Publicity helps family save home

The mortgage rate on their home had been readjusted to 15.9 percent.

PITTSBURGH (AP) — At the end of August, Randy and Cindy Balzer were unable to make the payment on their Baldwin Township house after it adjusted to a higher interest rate, and their mortgage holder was ready to seize the home at a sheriff’s sale.

Today they are breathing a sigh of relief now that the modest home they have lived in for 20 years is out of foreclosure and they’ve renegotiated a new monthly payment they can afford with an impressive fixed rate of 5.25 percent.

“This is our house,” said Randy Balzer. “This is where our kids grew up. We didn’t want to go anywhere.”

But it is a bittersweet victory for the Balzers when they consider the enormous price they will pay for the privilege of keeping the home.

The total amount of penalties and interest that were added to the balance of their mortgage throughout the lengthy foreclosure process has resulted in a debt so high in relation to the home’s worth that they declined to reveal the exact figure.

The new mortgage balance on their three-bedroom home on Donaldson Drive is now more than $80,000 above its original purchase price of $50,000.

Allegheny County appraisal records show the home is valued at $80,000 for tax purposes.

“The end result is good because we kept the house and have a fixed rate,” said Cindy Balzer. “But there were many nights we wondered if it was even worth it.”

At a time when millions of families facing foreclosure are either surrendering their homes back to lenders or selling them for less than they owe, the Balzer family story is an uncommon one. Much of their determination to fight for their home stems from their pride of homeownership and being longtime residents of this working-class community off West Liberty Avenue, where they say homes are selling for around $50,000.

They also were energized by the outpouring of community support they received after a newspaper article in late August describing their predicament. Anonymous donations to Seton-LaSalle Catholic High School, where their youngest son is a freshman, will cover most of his tuition this year, and a Pittsburgh financial planner volunteered his services to negotiate with the mortgage lender, Wells Fargo, on their behalf.

Payments on their home had been more than $1,800 a month due to an adjusted interest rate of 15.9 percent, which kicked in in March 2006. The Balzers had pleaded with the company to readjust it to an amount they could afford. But the lender wouldn’t budge, and a judge set the house for a sheriff’s sale Oct. 6.

As a result of the deal they negotiated late last month, the new monthly payment will be $1,153.47 starting on Dec. 1. That includes $778.18 for principal and interest and $375.29 for taxes and insurance.

“If Wells Fargo had worked with us way back when we originally ran into trouble, we wouldn’t have all the interest, fees and penalties,” Cindy Balzer said.

Wells Fargo required the Balzers to pay an additional $500 in order to consider a modification of their loan and required the couple to make a $1,000 contribution to the company three days after they reached the agreement Oct. 23.

While they were in no position to make a contribution, they paid it anyway.

“We weren’t taking the chance of finding out if we didn’t send it, the deal was no good,” Cindy Balzer said. “We didn’t want to take the chance on it because it took us so long to get to this point.”

The Balzers fell into trouble about eight years after they bought the home for $50,000 in 1988. They began refinancing the home for increasing amounts in order to pull money out.

They were able to keep the payments under control with their combined net monthly income of $4,800. Randy Balzer, 47, works as a truck dispatcher, and Cindy Balzer, 49, is a legal secretary. But their refinancing options ran out when one lender — Option One Mortgage Co. — jacked their interest rate to 15.9 percent in March 2006 and sold the loan to Wells Fargo.

The Balzers say they have no credit card debt. Aside from the mortgage, their other main financial obligations include a 2001 F-150 Ford pickup that costs them $402 a month, and they pay tuition for a son in his sophomore year at Wheeling Jesuit University. They have a daughter who attends public school at Baldwin High.

The gas, water and electric companies also are aware of the Balzers’ financial difficulties and have agreed not to disrupt their utility services while the family works to bring those payments up to date.

“For 20 years we had decent credit,” Randy Balzer said. “Now because of this in the last two or three years, we’ve got to start all over because of what they did. It’s not just losing your home; they actually ruin people’s lives.

“This kind of thing breaks up marriages and families. If it wasn’t for our three children, it might have been a different outcome.”