Couple plans to fight home foreclosure
Mother Nature and the collapse of the U.S. economy forced Steve and Jennifer Koth out of their Ellsworth home.
At the same time, the couple is determined not to join one of the nearly 150 homeowners in Pierce County foreclosed upon this year.
"There are other options you can aggressively pursue," Steve Koth said. "You can stand up to these banks and fight them. How successful you are depends on your time and effort."
In 2008, Koth, who previously spent a year in Iraq with the Army National Guard, was forced to take a $7-per-hour reduction in pay to maintain employment at a manufacturing job in Baldwin. It didn't last long, as he lost that job in April 2009.
He became unemployed "and utilized every resource" before contacting U.S. Congressman Ron Kind, who put the couple in touch with WestCAP, headquartered in Glenwood City.
The agency, which helps families get back on their feet, began negotiating with the Koths' nationally-known mortgage company. During that time, Steve Koth was unemployed for 90 days until he found a $10-per-hour job at a temp agency.
With that news, he said the mortgage company then tacked on $300 to their monthly payment to recoup lost wages.
"It was well over 50 percent of what I and my wife brought in," he continued. "We couldn't afford it anymore."
That's when Mother Nature made it even worse.
In the summer of 2008, heavy rains flooded the couple's house on Beulah Street and, as a result, they had to cash out their 401K retirement savings account. The repairs lasted one summer, as storms left their mark on the house again, forcing the Koths into a deeper hole than they ever realized.
The Koths bought the house from a for-sale-by-owner and, when the house was being inspected during the repairs, Village Inspector Galen Seipel noted a few code violations.
Among the most serious was no firewall separating the garage and the house, foam insulation around a cantilevered portion of the house into the garage (the material must be fire protected), and all kitchen receptacles to be ground fault protected and tamper proof.
The reasons for the violations, explained Seipel in a letter to Koth, was the house was built in 1986 and the state at the time didn't require communities with a population less than 2,400 persons to have inspections on new housing.
As they struggled and attempted to make mortgage payments through the end of last year, foreclosure bore down on them like a freight train, the couple was advised to go through a short sale or a deed in lieu of foreclosure.
"Both options were less detrimental to the home owner," Steve Koth said. The couple liked their chances even more after adding in the flooding situation.
"We had a good reason to move," he continued. "We couldn't afford to fix it."
The mortgage company said no way and wanted full payment of lost wages or the foreclosure process would begin.
"The mortgage company gave us no leverage in helping us out," he said.
The couple hired a Hudson attorney, who advised them they have every legal right to pursue a deed in lieu.
"I am unaware of any reason the property cannot be surrendered by deed," Attorney Daniel DeMaio wrote in an e-mail to Grey and Associates, attorneys for the mortgage company. "Due to the intransigence of your client, my clients will receive a foreclosure and your client is contributing to the depreciation of housing values in the community."
The Koths officially vacated the house Aug. 1. They received a foreclosure notice on Nov. 1. As Steve Koth said, "We'll see what happens next."