One Day at a Time

We have suddenly found ourselves in a position that I would never have expected us to be in with this remodel. We both have good jobs, we're financially solvent, we have excellent credit, we have been with the same bank for many years, and yet, suddenly, we find ourselves with our line of equity frozen, in the middle of having our house torn apart.

Due to the housing market crisis and the losses big banks are posting, almost every bank across the country is freezing all home equity loans. Apparently, though, they're following a typical senior management policy of reacting without paying attention to the smaller details of what will this really mean, not only for customers, but for the staff who have to deal with the fallout.

We found out about the situation last Tuesday. We were supposed to have received information in the mail, but hadn't. A service representative caught the Husband at work to apprise him of the situation. When he explained that we're in the middle of a remodel (that will increase the value of the house, but that has currently rendered the house unsellable at this moment in time), he was referred to that person's manager. At that time, the Husband was assured that there should be a process in place for this kind of situation and that our case would be reviewed and that we would hear back in about 5 days.

Yesterday was day 7, so we called. Apparently, the manager with whom the Husband spoke was not authorized to say such things; the underwriters sent him a response saying he needed to contact us to explain {I'm fuzzy about what he was exactly supposed to explain]. In a compounding of errors, it turns out that person can't make outside calls, and the underwriters should have known this. Long story short, we were never contacted.

So now, we have to send the bank details about the project and they'll review the case, supposedly in another 5-7 days. If they decide to unfreeze our loan, we'll probably also have to schedule an appraisal in order to actually access the money. So we're looking at probably another 2-3 weeks.

The good parts of the situation:
1) We have a contractor who is willing to work with us (after all, this situation will significantly impact his business, too).
2) Because of the good jobs mentioned above, we could scrape the money up to finish (we're about 80% done at this point).
3) My mother can loan us some of the money to finish, at a much better interest rate.

The bad parts:
1) We've been living in the living room of our house for nearly two months, which means sleeping on a futon.
2) We haven't had a shower in our bathroom for that amount of time (we have a temporary shower situation in the basement, but the hot water hose split last weekend, so it's getting very important to get the upstairs bathroom completed).
3) We'll be borrowing money from family. That's not necessarily bad per se, but I'd rather owe the bank than friends/family.

The future impacts:
1) If we scrimp and save and finish ourselves, that means we will probably not be paying off our credit card, which means interest and a higher balance that we will still have to pay off.
2) If we ever find ourselves getting a home equity loan again, we'll just take the money and run rather than using it as a line of credit. Again, that means more interest that we'd have to pay.

So, while we are extremely lucky in that we can finish the job, and we can tell our contractor to keep working because he'll still be able to pay his subcontractors, it's just a sucky situation that we did not quite anticipate. Bleah.