Have you ever noticed that sometimes it sucks to be right? In my last post about hunker downers I was concerned that I would be, but I didn't expect confirmation so quickly. The day after that posting, I was informed my father was losing his home and would be moving into my brother's house. The next day I learnt that my brothers in laws were losing their home and would also be moving in with them. The day after, another friend tells me how he was helping his dad move as he too lost his home. Seriously, you can't be serious! Thus I say again, it sucks to be right.
I'm the type of person who loves a good debate, and winning always adds to the fun, but here I must declare a no-joy win. This bothers me on a lot of levels as it goes against my loving to win mindset, but it is what it is. I'm wondering when lenders will start to see that the foreclosure over loan modification war is one they are losing? Each of these parties had stellar credit scores in the 750 or higher range, but the lenders could not see fit to look for alternatives such as loan modification to help these responsible people keep their homes. It's worse still that they will each likely take a 75-150 point hit on their credit scores, which will make getting into a new home that much harder, and the lenders will have to report growth in bad assets. I don't get it!
I don't get it as in each case this was a lose-lose outcome for all parties involved. Each of these individuals has had exemplary credit their entire lives, and due to circumstances beyond their control, now has only average credit. Each party took great pride in their homes and will see them go to the highest bidder in auction, with the lender getting 50% of the home's value from the auction proceeds resulting in lost revenue. Wouldn't it have just been easier and more economical to work with these people who've been great customers for years and come to new terms both sides could live with? Wouldn't it be better for the economy for three parties to keep their homes to inspire hope of economic recovery? Wouldn't it have been better for the lenders to build customer satisfaction and lower their volume of bad assets?
Honestly, I just don't get it. But then you never know, I may be next.
-Seriously
Monday, June 21, 2010
Monday, June 14, 2010
I'm Concerned For the Hunker Downers
I think you'll find over time that I'm generally a pretty optimistic person always looking to the bright side of things, but as I gain wisdom I also find myself being a realist as well. I keep seeing news about how the mortgage crisis is showing signs of improvement, but also see news such as "Employer health care costs to jump 9% in 2011". Thus meaning in the not so distant future, the cost I pay for medical insurance will go up, as well as my deductible which I've already seen climb from $10 to $25 in the last five years. Seriously, you can't be serious.
If it is true that in every cloud is a silver lining, we must also still account for the rest of the cloud which may not be quite as rosy. As I've followed the economy more closely in recent month than before, I keep hearing about two things that are critical to economic improvement, consumer spending, and the housing market. Always playing with what if's in my head (it's actually pretty noisy in there for most people's tastes I would think) I started to imagine what else may happen in the future that could upset the apple cart when it suddenly came to me, what about the hunker downers?
Let me explain who the hunker downers are to clarify the concept, and hang with me as I really have a point to my ramblings. I consider hunker downers to be those homeowners who are in general pretty responsible people, and always try to do the right things with the lives and finances. They save for a rainy day and with good reason, then one of them looses their job. So what does the hunker downer do? They tap their savings to supplement income. Now while unemployment rates seem to be improving, I don't think all the people who lost jobs have returned to employment yet. If they are lucky, they may have another breadwinner in the household to allow some financial coasting room, but let's face it, most dual incomes rely on dual incomes to get by.
Eventually, the inevitable hits and savings are nearly gone as the depressed hunker downer spend their day scouring through job ads and trying to separate the real opportunities from the opportunistic advertising posts for training or school (I'll talk about this another day). As the household has already been living on a lower income, you can bet they have stopped spending on anything but necessities, there goes their consumer spending. As the financial brick wall picks up momentum with the dwindling saving, they next start to look at how else they can save. They've spoken with their credit card holders who are working with them on a temporary program many are offering today for people in this situation to lower payments (kudos to those organizations who are really trying to help). Still, there's no consumer spending here.
Next they look at their mortgage. Depending on when they bought their home and their credit score, they could be in a mortgage with an interest rate of 7%-10% (not uncommon when the adjustable rates were dying), and God forbid they have an adjustable mortgage. Also, if the home was purchased in the last five years, they are probably upside down as well significantly decreasing or eliminating the likelihood of a loan modification. So they call up their lender and here's how the conversation could go:
Hunker downer: I'm sorry, but we have had a job loss lowering income for the past couple of years and have depleted our savings. In looking at my mortgage I see I'm paying 9% and would like to see if I could get a lower rate such as what is available for a new buyer maybe around 5%. As you can see from my payment history, I've always paid my bill on time, and with the lower interest on the loan I could afford to meet my obligation and keep my home.
Lender Employee Number 1: I'm really sorry to hear this, I see you have been a loyal and responsible customer. Let me transfer you to someone who can assist you with your problem.
