The Dying Middle Class

Hello, I’m what’s left of the American middle class. And I’m dying.

I’m in my 30s and I have a wife and one child. I own a house, and although a man is only a man once he buys land and a domicile, it is this very house that is crushing my will to live. But more on that later. Here in the middle class, both of us work full-time. And we work hard. We kind of had to after one of us lost that job when the economy imploded. Sure we make less now, but one of us was also forced to take a job an hour away from home, so we’re spending a fortune on gas that costs nearly $3 a gallon and less time with our families. And because we can’t spend as much time with our kids as we’d like, we need to pay for daycare. That means one of our jobs is paying almost exclusively for someone else to watch our kid, yet we slave away.

But then home values tanked and we were stuck with that exotic mortgage. I know exotic sounds sexy most of the time, but trust me, in this instance there’s nothing appealing about it. It was only supposed to be temporary, you know, until we could refinance or sell the place and get something bigger. But then the market crashed and home values dropped faster than Tiger Woods’ pants. All of a sudden we’re upside down $75,000 and saddled with an adjustable rate mortgage that’s about to shoot up higher than Tiger’s erection when he passes a strip joint. We can’t refinance because we don’t have any equity in the house. We can’t sell the place because we’d still owe a fortune. And we can’t rent it because the rental income wouldn’t even cover all of our expenses.

Not to mention most of us haven’t received raises in a couple of years now, and health insurance costs have ballooned up to nearly unthinkable levels as employers contribute less and less to the cause.

And speaking of expenses, it’s getting out of control. The condo fees are getting a little too close to $300 a month for comfort. And on top of that, the condo association has implemented a 5-year “special assessment” at the rate of $1,100 a year to put new siding on the houses. Not to mention another $140 special assessment for landscaping, which is already supposed to be included in the regular condo fees. Yet my house has no new siding, they don’t do anything besides mow the lawn and the snow barely gets plowed in the winter. Meanwhile NStar is charging me a $500 per month electric bill because energy costs are off the charts.

Although we haven’t used credit cards in years, it became clear  a few months ago we had to lean on them in our time of need. But lo and behold, new credit card regulations are going into effect and the credit card companies don’t like it one bit. So, they began either drastically reducing credit limits on existing cards, or in some cases, canceling them altogether. That means our emergency safety net was suddenly removed, just as we got to the most treacherous part of the tightrope. And the biggest kick to the junk is when you’re hoping for a mini bailout in the form of a tax return, only to discover you owe the government $3,000 because you had to take out withdrawals from IRAs and 401ks just to get by.

Recently, after some simple math, it became clear that making timely mortgage payments, utility payments, condo fee payments, etc was not going to be possible. But because we are proud people who have never fallen behind on any payments in the past, we wanted to be proactive. So, being the responsible middle class folks we are, we began calling around.

We tried to refinance our mortgage and were rebuffed. We tried to negotiate with the condo association and were shat upon. But perhaps the most frustrating part was appealing to the mortgage company. We explained our situation to them and told them for at least a few months, we weren’t going to be able to pay on time. And so we asked for assistance, noting that we were doing so ahead of time to stay in front of things.

Wanna know what they said? They told us there was nothing they could do for us until we were at least two months behind in payments.

Incredulous at their response, we asked them if we were correct in surmising that they could do nothing to help us now, but if we were derelict in our responsibility to pay them for the next two months, then and only then could they step in and help us.

Does anyone else see how fucking backward this is?!?! No one can help the middle class until the middle class is so broke they become the poor. It actually benefits me NOT to pay the mortgage, so that I can receive help to then — you guessed it — pay the mortgage. Maybe I’m a goddamn lunatic here, but wouldn’t it be more cost effective to assist people BEFORE they get to the point where they’re considering walking away from a home with no equity of which they’re in arrears?

And make no mistake, people are walking away from their homes. And who can blame them? A lot of the middle class didn’t put money down on their homes, they’re upside down and with the market correction may never see any kind of profit. Where there used to be a strong connection to our homes, many see them as an anchor around their necks. There’s no “pride of ownership” related to a home that is slowly killing you. So people are taking the credit hit, weathering the foreclosure and starting over.

Meanwhile those of us working several jobs apiece and breaking our backs to pay everything on time (or slightly behind) are met with no assistance, liens on our homes and threatening letters from lenders and bill collectors. And whether it’s a car repair, home repair or medical problem, we’re all one major unexpected bill away from serious motherfucking trouble.

This is why the middle class is disappearing. The middle class makes too much money to qualify for much of the available aid out there, but not enough to make all the ends meet. It’s like being stuck in some hellish limbo where things admittedly could be worse, but at the same time there’s no real chance of them getting any better. It’s a never-ending struggle and swimming upstream is so fucking maddening sometimes, I feel like just sinking to the bottom so someone will come rescue me.

