Meredith, the engineer and author mentioned earlier, says that her husband was denied for MedicAid because of the money they raised through GoFundMe. And while donations made through the crowdfunding site are supposed to be considered “personal gifts,” the IRS has been known to go after recipients, treating the money raised as taxable income, as yet another cancer patient found out the hard way.
What does it say about our society that so many people are forced to turn to strangers on the internet for help in saving their homes? And what does it say that so many of these people are victims of circumstances far beyond their control, like cancer or a car accident?
Perhaps it says the same thing as the fact that we have also turned over our cars (Uber) and our homes (Airbnb) to strangers in order to make ends meet. The same thing it says that there are still nearly 30 million Americans that lack health insurance, and that foreclosure continues to disproportionately affect minorities.
Perhaps it says that we need to do more to help our neighbors in their times of need.