Florie and Ray Gage are a real estate team in Fort Myers, Fla. Despite their well-paying jobs, they were unable to refinance their retirement home and are facing foreclosure.
Florie and Ray Gage are a real estate team in Fort Myers, Fla. Despite their well-paying jobs, they were unable to refinance their retirement home and are facing foreclosure. David Greene/NPR
Near Fort Myers, Fla., husband-and-wife real estate agents Ray and Florie Gage are losing their retirement dream home to foreclosure. But self-described vagabond Jim Foutz just bought a house for $88,000 — and the Gages helped him make the deal.
The Gages bought their house in 2003 when they moved from Michigan. Florie's 60; Ray is 70 — and their house screams Florida retirement.
"Our colors are yellow, orange, lime green, aqua — and it's just a very tropical feel," Florie Gage says. There are palm trees painted on the ceiling and there's a tiki bar in the corner of the living room.
"So this is just who we are," she says.
But pretty soon the Gages will have to find a new tiki bar. When you think of a couple facing foreclosure, the Gages don't fit the stereotype. They're financially secure. They've been homeowners for nearly three decades. They're successful real estate agents.
Here's how it happened: They bought the house for $287,000. They got an adjustable-rate mortgage so they could use the cash they saved to furnish and decorate. Then, when their interest rate adjusted up, they applied for a conventional fixed-rate mortgage.
The couple was approved for a loan with a 6 percent interest rate — "no problem" — Florie Gage says. But the appraisal required to refinance came in at $235,000 last year. Now appraisals in the area are running $180,000.
Cutting Their Losses
That's the root of the problem. The foreclosures happening all around them in Southwest Florida devalued their home. In order to refinance, the bank wants them to make up the difference — on top of a 20 percent down payment.
"You know when you're 70 years old, you're not going to take $40,000 or $50,000 out of your retirement into a market that you're not sure what's going to happen," Florie Gage says.
If they could get a 7 percent rate on the amount they originally owed, the Gages say they'd be able to afford their house. But the mortgage company wants more than that. So the Gages are cutting their losses.
"So now they've started the foreclosure and we're expecting a sheriff any day," Florie Gage says.
After a lifetime of owning homes, the Gages are preparing to spend their golden years paying rent. Still, as painful as the situation is, Florie says there is an upside:
"It makes me a much better real estate agent," she says, "because I will never allow one of my clients to be in this position — never. I have put a couple young people into first-time homes. I get them approved with a good fixed rate for 30 years! And that makes me feel good. I know they'll never lose their house."
'A Personal Mission'
When he met Florie Gage last summer, Jim Foutz wasn't even shopping for a house; he was helping his brother-in-law look. But she made a project out of Foutz. In this upended market, she was convinced she could find him a house for not much more per month than he was paying in rent — $750.
"I want to tell you how great Florie is, because I never thought I could ever own a house — period," he says. "She kept saying that it was a personal mission of hers to get me in a house," he says.
Gage accomplished her mission. Foutz's house was built two years ago for $248,000. Now it's valued at $148,000. He got it out of foreclosure for $88,000.
"I was 42 years old, didn't have a retirement account, didn't have any savings, didn't own a house, didn't own anything," he says. "Every now and then you kind of think, well, what's the future hold for me? My life, since I bought this house, has totally turned around."
Foutz's house couldn't be more different than the Gages'. There are no custom-painted seascapes on the walls. They're bare and beige. Never mind tiki bars — some of the rooms are completely unfurnished. And the neighborhood — Lehigh Acres — is one of the hardest hit in Florida. It's eerily deserted — a foreclosure ghost town.
But none of that bothers Foutz. He enjoys the quiet and the isolation.
"I am living the epitome of the American dream," he says. "And this is my little island. This is my fortress and my solitude right here. And yes, I am living the American dream, no question at all."
Foutz can count about 41 places where he's lived. Even as a child, not one of those belonged to him or his family. Now he enjoys walking around a chunk of land that he owns and imagining all the things he might do to it.