The Way It Is

In the middle of January, 2009, a couple in their mid-30’s had to use the Steele County Food Shelf for the first time in their lives. This is their story.

Both husband and wife have been married before. She has three kids from her prior marriage and he has two kids from his prior marriage. He pays $700.00 per month in child support.  She has joint custody and doesn’t pay or receive any child support. They have had two kids together since getting married 11 years ago.

Both husband and wife have been employed by the same Owatonna employer for the past 15 years, or so. They both used to work a lot of overtime. Overtime used to be mandatory, requiring them to work a 6 day week during the summer months. Lots of additional, optional overtime was available and they took advantage of it and worked a lot of it.

In July of 2007, considering their overtime pay, the couple felt confident in entering into a “lease/option to purchase” agreement on a house. It was a beautiful house and they thought they were getting a good price at $140,000.00. The lease/option agreement was described as requiring, at the start of the deal, a down payment of $4,200.00 and monthly payments of $950.00 for a year. After the year, they would obtain permanent bank financing. Of each monthly $950 payment, $800 was to be “rent” while the other $150 was to go into an account to be added to the $4,200.00 to form a total down payment, by year’s end, of $6,000. That would be, they thought, sufficient to obtain bank financing a year later in July of 2008. Before entering into the deal, they checked with a few lenders and were assured that, in one year, financing would almost certainly be available to them if they made the lease payments and finished adding to the down payment.

As July of 2008 approached, the couple sought bank financing and was turned down as the credit market had changed. To make matters worse, they reviewed their “lease/option” and discovered that they were paying $950.00 per month in straight rent and there was no mention of the $150.00 per month escrow as additional down payment. They weren’t able to get the financing. They lost the $4,200 down payment. They lost the house. Their landlord let them hang on a bit after July, but ultimately they moved out in October. They moved into a 2-bedroom apartment where they pay $600.00 per month, plus utilities. It is ironic that losing the home may have almost been a good thing considering how seriously far south their finances have now gone. The utilities, alone, in the dream house they were purchasing, were a good $500.00 per month, every month. The apartment utilities and the apartment rent now are affordable while the house expenses, given their reduced income, would have caused them to lose the home at this time instead of last summer.

Recently, the couple was laid off for one entire week. They then returned to work, but at just 32 hours per week with no overtime. Losing the one day per week, alone, means that the couple is out 16 hours per week at $18.00 per hour or $288.00 each week. That works out to approximately $1,238.00 each month. They feel that they have lost well over 1/3 and maybe as much as half of the take-home pay they enjoyed as recently as the summer of 2008.

They are worried that things could get worse. They currently have a car payment of $277.00 and a truck payment of $282.00.  Car insurance is $1 80.00 per month. The husband says that one of the vehicles “has to go, for sure”. Their health insurance premium is about $1,000.00 per month. Things are tight.

While this is their first trip to the Food Shelf, they smile and nod their heads, confirming that they may become monthly regulars if they are not able to get rid of either the car or the truck and the limited hours continue or even shrink.

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155 ~ OAKDALE STREET OWATONNA, MN  55060 (507) 455-2991

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