Queue the music "The love boat...soon will be making another run...the love boat..."
Lender Employee Number 2: Hi, this is Employee Number 2, how can I help you today?
Hunker downer: Repeats everything explained to Lender Employee Number 2.
Lender Employee Number 2: I'm really sorry to hear this, I see you have been a loyal and responsible customer. Let me transfer you to someone who can assist you with your problem.
Repeat Lender Employee X sequence two more times with full explanation each time.
Queue the music "The love boat...soon will be making another run...the love boat..." yes, the same song is playing as before.
Lender Employee Number 5 (after full Hunker downer explanation): I'm really sorry to hear this, I see you have been a loyal and responsible customer, however we are not offering any loan modifications for existing customers, the low rates only apply to home buyers. Could you make the payment next payday?
Hunker downer: I can try, but I did explain I can't afford the house with the current interest rate, is there no way to negotiate a lower payment?
Lender Employee Number 5: I'm really sorry but we are not offering any loan modifications for existing customers at this time. Could you make the payment next payday?
I think you get the idea. My point is (yes, I have one), I think we will soon see the hunker downer facing foreclosures. They've tried to do everything right, we all probably know or perhaps are one, and from where I sit, I think these are our people as our economies mainstay. These are the middle class who will soon find themselves in foreclosure causing a ripple effect in consumer spending and foreclosure rates. Not to mention what will happen to their credit scores. These are average citizen trying their best to stay afloat and optimistic. I hope I'm wrong here and just spent some time cleaning out my mental attic, but I'm concerned. Concerned for the hunker downers, concerned for the economy, and concerned that corporations have learned nothing from recent history including the hunker downer being there for them when they took the government bailout money.
To you lenders out there, get with the program and help these creditworthy hunker downers keep their homes. To you hunker downers, hang in there, you're not alone. To those of you who know a hunker downer, give them a hug. Things will get better for you Mr. and Ms. Hunker Downer, you're always very resilient, and karma will set things straight down the road. If nothing else, these events teach us what's really important in our lives, the people we care for and those who care for us. A home is after all what you make of it.
-Seriously
If it is true that in every cloud is a silver lining, we must also still account for the rest of the cloud which may not be quite as rosy. As I've followed the economy more closely in recent month than before, I keep hearing about two things that are critical to economic improvement, consumer spending, and the housing market. Always playing with what if's in my head (it's actually pretty noisy in there for most people's tastes I would think) I started to imagine what else may happen in the future that could upset the apple cart when it suddenly came to me, what about the hunker downers?
Let me explain who the hunker downers are to clarify the concept, and hang with me as I really have a point to my ramblings. I consider hunker downers to be those homeowners who are in general pretty responsible people, and always try to do the right things with the lives and finances. They save for a rainy day and with good reason, then one of them looses their job. So what does the hunker downer do? They tap their savings to supplement income. Now while unemployment rates seem to be improving, I don't think all the people who lost jobs have returned to employment yet. If they are lucky, they may have another breadwinner in the household to allow some financial coasting room, but let's face it, most dual incomes rely on dual incomes to get by.
Eventually, the inevitable hits and savings are nearly gone as the depressed hunker downer spend their day scouring through job ads and trying to separate the real opportunities from the opportunistic advertising posts for training or school (I'll talk about this another day). As the household has already been living on a lower income, you can bet they have stopped spending on anything but necessities, there goes their consumer spending. As the financial brick wall picks up momentum with the dwindling saving, they next start to look at how else they can save. They've spoken with their credit card holders who are working with them on a temporary program many are offering today for people in this situation to lower payments (kudos to those organizations who are really trying to help). Still, there's no consumer spending here.
Next they look at their mortgage. Depending on when they bought their home and their credit score, they could be in a mortgage with an interest rate of 7%-10% (not uncommon when the adjustable rates were dying), and God forbid they have an adjustable mortgage. Also, if the home was purchased in the last five years, they are probably upside down as well significantly decreasing or eliminating the likelihood of a loan modification. So they call up their lender and here's how the conversation could go:
Hunker downer: I'm sorry, but we have had a job loss lowering income for the past couple of years and have depleted our savings. In looking at my mortgage I see I'm paying 9% and would like to see if I could get a lower rate such as what is available for a new buyer maybe around 5%. As you can see from my payment history, I've always paid my bill on time, and with the lower interest on the loan I could afford to meet my obligation and keep my home.
Lender Employee Number 1: I'm really sorry to hear this, I see you have been a loyal and responsible customer. Let me transfer you to someone who can assist you with your problem.
Queue the music "The love boat...soon will be making another run...the love boat..."
Lender Employee Number 2: Hi, this is Employee Number 2, how can I help you today?
