September 24, 2008
Dear Everyone:
21 years ago, I scraped together enough money to
put a down payment on a
condo in
Almost eleven years ago, the neighborhood was “in
transition” and it was time to sell the condo and use the equity to
place a larger down payment on the
townhouse in
San Ramon.
At that time I used a lending institution recommended by my
realtor. The loan officer
explained that the lender would hold the
mortgage for “about a year” to
confirm that I was a stable entity, then sell it to someone else.
(He also told me that my
credit rating was “excellent” and told
the person he was arranging the financing with over the phone that I was
both a “cookie cutter” AND a “cream puff.”)
In fact, it was less than six months before that
lender sold my mortgage to another company.
And they sold it to another company.
Each time, I would get a form letter in the mail requiring proof
that my Homeowners Association had insurance.
And I would get a different payment coupon book and address to
send the checks to.
Four years ago the conditions were optimum to
refinance at a lower interest rate and this time, because it was
conveniently in the same office complex, I arranged for financing
through my credit union. The
lower rate was guaranteed for five years, which means my mortgage won’t
go up until next summer.
And the credit union does not sell its mortgages to
other companies.
In the meantime, all those lending institutions
were making big bucks by packaging and selling combinations of loans.
There were incentives to make more loans.
To people who might not necessarily be in a position to pay off
those loans.
And then there were the NINJA loans.
(No Income, No Job or Assets.)
And now all those unhappy birds have
come home to roost.
And the happy lenders are not happy anymore.
And the
companies that bought all those packages are not happy
and want the taxpayers to save their bacon.
And the same people who told us five years ago,
“This is a crisis! We have
to invade
I’m glad I didn’t try to buy a house ten times more
expensive than I could afford.
I’m glad that, thanks to my share of Mother’s estate, I have a
full year’s worth of mortgage payments in my savings account.
(I’m glad I have a healthy savings account.)
I’m glad that I’ve been able to overpay the mortgage each month,
thus reducing the overall amount by $22,000 over the last ten years.
I’m not so glad that my
401(k) has dropped $44,000
since the end of last month; but hey, that’s “paper” money.
It will have plenty of time to grow back before I start looking
at retirement.
And I am starting to at least
think about retirement.
Whatever would I do with all that free time, besides read books, go to
movies and watch TV?
Love, as always,
Pete
| Previous | Next |