But I can’t. I can’t imagine getting behind on the mortgage. I would feel too much guilt, because I’ve been taught personal responsibility. And that’s what the bigwigs bank on, the pride of the remaining class that will keep them paying into a money pit that will never benefit them.

I thought our President might provide some relief, and for the first time in a long time I was hopeful. Turns out I was naive. There’s no help on the way. No white (or in this case, black) knight coming to the rescue. We either need to give up and be dirt poor, or hit the lottery (or land a book deal) and move up to the wealthy stratosphere.

Because those of us in the middle are nearly extinct, and we’re running out of reasons to keep trying.


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14 thoughts on “The Dying Middle Class

  1. I know it’s like putting whipped cream on a pile of shit but that was beautiful writing on tough situation. Words can’t off any solace in times like this but know you are not alone

  2. Very well put. I cannot even fathom what your day to day, minute to minute emotions are like in dealing with such stupidity, red tape, and bullshit when you are trying to do your best to stay in front of your financial troubles. I still believe that folks who work hard, take responsibility for themselves and are intelligent should have a general advantage in life – but it would seem that belief is foolish in 2010. The lazy, dumb, bastards who merely cry that they’re a ‘victim’ are the ones who get help while good people are allowed to drown.
    Best wishes to you and your family. Here’s to hoping that book deal comes along…and soon.

  3. I am right there with you. My husband is an aircraft mechanic. Guess what? People don’t fly private jets when the economy tanks. So here we sit. He has been unemployed for 1 year and almost 4 months. We are paying the bills, but nothing much else. He is working part time as a crossing guard at the school. Do you know what that does to his ego? And there is no help for people like us, stuck right in the middle, trying our best to not go under and ruin our credit.

    We were lucky on the housing front – we had a great agent that helped us figure out what we could do on one income. Just in case. And we don’t have to worry about condo fees. Our house isn’t fancy, bu it’s nice. Nice community and all that. But that house is an hour away from my office. So that’s 2 hours out of the day I’m on the road.

    I feel your pain. And I love the way you state the case.

  4. I feel the same way. Up until last August, we had a two income home, two cars, 3 kids, none of them in daycare, not overly buried in credit cards or anything and we were slowly falling behind. Money was a constant struggle for us. We worked hard to keep what we had, but it didn’t seem to be getting us anywhere. We hadn’t had money in a savings account, um, ever. Now, we’re getting divorced, he lost his job at the end of December and has been on unemployment since then. But you know what the saddest part is? We’re doing better on uemployment than we’ve ever done working two full time jobs!! It’s really pathetic that you can do what you are supposed to do and it gets you nowhere but ass backwards, and the minute you stop doing what you are supposed to do you do great!

    Something is wrong with this country.

  5. That was a great post. I hope thing lighten up for y’all soon. But kudos for not walking away…the people who just leave their homes make me crazy.

  6. But I can’t. I can’t imagine getting behind on the mortgage. I would feel too much guilt, because I’ve been taught personal responsibility. And that’s what the bigwigs bank on, the pride of the remaining class that will keep them paying into a money pit that will never benefit them.

    You understand that you are being screwed, but keep paying anyway? You can’t think this way. Mortgages and other business deals aren’t about ethics and morals. When you buy a home, the mortgage is a document with two options:

    (a) Pay the mortgage, keep the house
    (b) Don’t pay the mortgage, give the house back to the bank, take a credit hit*
    * (Get legal advice before you do this and know whether you are in a “recourse” or “non-recourse” state)

    By defaulting, you are merely exercising option (b). Why continue to be “slowly killed” by your mortgage when you can be free of all the guilt, fear, and anxiety tomorrow? Are you going to feel this way in a month? In a year? In two years? When do you want to take your life back? Just mail the keys back to the bank, rent an apartment somewhere, and start actually saving money again*(see above disclaimer). In fact, just stop paying and put the money in a savings account every month.

    This is a business arrangement with two partners. You talk about “personal responsibility”, but the bank had every opportunity to limit its own risk and deliberately chose not to do so, betting that you would continue to be a sucker and be constrained by rules that would not constrain the bank for one instant if the tables were reversed.

    You don’t owe anyone anything, except perhaps owing your family getting your life back together.

  7. I’m a firm believer in the “above the line, below the line” approach. When times are tough, everything above the line (living expenses, essentials) gets paid. Everything below the line? Fuck it. You’ll get the rest when you can.

  8. With regards to “the place our country/govt./economy is in” it’s hard to know what to do. The housing boom and easy credit is, in hindsight, the worst possible combination of things we could imagine.

    I agree with Sparhawk… if you’re hitting your head against the wall, take a step back and see if there’s another option. It might not sound like something you want to do, or would be something you’re “proud of” but you have to think about what option is best for your family/finances/sanity.

