KEY POINTS:
First, they borrowed $540,000 from the bank to renovate their home. Then they discovered the work was never-ending and they could not keep up the mortgage repayments.
Now they are about to lose their inner-city home, and they still face a large debt.
It's a story typical of the mortgagee sales now becoming commonplace in Auckland.
"I should have stopped with the bathroom," says the husband, 44, of his renovation dreams. He has had two heart attacks and a stroke and has not been able to work for more than two years.
His wife, 41, is perched on a chair beside him, shaking her head in disbelief, talking quietly, wiping away tears.
They are not alone. Mortgagee listings on one of the biggest property websites, realestate.co.nz, have soared from about 50 a year ago to 270 this month, as banks call in outstanding loans and consider bankruptcy proceedings against those whose places fetch much less than they borrowed.
This couple are so ashamed that they would only agree to talk anonymously. They are worried about fallout for their wider family and already a relative has ripped out a big sign shouting "mortgagee sale".
The old white three-bedroom weatherboard house, in the wife's family for two generations, was inherited eight years ago with a $200,000 mortgage, which the pair were able to manage.
Then they decided to renovate. The changes were extensive. The place has been a pit for money.
And that has been their undoing.
"You went to borrow $10,000 but the bank said to borrow $50,000," the husband said. "They said we were nowhere near borrowing 95 per cent of the house's value and we were going along all right there for a while."
First, they upgraded the bathroom, which was in a poor state. Then, they found the house needed re-piling and that other areas, such as the kitchen, needed work.
Now, with little income, they are six months late with mortgage repayments which are $4100 a month.
At some stages, up to 11 people have been living in the house because of the extended family's needs.
The couple have three boys and the wife's mother also lives with them. But the wife leaves tomorrow for Sydney where two sisters live. There, she will hunt for work.
Her mother is destined for a state house.
The husband plans to stay in Auckland until January, mopping up the financial mess and meeting the bank's requirements of setting up a post-sale repayment schedule.
The wife does not see herself buying a place in Sydney. This neighbourhood, its parks and people, is where her heart is - the only place she's ever called home.
Although they say the bank has been helpful, the couple are dreading the possibility of the house selling below its valuation, which they confess is only $480,000.
Quotable Value has the property's worth made up of $440,000 in land and $40,000 for the house - despite the couple's $340,000 efforts.
This much-loved family house appears dilapidated from the outside in online advertisements. It is being advertised as a renovation purchase.
As well as the $540,000 mortgage, the couple have a further $20,000 in debts including an $8000 credit card bill.
"It's given us a wake-up call about managing things properly," the husband said.
Westpac's media relations manager, Craig Dowling, said the bank tried to avoid foreclosure at all costs.
"The outcomes for the bank or its customers can be compromised, so it's a last-resort course of action. But very occasionally such actions can't be avoided because ofthe responsibility the bank has to operate profitably ...
"We recognise the stress this means for people facing mortgagee sale. We act professionally and with empathy and expedite things in the way that gives the best outcome."
