Dec
4
Mortgage Bailout Plans and Schadenfreude
December 4, 2007 |
My wife had an interesting tale to relate from a weekend of Christmas shopping, which basically boiled down into bumping into the mortgage banker that we used for the last two loans at a local retail outlet. Except, umm, she didn’t recognize him at first, as he was working there, not shopping.
Which I suppose is your anecdotal evidence that things are rough in the world of real estate all over, even here in central Texas where we’ve avoided a lot of the carnage. In this particular case, though, I think it’s much more an example of why it’s good not to burn bridges, especially in small towns where everyone knows everyone.
I’m too lazy to dig up the actual post, but I was fairly pissed at the last loan we got from this guy, as he pulled a bit of a bait and switch with me. He was very aware of my goals and objectives yet somehow or other when we switched loan products mid-stream he neglected to tell me that the loan we ended up going with carried an absurdly high loan origination fee. When this became apparent at the very last minute and an explanation was demanded, he fell back on the “But it’s an investment loan, yada yada yada” spiel.
Which, to be fair, has some validity, but the real issue wasn’t that so much as failure to communicate that there were some key differences between the two loans I was considering, and the lack of a GFE provided to me for the loan we went with (but one provided for the original loan I considered).
Also muddying the water was that the mortgage banker (who’d moved to our small town just a year or two earlier) already had a few black marks on his reputation due to his girlfriend (a realtor) basically blatantly stealing some listings from another local agent. Our realtor let me know about all that when we were looking for our last loan, but I ended up going with the guy again, as I was happy enough with the first loan we got through him for House #1.
When I told our realtor about my wife buming into mortgage banker guy while shopping, I was kind of surprised at his immediate “And that’s why you don’t piss on people in small towns” reaction. Turns out I wasn’t the only client of his recently that was suddenly surprised by an unexpected loan origination fee, even for traditional mortgages that weren’t investment properties or anything exotic at all.
Lots of talk in the news about mortgage bailout plans, which I have to admit I have pretty mixed feelings about. It’s just such a hot button topic of late, as either side of the debate can trot out great examples of predatory lending and struggling homeowners that truly deserve a break, as well as the flip side of lazy, greedy folks suffering from Serinitis and debt up to their ears who fully deserve exactly what foreclosure hell they would otherwise suffer.
Emotion aside, I can’t think of many examples where bucking the free market trend worked out well, so I suppose I’m against bailout plans for that general reason. If there’s excess in the market that needs to be flushed out, it’s better to flush it out now than delay the inevitable, so that hopefully we can get back to a reasonable state of equilibirum where things make sense. The longer the doom and gloom drags out, the longer buyers are going to stay on the sidelines, and all the bailout proposals I’ve seen just delay the inevitable, and don’t address any of the root causes that lead to people living in houses they can’t afford to live in.
Then again, I’m not getting foreclosed on, so that’s an easy and convenient belief system to uphold.
Still plugging away at House #2, although I switched over to painting to give my still protesting back a bit of a break. One odd thing that I finally realized last night is that other than ceilings, nothing in House #2 is painted white. Pink; salmon; all shades of yellow; sky blue; weird tan colors, yep, present and accounted for. White; nowhere to be found. Which probably explains why painting simple white trim has been giving me so much pleasure over there, and keeps me remarking “Damn, this looks so much better”.
Comments
2 Comments so far
I think bailing people out of their mortgages is a horrible, horrible idea. It’s like rewarding a kid for bad behavior.
I don’t think anyone had a gun held to their head when they were signing their mortgage papers. People need to step up and deal with the poor decisions that they made instead of blaming everyone else. It’s your loan, you signed for it, now deal with the consequences.
This is karma for you.
People, such as your mortgage guy, don’t have any scruples about trying to pull a fast one and screw some people out of a few extra bucks.
Customers have very long memories when it comes to money and being screwed.
Evidently it wasn’t worth it.