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Anatomy of a foreclosure, Part 1: For Sale - A house full of memories

 This article first appeared in the St. Louis Beacon: September 24, 2008 - The collapse of some of the nation's oldest financial institutions started on Main Street America with hundreds and thousands of homeowners such as 56-year-old Maureen McKenzie of Kirkwood who in May lost to foreclosure the small ranch house that hadbeen in her family since it was built after World War II. How could this happen? The answer is ... complicated. Over the next three days, the Beacon will unravel the story of how Maureen McKenzie of Kirkwood, Mo., lost her 900 square feet of the American Dream. Part 1

Two months after she lost her 900-square-foot, three-bedroom ranch to foreclosure, Maureen McKenzie of Kirkwood swallowed her nerves and stood before a live studio audience at KETC-Channel 9 to address a panel of housing counselors:

"I'm Maureen. And I'm from Kirkwood. And I recently lost my house to foreclosure. And my house is still sitting empty, and I am wondering if there's any help available to try and get my house back."

McKenzie, 56, was on a self-imposed mission as she spoke those words during the July 15 segment of "Facing The Mortgage Crisis," which was broadcast live throughout the St. Louis area.

"I told myself, 'I have to do this. I have to speak up,' '' she explained afterward. "There are people who are going to see this and hear this and they will judge me. But I've got to say something to somebody.''

When the dust finally settles from the still-collapsing sub-prime loan market, an estimated 3 million American homeowners may have lost their homes to foreclosure. They were on the ground floor of the financial house of cards that bad loans built, and for most of them, the word "bailout" did not apply.

In May alone, 273,001 U.S. properties were in some stage of foreclosure, according to Realtytrak.com -- and one of them was the modest white frame ranch on a quiet cul-de-sac in Kirkwood that had been in McKenzie's family since it was built in 1953. The house at 1043 Barry Court has a For Sale sign in the front yard now and a list price of $149,900 - which is nearly $30,000 less than the amount of the foreclosure, as recorded at the St. Louis County Courthouse on May 8.

"Why couldn't they give me that price?'' McKenzie now asks. "Why wouldn't the bank renegotiate my loan? I could have afforded to buy my house at that price."

In September 2005 McKenzie signed on the bottom line of an adjustable rate mortgage in which "everything was working against her,'' said housing counselor Patrick Quigley of the Neighborhood Assistance Corporation of America, who represented McKenzie in a futile attempt to renegotiate her loan terms with Chevy Chase Bank.

McKenzie said she didn't totally understand the loan's jumble of terms, but the mortgage broker who arranged the loan assured her it would buy her time to get back on her feet from a financial setback brought on by illness.

"He told me, 'I can help you. I can cut your payments,' " McKenzie said.

She said she believed she would have at least three years to refinance and was shocked when her minimum monthly payment readjusted from $757.95 to nearly $1,600 two years after signing. During her frantic scramble to avoid foreclosure, McKenzie tried every avenue she could find, including an attempt at a short sale with a business that apparently doesn't exist. Looking back, McKenzie says, she encountered some people who put her interests first -- and others who didn't.

Hers is a complicated tale -- and it represents just one of the millions of stories of foreclosure that will never be unraveled. This is the story of how "Maureen of Kirkwood'' lost her stake in the American dream.

Telling the neighbors

On July 16, the day after she participated in the Channel 9 mortgage crisis program, McKenzie returned to Barry Court for an afternoon tea with longtime neighbors, Miriam Burge, 88, and Annabelle Renick, 85. The homes on Barry Court were all built and completed within months of one another in the early 1950s. Burge and Renick both reared their families in houses a few doors down from one another. The women said they were heartbroken when McKenzie told them she had to move.

"She was standing there in tears, and I absolutely couldn't believe that our Maureen was leaving,'' Renick said.

This wasn't just any house, McKenzie explained. It was her family home, where she grew up. Her parents, William and Josephine Burns, bought the just-built house in March 1953 when she was a toddler. She and her four siblings grew up in this little house, in the "Leave It to Beaver" era of post-World War II America.

"This was my neighborhood,'' McKenzie said, as she sat on a sofa between Burge and Renick. "At one point we had 27 kids who lived on this block. There were no fences between the yards, and we ran and played, and we had the run of the neighborhood. I am very blessed that this is where I grew up here, and I am very attached to that house across the street."

Neighbors on Barry Court say they saw no evidence of upkeep at the home until about two months after she moved out, when workers arrived to mow the lawn and do some interior work on the empty property.

She describes the house in loving terms -- it has what she calls "a sweet energy about it." And it is where she feels a special connection to her mother, who died in late 2003.

After college, McKenzie left the St. Louis area, but returned about eight years ago to be closer to her aging parents. After she divorced, McKenzie moved in with her parents, who later moved to a retirement community. McKenzie stayed in the home and, with a younger brother, she remodeled the house to get it ready for sale. After updating the floors, windows and kitchen, McKenzie, who was working for the Kirkwood Chamber of Commerce at the time, decided to buy the house from her father. She paid $170,000 in March 2004, financed by a conventional loan with monthly payments of just over $900.

"It was a stretch -- I wasn't saving money or taking vacations,'' McKenzie said. "But I knew the house would appreciate in value. This was the first home I ever owned. I was divorced and buying a house and doing this all on my own."

Eighteen months later, McKenzie refinanced into the adjustable rate mortgage, a decision that would eventually lead to foreclosure.

After tea, McKenzie looked across the street to "her" home and surveyed the lawn that neighbors said hadn't been mowed since she moved. The grass was tall and tree branches were scattered about the roof, left from a previous storm. The front door had a new lock, and a note:

No Trespassing

Acts of trespass, vandalism, and/or theft will be prosecuted to the full extent of the law. In case of emergency, or to report a trespass or vandalism, call Mid America Property Partners.

McKenzie went next door to say hello to her neighbors.

"I didn't know that,'' said a surprised Matt Stowe, as McKenzie explained why she had moved. "I'm so sorry to hear that happened.''

McKenzie's foreclosure also came as a surprise to neighbor David Modray. "I thought she just moved out," he said.

They talked for more than an hour, neighbors sitting together on the front steps of Stowe's home. They listened as McKenzie told her story and expressed concern over the now bank-owned property next door.

"I was afraid to tell everyone about the foreclosure,'' McKenzie told them, near tears. "I thought, 'They're going to think I'm a deadbeat.' "

On July 21, the week after McKenzie's visit, neighbors say workers arrived at 1043 Barry Court to mow the lawn, spruce up the interior and post a For Sale sign in the front yard. The McKenzie family home is now one of 3.9 million unsold single-family homes in the U.S. -- nearly a year's worth of inventory, according to the National Association of Realtors.

Mary Delach Leonard is a veteran journalist who joined the St. Louis Beacon staff in April 2008 after a 17-year career at the St. Louis Post-Dispatch, where she was a reporter and an editor in the features section. Her work has been cited for awards by the Missouri Associated Press Managing Editors, the Missouri Press Association and the Illinois Press Association. In 2010, the Bar Association of Metropolitan St. Louis honored her with a Spirit of Justice Award in recognition of her work on the housing crisis. Leonard began her newspaper career at the Belleville News-Democrat after earning a degree in mass communications from Southern Illinois University-Edwardsville, where she now serves as an adjunct faculty member. She is partial to pomeranians and Cardinals.