This is a true story, but I have changed some of the details to protect the people involved.

This is an up close and personal look at foreclosure as it happens to real people. I will admit my own bias, which is that the banks are guilty of bad behavior and have poor business acumen.

This is a true story about a couple who bought a little house in 2003 for $120,000 — they qualified for a special homeownership assistance program and may not otherwise have been able to afford the home.

Four years later, their lives had changed and their mortgage payments were almost impossible to afford. The home still needed a new roof and a furnace.

They talked about selling and called their Realtor, only to discover that their home was now worth less than they owed on it. They did not have enough money to sell the home. She moved out, they split up, and he got a roommate when she stopped paying her share of the mortgage.

He limped along for a few more years, trying to keep up with the repairs and the mortgage. He got behind on his payments. He talked to the bank and asked for a loan modification. He was repeatedly told he could not get the modification because he was behind on his payments, and even though he struggled to get caught up he could not.

The mortgage payments were simply more than he could afford. If this had all happened a few years earlier, the couple could have sold the home and moved on.

After struggling for a few years, he gave up and walked away, but not before his credit rating was ruined. He found a small apartment and his housing costs were cut by 50 percent.

He has since moved up to a nicer apartment, which is actually bigger and nicer than the home he had, but the rent is about 80 percent of what his monthly housing costs were when he was paying a mortgage.

The bank foreclosed on his loan and took possession of the house, later selling it for $25,000. I am not making that up: $25,000.

Really? The bank couldn’t modify the owners’ loan, but the bank could afford to pay the legal expenses and take that home, originally purchased for $120,000, and sell it for $25,000?!

The people who bought the home refinished the floors, put in a new furnace and a new roof, painted the kitchen cabinets white, and resold the home for $45,000. The original owner would have had no problem making payments on a $45,000 home that did not need any repairs.

This story plays out every day across the country. The mortgage agreement is a bilateral agreement in which the borrower agrees to pay, and if the borrower does not pay the bank can take the property.

I don’t think either party anticipated the great housing crash when they signed the contract.

When the housing market crashed, had the banks modified more loans maybe more people would still be living in the homes they bought and the banks would be spending less on legal fees and taking less of a loss — and just maybe, home prices would be higher and maybe the economy would have recovered last year or the year before.

Now, the economy is starting to perk up a bit but home prices are being held down by foreclosures.

Even though the inventory of homes on the market in my area is low, prices have not risen — and they will not go up as long as low-priced bank-owned properties are still so plentiful.

There are vacant properties in my neighborhood that are bank-owned and that are not yet for sale.

It will take many years for the housing market to recover, and the banks will continue taking back real estate and selling it for a fraction of what is owed on it.

Some people will end up owning homes that they would not have been able to afford a few years ago, while the prior owners become renters and in some cases end up paying more for rent than the new owners of the home they got thrown out of.

When is the insanity going to stop? Why can’t banks negotiate with current owners who are behind on their payments but have jobs and can make payments? Wouldn’t the banks come out ahead? When is this going to end?

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