Finally, secure in their home

TIM MARTIN / Day photos Steve Bowen, 37, of Salem helps his daughter, Callista, 7, with her homework at their home last week.

Steve Bowen is looking downright laid-back these days.

Almost two years ago, Bowen, a single father who had moved himself and his daughter into their first home in 2006, was living in fear of one of the worst financial setbacks anyone can suffer: the loss of his home to foreclosure.

Beset with worry and worn out from unsuccessful efforts at trying to renegotiate his high-interest mortgages, Bowen was ready to give up and let his lender, Countrywide Financial, take possession of his small farmhouse in the Paugwonk section of Salem.

Late in the summer of 2006, Bowen bought the 100-year-old farmhouse for $163,000 and took out two subprime mortgages from Countrywide to cover the full purchase price. He borrowed $3,000 from retirement savings to pay closing costs.

By 2008 the interest rates on those mortgages had climbed to more than 11 percent, and Bowen, a dealer at Mohegan Sun who makes about $40,000 a year working nights, was falling behind on his $2,400 monthly mortgage payments.

"I was constantly behind every month," he said. "It was so stressful."

He originally took out the loans expecting his monthly payments to be under $1,000, which he said his real estate agent assured him they would be.

Desperate to keep his home, he tried to get Countrywide to drop his interest rates. But by mid-2008 the mortgage giant, one of the country's leading subprime lenders and one of the institutions blamed for helping to usher in the recession, had more serious problems to deal with than whether Bowen could meet his debt obligations.

He tried fixing up his house, hoping some sweat equity would increase its value and he'd be eligible to refinance. While he made some modest improvements, including installing a woodstove and fixing up the kitchen, real estate values were dropping too fast and he didn't have the necessary equity to refinance.

He was pretty much at his wits end when the recession settled over the country in earnest. That, ironically, is what finally saved Bowen.

Countrywide got bought out by Bank of America, which had developed several programs to help homeowners like Bowen. Last year Bank of America granted Bowen two new mortgages to replace the subprime loans he'd gotten from Countrywide. Under the arrangement, Bowen said, his interest rates on the two mortgages dropped from nearly 12 percent down to 3 and 5 percent.

His monthly mortgage payments fell to about $1,000.

Financially, life is still a struggle, Bowen said. It just doesn't feel like a desperate death match anymore.

He still works nights and has to take Callista, his young daughter, to a friend's nightly, and then pick her up every morning so she can catch the school bus from home. He sleeps when he can throughout the day, in between working on cars at his home to make a little extra money.

He's getting by, he said, and most importantly, he can pay his mortgage each month.

On a recent morning after getting his daughter on the school bus Bowen settled into the chair at the small wooden table in his dining room. He ruminated on how much easier his life is these days without the constant worry of making the mortgage. He reviewed his plans for the next day, Callista's birthday, tossing around the idea of a "girl's day" for Callista.

"Maybe I'll take her to get her hair and nails done," he said.

A small woodstove in one corner of the kitchen warmed up the three rooms that make up the downstairs, and Bowen's white German shepherd, Fergus, snoozed under the dining room table.

"It's been such a struggle and I was really afraid for a while," he said. "But everything has worked out for the best. I'm just so relieved."

e.mcnamara@theday.com

THE BACKSTORY

Steve Bowen could be a poster child for the subprime debacle that crippled our country's economy. In February 2008, Bowen, a single father, was struggling to make his $2,400 monthly payments on two subprime mortgages he took out to buy his first home in Salem. As the country teetered on the edge of the worst financial crisis since the Great Depression, Bowen, dispirited and distraught, was reconciling himself to the idea that he would lose his home. The Day interviewed him for part of a larger series about the subprime mortgage problems and the lack of programs to help people like Bowen.

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