    I moved from my hometown to New Mexico for 2 years, and in the process I ended up making LOTS less money, etc. and I didn’t have a mortgage to pay – and it really messed me up mentally and emotionally.

    I really think you should explore all options.

    What good does pride do you when the outcome will leave you underwater?

  9. Here is an eye opener for you..Thanks to the stimulus you recd in your paycheck last Feb ( you know the one where they gave you a little more money and took less in your federal taxes) so you would spend money. It appears to hit the 17yr old high school student. She now has to pay the federal govt for that “help” 186.00. Where do you think she is going to get that from … her parents of course.

    ABSOLUTELY BRILLANT STIMULUS BRILLANT

  10. Sounds a lot like the Stack Manifesto I read last week.

    I have sympathy for what people in your income bracket are suddenly dealing with. Though, it’s tempered by knowledge of a reality that existed long before the “middle class” got clued in. These issues have existed for a long time. They just didn’t effect people outside of the “poverty” guidelines. The middle-class, by and large, has helped create the policies and regulations that are now their own roadblocks. All these years that people in my industry have been screaming about how effed up the system is, how it doesn’t do anything to help people progress, how it provides no incentives for people to better themselves, how people are penalized for self-sufficient, NOW the middle class is having to deal with the fall-out from not paying attention to what we’ve been saying.

    Our economic class system is shite. I explained it to my kids by comparing it to a conical island with the wealthiest at the top, the poorest at the bottom, and it’s slowly sinking. When it was just ‘the poor’ sinking, it was their own fault and it was up to them to pull themselves up and out of the water. Social programs take on the role of a leaky raft, grudgingly paid for by the middle class. Well, now the water is lapping up higher and suddenly no one can talk of anything but how jammed up the system is.

    If I had a dollar for every sanctimonious son of a bitch that has sat in my office and said, “I never thought I’D be here”, I could fucking retire. I had hope too. I hoped that the silver lining in this economic cloud would be a better understanding of how to fix these problems, maybe some dialogue on real solutions, or better yet, prevention of these issues. Instead most people just want to blame it on recent economic activity and ignore the systemic problems.

    Hey, in the long run, none of our problems matter as much as the defense budget does. Come to terms with it, it won’t be changing any time soon.

  11. JEE: Good point, but living on this particular peninsula is a little misleading. Because if you go by the median income of Barnstable County, I’ve personally never been middle class. I’m right at the poverty line.

    But your overall point is a good one. The programs that give people assistance are worthwhile ones. Sure a few people take advantage, but that’s no reason to do away with them completely. And I don’t blame you for wanting to slap the people who make those comments in your office. Personally I’d just be happy that someone was willing to help me and shut my damn mouth already.

  12. This post is so sad, but Aaron, my family and I are right there with you. I decided to go back to school at the absolute worst time. So we went from a 2 full time paycheck household to a 1 full time income with a cut in hours and my part time check, that basically pays for my daughter to go to school. The only help we could get was from our local banks that held our car loans. We have our Mortgage through your best friend and mine, Bank of Hell, I mean America. We fell behind a payment or 2 and they SENT MY CHECKS back to me. Yes, they denied taking money from me because it wasn’t the amount they said I needed to pay. (It wasn’t like we had crazy credit card debt or anything else, the economy just tanked as I tried to better my career with a program I couldn’t drop and just pick up in the same place later down the line) And they REFUSED to help us, we never got the “fall 2 payments behind and we can help” Funny how they get billions in tax payer dollars and can’t help us out… So many people are in this boat and it sucks. Sadly, it doesn’t look like its getting better anytime soon.. Hang in there, we certainly are trying to!

  13. I know a lot of similar stories. People who approached the bank to try and come up with a plan so that they would stay current with their mortgage. And every last one of them told that there was nothing that could or would happen unless they missed a few payments.

    Something isn’t right here. The system is broken and we’re getting dragged ass over elbow towards a cliff.

    And my friends who are behind on their mortgages are being told that a load modification takes 45-60 days.So they can’t pay their current bill and there is no hope of immediate relief.

    Not everyone who is out there trying to get help was irresponsible. Something is wrong.

  14. There is a major breakdown within the banking system. We’re doing tons of modification paperwork only to have the bank process it like they’re stuck in a tar pit. The regulations, delays and bureaucracy is enough to make even the most tenacious homeowner say screw it and walk away. When people are operating on that level of stress it doesn’t take much to push them over the edge.

    We’ve had to have training on how to diffuse irate clients. I’ve seen some nasty arguments in the front office while people are waiting to go in for their appointments. Even though I want to slap some people, they’re the ones I go out of my way to be helpful too. They already had a negative opinion of us, or agencies like us, so it does me no good to enforce that.

    It’s a shitty situation and I can only hope that the current issues shed light on the difficulties we’ve always had in the system.

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