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Stressed and overwhelmed by debt? Learn how you can rebuild your finances and life. Miss Mazuma shares how she overcame $500k of debt, short sales, and found happiness!  

Rebuild Your Finances

It's the beginning of a new year and while so many right now are all jazzed up about knocking down their debts, saving more, or spending less, that enthusiasm will die down.

And if you still have a huge amount of debt or just a big goal you want to tackle when that happens, you can discourage. And in some cases, understandably depressed.

It's normal.

But what do you then?

How can you stay focused and climb out?

Today's guest, Miss Mazuma, is kind and brave enough to share her story. In this episode we get into:

  • how she got into so much debt,
  • have a look into the painful and frustrating process of a short sale
  • see how she work through this and came to a healthier spot

Her story is both encouraging and real.

If you want to hear from someone else who has dug out from a mountain of debt, please check out my interview with Toni Husbands. She shares how she and her husband got on the same page and paid off over $100,000 of debt.

Resources for Paying Off Debt

Want to learn more? Here are some resources to check out:

If you’d like to chat about your money moves for this year, you can join us in the Thriving Families Facebook community. We're a fun and supportive group.

We swap ideas, questions, stories, advice. When we try to help one another out with our family and financial goals.

We'd love to see you there!

Interview with Miss Mazuma

Miss Mazuma: And I'll say that's one of the things that I took pride in, you know, always up to that point was I, I never understood how people could get into debt. I never understood spending beyond what you make. I had never had credit card debt. My car was paid off. I mean, I still drive the same car today as I did back then at 16 years old.

I was never in debt and I took great pride in that. When I turned around, you know, after that 360, 003 years later, when I met my husband, we bought a house for 204, 000. So now I'm up to 500, 000 in mortgage debt. It's just, yeah, it's shocking for what, what I was making to have even been allowed to get those loans.

But the point. Of pride for me was that I put 20 percent down on all of those properties. I wasn't doing it the way other people were doing it. I was being responsible is what I thought. I was playing the game by all the rules and in the end I felt like the banks had changed them. Money

Elle Martinez: podcast, the show where we share stories and advice on building up your marriage and wealth. I'm l Martinez support for this podcast comes from Divi investments. How much do you hate losing money? I can't stand it and it burns me even more when it's for needless fees. I work hard and I want my money to do the same.

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You may not have to personally deal with such a huge amount of debt, but have you ever felt frustrated and down about your finances? It's the beginning of the new year, and while so many right now are jazzed up about knocking down their debts, saving more or spending less, that enthusiasm will die down.

And if you still have a huge amount of debt, or just a big goal you want to tackle, when that happens, you can get discouraged, and in some cases, understandably depressed. And it's normal, but what do you do then? How can you stay focused and climb out? Today's guest, Ms. Mizuma, is kind and brave enough to share her story.

In this episode, we get into how she got into so much debt. Have a look at the painful and frustrating process of a short sale and see how she worked through this and came to a healthier, happier spot. Her story is both encouraging and real. But we're going to take a step back so you can get to know her a little bit better.

Before the half million dollar mortgages. Mrs. M was a 20 something year old with a saving streak.

Miss Mazuma: I have to say, though, I have always been a natural born saver. It's who I am. I've always been frugal. I mean, even as a child, I would save every penny. I had this, like, tall Tootsie Roll bank, and I would layer my change in it.

Quarters, dimes, nickels, pennies, so that if anyone tried to take anything out, I knew exactly how much was missing. Like, I have saved everything. And so, for me, it was natural. Every year, I bought something new. Or every two years, I saved, and I'm Put a down payment on something that just felt like a natural progression.

Fast forward a bit.

Elle Martinez: So she's 24 and living with and his brother's girlfriend is a realtor and owns the two Unit apartment they are staying in

Miss Mazuma: so we became friends and she encouraged me when I was breaking up with that boyfriend That instead of renting I should buy a place And I had a great income now because I was working and, you know, I had this career and I'd be foolish to be wasting money in rent and so I listened to her and it did seem like a good idea.

Based

Elle Martinez: on her experience as a first time buyer, Mrs. Zim thought she could do a better job and help other buyers with their purchases.

Miss Mazuma: She wasn't probably the best person to have taken advice from in the first place. She kind of pushed me a little bit into things I wasn't all that comfortable with in terms of the price range and showing me places out of my range.

And so I thought, you know what? I could do that better than her. So I became a realtor. And that led to a new passion. Becoming a realtor was exciting. I would have all this access to all these properties and I loved looking at them. I just, I loved real estate. I fell in love with it. And so after I bought my first place, I was then a realtor.

And when I decided to move to the city, I thought, well, I can find my own place now. And so I looked at everything. I mean, I was so excited and I just kind of snowballed after that. I fell in love with the career of that and kind of built myself up and thought. You know, I could get a mortgage and they're telling me I could get a mortgage and I could afford this.

