Homeowners in default make tough call

Amid the moving boxes, tape and markers, Melanie and Steven Fugate felt they wanted it all or nothing. Then reality set it.

They wanted full value of their Carol Stream home, but instead were forced into a quick sale to avoid foreclosure and the impending DuPage County sheriff's auction block.

The couple didn't have $248,000 to pay the mortgage or the means to get that much. They have no income, no resources and no money.

The two believe they fell through the cracks and must pack up their lives and move after nearly three years. They feel this will follow them for a long time as they emerge from the black hole of foreclosure.

"The people getting this home are benefiting off of us greatly," Melanie Fugate said.

Now, where do they go?

The Fugate family, featured last November in the Daily Herald's The Dream Foreclosed series, was struggling to stay afloat amid foreclosure proceedings.

Melanie's salary from a former research job wasn't enough to pay the mortgage and help support her three kids. Her husband, Steven, has been ill from hepatitis C and liver disease and couldn't work to support the family. He was denied disability but they've been appealing.

Since their story was first told, foreclosures have continued to rise. RealtyTrac, which collects data on foreclosure properties, reported 2.2 million foreclosure filings -- including default notices, auction sale notices and bank repossessions -- were reported on 1.3 million properties nationwide during 2007, up 75 percent from 2006.

In Illinois, 2007 showed 90,782 total filings on 64,310 properties, 25 percent higher than 2006.

As a way to raise equity, the Fugates sold many personal belongings. But their biggest item, their home, also had to go. They put it up for sale themselves for $289,000 last August. No one came. This is one of the toughest housing markets in 25 years, according to a National Association of Realtors report.

So the Fugates hired a Realtor, hoping her expertise would overcome a tough real estate market. They listed the home for $289,900. Still, no one came.

They dropped the price a few times until it was last listed at $249,000, enough to repay the mortgage company and other fees.

They didn't realize how much lower it would be forced down. Some interested buyers low-balled the price, one for $200,000.

"Some came walking in here with no card, nothing. They were vultures," Steven Fugate said.

As the foreclosure process proceeded, the Fugate home was slated for the auction block Jan. 8. They returned to court seeking an extension to Jan. 17. But instead of facing that date, the Fugates got an eleventh-hour offer on their home for much less than they needed. They declined to discuss the sale price. It was approved by their mortgage company.

"They just ran out of time," said Donna Kosmas, the Realtor with ReMax Cornerstone who handled the Fugate home.

Once the Fugates accepted a bid, Kosmas asked the sheriff's office to stop the auction.

"Foreclosures are always very difficult, so we try to keep the families encouraged that there's life afterward," Kosmas said. "We hope we can do our best for their credit and their future."

It's a hard decision to make, either accepting a low bid or seeing your family home auctioned to the highest bidder, she said.

"I don't want to push them," said Kosmas, who has known the family for a few years. "It's their life, their decision. I'm just the mediator here."

A lot of emotions go with this job, said Kosmas.

"There are a lot of hurting people now and you want to help them all," Kosmas said.

After the sale closes March 17, the Fugates must leave. They've been searching for an apartment but without income they don't know how they will pay the rent.

They sought help from U.S. Rep. Peter Roskam, Gov. Rod Blagojevich and several agencies but without success to date. They continue to look for potential housing for the family.

"This is finally hitting me and I've been crying," Melanie said. "I'm losing my house and all of my hopes and dreams."