“But then, of course, when the severance ran out, all you are getting is $400 a week and that wasn’t enough to pay the mortgage.”

“Evelyn Schellenberg lost her middle-management job in the Vancouver area at the end of 2009.
After a gruelling search, she found employment in August 2012, making about a third of her previous salary.”

“One of the things I did immediately, was.. I had a $20,000 line of credit on my credit card… I immediately dropped it to $5,000 because I did not want to go up to $20,000… I just knew that I wasn’t going to do that. So, to balance that out I had to start drawing on RRSPs to start paying for things… I lived on my severance… there was still some severance left when I was eligible for EI… but then, of course, when the severance ran out, all you are getting is $400 a week and that wasn’t enough to pay the mortgage. I owe my brother money, you know, to pay my mortgage. If I’d still been working through all this time… two more years on my mortgage…now, I’m even afraid to look…. probably eight years, on my mortgage.”
– from ‘How a Vancouver woman’s finances crumbled when she lost her job’, G&M, 7 Sep 2012

9 responses to ““But then, of course, when the severance ran out, all you are getting is $400 a week and that wasn’t enough to pay the mortgage.”

  1. This is an anecdote of job loss and income realignment. Real estate seems a sidebar. But… it does highlight how booking a gravy train as a permanent fixture, instead of, well, gravy, can and does cause pain.

  2. Just goes to show how many Vancouverites live a precarious existence… Out of a job… immediate panic mode… Big mortgage, line of credit as “emergency fund”… borrowing from siblings, exhausting RSPs… just so they can “live the dream” of being a homeowner in Vancouver.
    Why do so many people become willing slaves of the debt machine?

    • Because without the debt machine you’re seen as less by society. Even if you know that’s wrong, say it enough times and people start to internalize it.

      This is just a small sliver of the systemic problem of how we let ourselves become defined by the stuff we own (or are borrowing money to appear to own) rather than the things we do and the people we know.

    • Bo,
      – It has been 3 years since she lost her well-paying job. How long do you expect her savings to last so you wouldn’t call it “immediate panic mode”?
      – She is a few years away from paying off her mortgage. Why do you call it a “big mortgage”?
      I think you are not actually responding to this article at all, just talking to yourself about something else.

      • I’ll second that. 3 years is a long time w/o a job. It would take most people by surprise (financially). And it throws any plans out of whack.

        Even though in this case she seemed to have been living beyond her means anyhow — line of credit for…? But nonetheless, a difficult situation to be in.

        Even more so when she’s brainwashed to believe that selling her house, reaping the capital gains and renting would make her a bad person (or at least lower her social status by 100 points or something).

  3. This lady clearly had unexpected bad fortune in losing her job, and a difficult time seeking employment.
    It is arguably of interest that through the discussion the wisdom of home ownership did not come up. How would her circumstances look if she sold her home and rented? It seems that “paying the mortgage” took precedent over all other considerations.
    The speculative mania has led people to believe that RE is bedrock, and we fear that many will be distressed when that foundation proves less secure than imagined.

  4. I read so many stories like this in the US, many of which ended with the subject losing the house to the bank once the retirement funds were drained.

    Dipping into retirement funds to sustain a cash flow negative lifestyle is suicidally stupid, unless you’ve already done everything to reduce your living expenses.

  5. the women in their 40s, 50s and 60s, the avante garde of the feminist movement, seem to me the most vulnerable to the collapse in notional asset values. Bitter sweet for many men who have sat on the sidelines for over half their lives. The silver lining is that Canada spent an enormous price for boomers getting their fertility rates slammed, and this feeds a certain righteousness in dealing with the rest of the global apes wanting to grow their power thru the maternity wards.

  6. At minimum her mortgage payments were $1600 a month, which according to the BMO calculator is a $350,000 mortgage. Given that she has increased the amount of time left on her mortgage from 2 years to 8 years and owes her brother money, I don’t think it unreasonable to believe her mortgage was anywhere from $350,000 to $700,000. I could believe her home is probably worth from $500,000 to $700,000.

    Why on earth didn’t she sell her home and rent? She would have been left with half a million in cash, could have invested in bank stocks giving her 4% a year or $20,000 annually, and after taxes used that money on her rent. If she doesn’t want to give up the dog, then she finds a place that allows dogs.

    This way she has money in the bank to fall back on, and can move easily if she found a job elsewhere. Now she has dug herself into a deeper hole as the real estate market has begun to fall. She has no retirement funds to rely upon. If she could exhaust them, increase the mortgage term and owe her brother money then these retirement funds weren’t that plentiful to begin with, and she is damn near retirement age. Why wasn’t she saving a decent amount every year and tossing it into the RRSPs?

    What on earth was G&M’s point with this article; Older Women Are Fiscal Idiots? If it was to curry sympathy with me for the poor unfortunate lady, it failed spectacularly.

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