So why not go for it? But you know during that time with everything, you know hitting the housing bubble and everything going up up up You think that's such a great ride to be on, you know, if this is going to turn out great I'm going to make a killing in this and when rents don't go up as fast as The property values are going up or when that bubble bursts and everything goes down you get stuck in a little bit of a circle.

Elle Martinez: As she's buying up places, she's acquiring more loans, loans that have to be

Miss Mazuma: reviewed by banks.

I can't even remember what I was making back then, but I know that when the, my first realtor had told me I can afford a place that's 150, 000, I thought, there is no way, like that's a huge sum of money, you know, for me, a brand new flight attendant, I think we were making like 18 an hour at the time and I wasn't working all that much.

After 2001, when I was hired, we had a lot of flight attendants and not a lot of flights because the whole airline industry had slowed down. So it wasn't working all that much. And I was like, there is no way I could take on a loan that big, but that's what they approved me for. And I think the first place that I bought, I wound up buying for 107, 000.

So I definitely did not stretch my limits. But once I sold that place and bought. In the city, the first place was 100, 000. The next year, which I think was really six months later, I bought another one for 100, 000. And the year after that, I bought one for 159, 000. So, in three years, I purchased for 359, 000, put 20 percent down on each of those properties.

There is no way that the bank would have allowed me to take out a 370, 000 loan. There's no way. But the fact that I did it small in increments, they weren't, they didn't think anything was strange of that.

Elle Martinez: And the properties along with the mortgages add up fast.

Miss Mazuma: When I turned around, you know, after that 360, 000, three years later, when I met my husband, we bought a house for 204, 000.

So now I'm up to 500, 000 in mortgage debt. It's just, yeah, it's shocking for what, what I was making to have even been allowed to get those loans. But the point prior for me was that I put 20 percent down on all of those properties. I wasn't. Doing it the way other people were doing it. I was being responsible is what I thought, you know I was playing the game by all the rules and in the end, I felt like the banks had changed them So I took all of that Pain and suffering that I felt in the end and I put it all towards them and blaming all the banks for everything When really I was the one who signed it all I did it myself, but I didn't think of it that way at the time With a situation

Elle Martinez: like this, it is normal to get depressed and just feel overwhelmed with what's going on.

The danger to your finances, your health, and well being is staying trapped in that moment. There was no easy way out, but Mrs. M began to fight back.

Miss Mazuma: After we bought the house and the tenants stopped paying or moved out and I couldn't rent it again for anything close to what I was renting for it was a big eye opener and I knew things in my marriage weren't going well.

And I knew that that was going to change, you know, part of the future too, was that I was going to have to move out. And at first I kept paying everything on my own. And my husband's like, if you keep doing that, you're going to be bankrupt. And, you know. We can't let the house go. The house was the one that we'd bought last.

So you can't let your primary residence go for your income, your rental properties. And they weren't at the time doing loan modifications for rental properties. And I fought hard. I mean, I called them every day. I sent him packets of information and everything that I possibly could. And. What it came down to was if you didn't skip your payments, they couldn't modify you at all.

And so, and I asked Lee, I said, so you're telling me that I have to skip payments in order to do any kind of modification. She's like, we won't even consider you until you miss a payment. Wow. So that was, I know. And in, in years, I think it started to change a couple of years after that, because this is at the beginning that they did start modifying those loans.

But for me at the time they weren't, and because I had three properties all, In the same position, I couldn't keep them all afloat and I couldn't choose between one or the other. You know, the one that I would want to keep was the one that there was still someone in who couldn't pay. And then the one that was vacant was the highest.

Cost one that I couldn't rent for what I needed to. So that was the first to go. The last condo that I bought was the first to go. And and then the one that I wanted to keep was the second to go. And then the last one, thankfully hung on as long as it did. Because when my, my husband and I were separating.

He said he didn't want to keep the house and that he wanted me to take it. Well, the pink wouldn't let me have the house because now I'd had two short sales, so we couldn't refinance and get it into my name and it wound up that he was going to keep it. So I left, he gave me 5, 000 payout and I moved back into.

The last unit that I had still available, which happened to be the second unit that I had bought. So that was already behind on payments and I had purchased that unit. I had never lived in it and I purchased it as an investment property. So, to change the loan on that, which had a higher interest rate.

I had to modify it and they said because I had purchased it as an income property, I could not modify it. So I was stuck. Yeah, completely stuck. Both other properties were gone. My credit was now shot. I lost my house to my husband and I'm in a property that I can't modify. If you're not

Elle Martinez: familiar with a short sale, it can be a tremendously difficult process with messy implications.

Miss Mazuma: It was, it was awful because, you know, a short sale is not an easy process. There's a lot of paperwork. They harm you constantly, they harp on you constantly. Several phone calls a day. If you ignore them, they just call more often. Every time they call, it's a different person. Every time you send paperwork, paperwork to them, something's missing.

