Seeking: Owners of ARM Mortgages
Quick note to readers — I’m doing some research and would like to hear from people who bought adjustable rate mortgages in 2004-2005. If you have a horror story to tell there, please write to the press inquiries email posted at the side of this page.
Also, I’m trying to learn more about the Fed and the Greenspan era in general, so if anyone out there has ever met Greenspan, or had to deal with him in any way, I’d like to hear from you. Or if you worked in finance and have a story to tell about “Fed watching,” i.e. workplace reactions to Fed moves (for instance, I talked to one person who recalled that co-workers semi-seriously used to try to predict rate changes by watching to see which direction Paul Volcker blew his cigar smoke), I’m interested in that too. Apologize for the APB — will get back to actually posting soon.
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Speaking of Fed Watch – Remember how CNBC used to chase Greenspan around to see how full his briefcase looked as he would go to Fed meetings? Thick briefcase meant he would lower rates, thin briefcase said he’s leave them alone. Or vice-versa. Every time he’d use a word with more than a couple syllables there had to be some coded meaning to it, so speculation would begin among the “analysts.”
I usually don’t wish bad things to happen to people…but in this case, I hope someone goes ape shit with a crowbar on this thing.
[...] This post was mentioned on Twitter by True/Slant, MortgageCroc and Tweets Tube, Cari Sweet-Kostoplis. Cari Sweet-Kostoplis said: Seeking: Owners of ARM Mortgages – Matt Taibbi – Taibblog – True/Slant http://bit.ly/6ABuJG [...]
BOA has just frozen all lines of credit attached to a home. Merry Christmas from the Skank of America Actually skanks, or is it skinks?, are nice little creatures. I suspect a fair number of smaller businesses use this line of credit as an adjunct. I was considering using it it to bridge an IRA payment. Of course the cutoff was done with no advance notice. Unlike the banks that get the other skanks, the ones in congress, to give them a lead time to change practices. The peasants can’t be trusted with prior knowledge.
“Protection of the consumer against “dishonest and unscrupulous business practices” has become a cardinal ingredient of welfare statism. Left to their own devices, it is alleged, businessmen would attempt to sell unsafe food and drugs , fraudulent securities, and shoddy buildings. Thus, it is argued, the Pure Food and Drug Administration, the Securities and Exchange Commission, and the numerous building regulatory agencies are indispensable if the consumer is to be protected from the “greed” of the businessman.
But, it is precisely the “greed” of the businessman or, more appropriately, his profit-seeking, which is the unecxelled protector of the consumer.” —Alan Greenspan from “The Objectivist Newsletter”, August 1963 also published in Ayn Rand’s book “Capitalism: The Unknown Ideal”
The article goes on to say that”…it is in the self-interest of every businessman to have a reputation of honest dealings and a quality product”
So Alan Greenspan and Ayn Rand have made the false assumption that all people are driven by good and honest principles or at least that the strength of the honest will drive out the dishonest…My guess is that neither did very well in history back in school.
In any system with the ability to generate wealth or an abundance of anything in demand it is imperative that a system be in place to dissuade, halt and root out fraud, greed and impropriety. The lack of this type of structure led to the financial mess we have now; it is why fraud runs rampant through the insurance industry (yet we complain that our rates are too high!) and our legal system is saturated with completely (and more importantly) partially bogus lawsuits.
Our consumer protection, insurance and legal systems are improperly based on an honest person; but water runs downhill and humans will always look for the easiest and fastest way to abundance, be it money, land or power.
Here’s someone that might be good to contact: Shiv Newaldass of Manna, Inc. It’s an organization in DC that helps get homes for people living below the poverty line. Last March I saw him give a presentation and he talked about how ARM mortgages were about to go up in flames en masse, and he seemed like he knew what he was talking about and he probably deals with this problem a lot now (or will in the near future). His email is snewaldass at mannadc dot org and mine is rossmlevin at gmail dot com.
We got an ARM in the fall of 2004. It was our first house. I had a terrible credit history that I had just managed to drag back into the 700 range by that time, the wife had a decent average credit score. House prices were headed into the sky and the ARM deal was pretty much the only way we could find to get into one.
The agent that sold us the mortgage was a hot looking middle aged woman decked out in expensive clothes and jewelry, fancy office, fancy car, etc. During our meeting my wife got up to excuse herself and the agent very quickly assured me that my seven year old bankruptcy, an old judgement, a slow student loan and all that would be studiously ignored and no problem on the application, like it was our little secret. We told her what we felt was the very most we could make for a monthly payment, and wouldn’t you know, she came up with an ARM that was just a few dollars more than the monthly limit. It was a terrible deal. To make the monthly we had no escrots, so at the end of the year I had to scrounge up thousands of dollars for tax and insurance.
Within weeks our loan was sold to a shoddy company that went out of business within a year. We managed to get a better loan at a secure rate a year after that. One of the first places I called when we were shopping around was our original agent, but the receptionist sternly stated that “she is no longer with the company” and when I asked were she was “she is no longer in the loan business”.
Marcy Kaptur recently spoke at the University of Toledo law school (where I attend) and had a funny story about meeting him in which he stared her down across his incredibly long table and was more interested in her as a curiosity than anything she had to say.
Check out today’s On Point from NPR: (http://www.onpointradio.org/2009/12/how-to-stem-the-foreclosure-tide). The audio will be available at 3 pm.
I also recently lost a student to financial issues. Her dad owns his own business and there were 2 serious illnesses in the family; one included a hospital stay. Even though it’s the end of the semester and the tuition and fees have already been payed for this fall, my student has withdrawn from classes and is seeking a job to help her family with expenses. She isn’t opening up a whole lot about the situation, but it’s clear if the family wants to keep the small business running and stay above water financially (including the house), everyone will need to pitch in.
I realize that this is anecdotal and it’s highly unlikely that the family will contact you, but I do think it is an all too typical scenario in this economic climate.