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Today, we’re going to discuss the mortgage crisis, seeing as how it’s the biggest news story out there that doesn’t involve Angelina Jolie’s uterus.
Every day the papers are filled with sad financial stories about how some struggling family may have to give up their four cell phones, new Lexus SUV, three jet-skis and yearly trip to Italy in order to keep their house.
These kind of sacrifices leads a reasonable person to ask two troubling questions:
1) How did this poor family get into such a mess?
And
2) How much do they want for that SUV?
So, let’s analyze the mortgage crisis, the origins which can be summarized as follows:
1) Congress told lenders to give loans to more people.
2) Lenders gave out loans to more people.
3) Some people didn’t pay back their loans.
4) Congress got mad at lenders for giving loans to more people.
A few years ago, it was very easy to get a loan. You could be out driving around when you’d find yourself needing to use the bathroom. So you’d pull up to a random business which happened to be a mortgage company, and you’d ask to use the rest room, and they’d say, "sure" and you’d strike up a conversation with the employee in the stall next to you, and by the time you flushed, you’d have a 30 year mortgage at 6.25 percent with 1 point origination fee.
Needless to say, some companies weren’t real picky about the credit checks either:
MORTGAGE APPLICANT: "Hi. I don’t have a job and I’m not looking for one. Besides massive debt, I have a serious heroin problem and I declared bankruptcy 12 minutes ago."
LOAN OFFICER: "Here! Take all this money. Please!"
But now it’s not so easy. You have to at least THINK about getting a job. That’s because of the "credit crunch," which is not to be confused with Captain Crunch. And why is there a "credit crunch" you ask? Because, of all the foreclosures. Guess how many folks are getting delinquent. One out of three homeowners? One out of two?
According to RealtyTrac.com, last month, one out 501 homeowners received a foreclosure filing. Do you realize what that means? It means you have a better chance of getting assaulted by a sea otter. But here in the newspaper business, we can’t run headlines that read,
SHOCKING NEW REPORT: 500 Out Of 501 Homeowners Pay On Time
So instead, we focus on the one person defaulting, and about how after the mean old bank is done with them, the poor family is going to have to (amongst other things), get rid of their satellite dish, which will leave them with only expanded cable, (as if THAT’S humane). Plus, the bank will probably take away other assets, including little Tiffany’s kitten and put her up for auction. ("Next up is this cute kitty named ‘Muffin.’ Who will give me 20 for her?...20..20...25..I see a 30...30....35...")
Not that I’m making light of foreclosures. As a kid growing up in Grand Junction during the 1980's, many of my neighbors lost their houses.
For example: We had some neighbors across the street who were very odd. I don’t think the husband owned a shirt. He’d ignore yard work and scratch himself in inappropriate places while carrying a beer around with him all day. It was like looking at a future version of me. His wife yelled at him a lot, too, which is maybe why he always had a beer.
Anyway, like I said, they were kind of strange. Then one day they got foreclosed upon and had to move. And I’ve noticed that when people get evicted, they don’t exactly tidy up the place and leave it sparkling clean for the new occupants. They tend to be mad at the bank, and want revenge. And boy, did my neighbor sure show them.
He not only took the appliances with him when he moved, he (true story), even took the light bulbs. This, I’m sure, was devastating to the company that held the mortgage:
Mortgage headquarters in New York.
ASSISTANT: "Sir!"
CEO: "What’s the emergency?"
ASSISTANT: "It’s the Johnson family in Western Colorado. When they moved out, they took all the light bulbs!"
CEO "What?! No! Those are 49 cents each. How am I supposed to explain that to the board of directors?"
So, hopefully, we’ll all get through this huge crisis. Because it can happen to anyone. It can happen to me. I could get foreclosed upon.
If so, those jerks aren’t getting my light bulbs.
Steve Beauregard can be reached at beauregardsteve@hotmail.com.
Every day the papers are filled with sad financial stories about how some struggling family may have to give up their four cell phones, new Lexus SUV, three jet-skis and yearly trip to Italy in order to keep their house.
These kind of sacrifices leads a reasonable person to ask two troubling questions:
1) How did this poor family get into such a mess?
And
2) How much do they want for that SUV?
So, let’s analyze the mortgage crisis, the origins which can be summarized as follows:
1) Congress told lenders to give loans to more people.
2) Lenders gave out loans to more people.
3) Some people didn’t pay back their loans.
4) Congress got mad at lenders for giving loans to more people.
A few years ago, it was very easy to get a loan. You could be out driving around when you’d find yourself needing to use the bathroom. So you’d pull up to a random business which happened to be a mortgage company, and you’d ask to use the rest room, and they’d say, "sure" and you’d strike up a conversation with the employee in the stall next to you, and by the time you flushed, you’d have a 30 year mortgage at 6.25 percent with 1 point origination fee.
Needless to say, some companies weren’t real picky about the credit checks either:
MORTGAGE APPLICANT: "Hi. I don’t have a job and I’m not looking for one. Besides massive debt, I have a serious heroin problem and I declared bankruptcy 12 minutes ago."
LOAN OFFICER: "Here! Take all this money. Please!"
But now it’s not so easy. You have to at least THINK about getting a job. That’s because of the "credit crunch," which is not to be confused with Captain Crunch. And why is there a "credit crunch" you ask? Because, of all the foreclosures. Guess how many folks are getting delinquent. One out of three homeowners? One out of two?
According to RealtyTrac.com, last month, one out 501 homeowners received a foreclosure filing. Do you realize what that means? It means you have a better chance of getting assaulted by a sea otter. But here in the newspaper business, we can’t run headlines that read,
SHOCKING NEW REPORT: 500 Out Of 501 Homeowners Pay On Time
So instead, we focus on the one person defaulting, and about how after the mean old bank is done with them, the poor family is going to have to (amongst other things), get rid of their satellite dish, which will leave them with only expanded cable, (as if THAT’S humane). Plus, the bank will probably take away other assets, including little Tiffany’s kitten and put her up for auction. ("Next up is this cute kitty named ‘Muffin.’ Who will give me 20 for her?...20..20...25..I see a 30...30....35...")
Not that I’m making light of foreclosures. As a kid growing up in Grand Junction during the 1980's, many of my neighbors lost their houses.
For example: We had some neighbors across the street who were very odd. I don’t think the husband owned a shirt. He’d ignore yard work and scratch himself in inappropriate places while carrying a beer around with him all day. It was like looking at a future version of me. His wife yelled at him a lot, too, which is maybe why he always had a beer.
Anyway, like I said, they were kind of strange. Then one day they got foreclosed upon and had to move. And I’ve noticed that when people get evicted, they don’t exactly tidy up the place and leave it sparkling clean for the new occupants. They tend to be mad at the bank, and want revenge. And boy, did my neighbor sure show them.
He not only took the appliances with him when he moved, he (true story), even took the light bulbs. This, I’m sure, was devastating to the company that held the mortgage:
Mortgage headquarters in New York.
ASSISTANT: "Sir!"
CEO: "What’s the emergency?"
ASSISTANT: "It’s the Johnson family in Western Colorado. When they moved out, they took all the light bulbs!"
CEO "What?! No! Those are 49 cents each. How am I supposed to explain that to the board of directors?"
So, hopefully, we’ll all get through this huge crisis. Because it can happen to anyone. It can happen to me. I could get foreclosed upon.
If so, those jerks aren’t getting my light bulbs.
Steve Beauregard can be reached at beauregardsteve@hotmail.com.