And even if I took copies of everything that I sent, they would say, no, you're missing this page. And I would say, no, it's page number this in the packet. No, we don't have that. You know, it was so frustrating that you just want to, you just want to give up. And, and I didn't, I mean, I kept, I kept with them for this went on for over six months.

And finally I said, just send me, just tell me where to send the keys. I'm like, well, it doesn't work that way. I'm like, I understand that, but I just, I don't want to be here. I don't want to be here anymore. And I just waited for them to eventually they got a offer that they rejected. And it was, I think it was like 65, 000 or something.

And in the end they wound up taking 47, 000, like four months later. During

Elle Martinez: this time, she had to make some tough choices.

Miss Mazuma: So all that time because I knew that I couldn't make the payments because now I'm already Behind in them in order to make a payment you have to pay. I don't know what they were asking I can't remember the amount but I just I just stopped paying and I saved every single bit of it I paid the taxes and assessments because I didn't want to you know Screw my neighbors, but I just saved all my money for those, I don't know, it might have been at least eight to twelve months.

Elle Martinez: Finally, the condo sold and a new chapter

Miss Mazuma: began. When it was sold, it was this relief, like, okay, I can start rebuilding, I can get on with my life, because you hit this wall of depression, which I'd never had before, you know, even with the divorce. It didn't seem as bad to me as losing my properties, losing all my money.

I thought, you know, I had rebuilt before, but this was. I didn't even know what shovel to pick from my arsenal to dig my way out of this hole. And so when I wound up selling that place, I had a month gap in between when it sold and when my new apartment would be available. Thankfully, a friend in the building that I was living in, the Place where I'd lost my properties.

She was moving out and so she told me about it and I contacted her landlord and I said, look, you can run my credit, but I tell you right now, it's going to be terrible. I have no credit card debt. The only problem is these mortgages. You know, I got stuck in this bubble and he was also a realtor. And I said, I will pay you six months up front.

I'll pay you a year up front. I just need a place to live. And he said, that's not necessary. I think he had me pay two months up front and extra security deposit. And yeah, it was perfect. He was very kind to do that. So I had a month off in between and I wound up going to Spain. I'm a big hiker. I love long distance hiking.

And they have what's called the Camino de Santiago there. And it's a 500 mile pilgrimage all the way across Spain. And it takes about a month to do, maybe 30 days. 32 days, and I just walked my butt off. I walked in 23 days, 500 miles, you know, yeah, I can say I was, I was fueled by all the thoughts in my head and just trying to unravel everything, but also trying to find out, you know, part of it was forgiving myself, you know, and that takes a long time to do sometimes, especially when you don't want to admit that you were the cause of all this, which I was, I get it.

But that realization. It hurts. Taking

Elle Martinez: some time off and having years to process everything, Mrs. M has gained perspective.

Miss Mazuma: And there's, you have, you really have to forgive yourself first to be able to move on from any kind of debt you've gotten yourself into. Sometimes that's just trying to fill a hole or a void.

Buying things, buying houses for me was trying to buy a home, you know, a home that I didn't feel anywhere else in my life. I didn't feel that completeness. And I put a whole bunch of money into something that would never fill that hole. So. Taking that walk, I learned a lot and I came back ready to kick some butt and start saving more and clean it all up.

If you don't really shine a spotlight on it, you'll never get over it. You'll never be able to realize, okay, maybe what I need, I can't buy, but at least I know that that's what I'm looking for. At least I put that identification to it. And for me, I mean, home to me, heck, I've, I've moved pretty much every two years.

Since my parents divorce every two years. I don't think I've stayed in and I'm 38. So that was a long time ago You know home to me is isn't really a house anymore I just you have to be okay with who you are and what you are and I know that I am a Good person when I'm moving about I like that feeling I like to not be completely settled And I learned that with my properties too.

I bought one every two years When, er, every year for a while there, and I had no intention of staying in them. What was I doing purchasing properties I knew I wasn't going to live in? It was just crazy. Things aren't perfect,

Elle Martinez: but they're looking so much better. Her credit score has gone up, and even though she has another year before she can get a mortgage, she's doing quite well with her finances and has built some savings.

And she's found love, not only in a relationship, but with herself.

Miss Mazuma: There's so much that I do now that which I've always done, you know, I eat on the cheap, I always pack my lunch, I do frugal activities, and That's who I am. I don't need a bunch of things to make me happy. I don't need a house to make me better person or bigger person.

You know, I'm comfortable with where I am now.

Thanks to Our Partners

Support for this podcast comes from partners like Empower. Easy to set up & easy to use. You can have all your investments, income, and expenses all pulled into one place.

Did I mention it’s free? Why don’t you give Empower a try today?

Music Credit

Like the music in this episode? Our theme song is by Gentle Regime. I also want to thank Lee Rosevere for music in this episode.

This episode was originally publish in January 2017. The show notes have been updated February 2024.

About Elle Martinez

Elle Martinez helps families at Couple Money achieve financial freedom by sharing tips for reducing debt, increase income, and building net worth. Learn how to live on one income and have fun with the second..

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