Hunker downer: Repeats everything explained to Lender Employee Number 2.
Lender Employee Number 2: I'm really sorry to hear this, I see you have been a loyal and responsible customer. Let me transfer you to someone who can assist you with your problem.
Repeat Lender Employee X sequence two more times with full explanation each time.
Queue the music "The love boat...soon will be making another run...the love boat..." yes, the same song is playing as before.
Lender Employee Number 5 (after full Hunker downer explanation): I'm really sorry to hear this, I see you have been a loyal and responsible customer, however we are not offering any loan modifications for existing customers, the low rates only apply to home buyers. Could you make the payment next payday?
Hunker downer: I can try, but I did explain I can't afford the house with the current interest rate, is there no way to negotiate a lower payment?
Lender Employee Number 5: I'm really sorry but we are not offering any loan modifications for existing customers at this time. Could you make the payment next payday?
I think you get the idea. My point is (yes, I have one), I think we will soon see the hunker downer facing foreclosures. They've tried to do everything right, we all probably know or perhaps are one, and from where I sit, I think these are our people as our economies mainstay. These are the middle class who will soon find themselves in foreclosure causing a ripple effect in consumer spending and foreclosure rates. Not to mention what will happen to their credit scores. These are average citizen trying their best to stay afloat and optimistic. I hope I'm wrong here and just spent some time cleaning out my mental attic, but I'm concerned. Concerned for the hunker downers, concerned for the economy, and concerned that corporations have learned nothing from recent history including the hunker downer being there for them when they took the government bailout money.
To you lenders out there, get with the program and help these creditworthy hunker downers keep their homes. To you hunker downers, hang in there, you're not alone. To those of you who know a hunker downer, give them a hug. Things will get better for you Mr. and Ms. Hunker Downer, you're always very resilient, and karma will set things straight down the road. If nothing else, these events teach us what's really important in our lives, the people we care for and those who care for us. A home is after all what you make of it.
-Seriously
Sunday, June 13, 2010
Be a Pup
These days, it’s tough to find things to be excited about. The economy is still in ruins in spite of what the government and corporations claim in the news. People with good credit are still stuck in high interest mortgages because their homes are upside down, and nobody’s looking at that. BP’s belching oil into the Gulf of Mexico like it doesn’t matter. You can’t go to the grocery store to buy dinner and a couple of miscellaneous items without spending over $70, and the weather everywhere seems to be carrying out a personal vendetta against the land based species of the planet. Thus we find ourselves in the malleable state the government and the powerful want us to be. Listening to the news and buying into it because we just don’t seem willing to question what we’re hearing. We’re victims right? Being beaten by those in power and there’s nothing we can do. You can’t be serious!
We head downstairs and follow our rituals; I let her out (her tail high in the air), then go brush my teeth. When I’m done I go check on her through the window and see her playing with a leaf. She paws at it, it moves, she runs around in little circles. Next she picks up the leaf and runs around with it for a few, drops it when she sees one of her many toys distributed throughout the yard and follows the same process with the toy the leaf enjoyed.
You can’t be serious, and that’s my point. I stopped for a moment and looked at how she greeted the day and how I greeted the day:
Me: I’m freezing. – negative
Her: It’s morning, yippee! – positive
Me: What a way to wake up? – negative
Her: Is that my tail? – positive
Me: I have to let Puppy out – neutral
Her: Is that sunshine I see? – positive
Me: My mouth feels like an army has marched through barefoot – negative
Her: What’s that laying on the deck? – positive
Me: OK, my mouth is now clean, I feel better. – positive (hey, my first one of the day)
Her: Whoohoo – positive
Me: Caffeine, need it now – neutral (this could have gone either way)
Her: The sun feels great!! – positive
Me: I have my caffeine. – positive (I’m on a roll)
Her: What’s that over there (dropping leaf) – Positive
Me: ….. – neutral
Her: Whoohoo – positive
Let’s check the score to see who’s winning so far today since it’s only been 15 minute. Positives are 1, neutrals are 0, and negatives are -1:
Positive Neutral Negative Score
Seriously 3 3 zeros -2 1
Puppy 8 0 0 8
Looks like I’m losing by a sound margin, what’s the deal? I’m supposed to be the party with the higher evolved intelligence, but this puppy is giving me a sound thrashing. I’m the one with the years of experience, but still I’m losing the game, have I learned nothing? Seriously, you seem to be taking the world to seriously.
What does it all mean? It means we should learn from puppies how to approach life. Wake in the morning and force yourself to think yippee! Look outside and see the sun and think what a beautiful day. Seriously don’t take things so seriously and allow yourself to enjoy the day and life as a whole. While we may have more responsibilities than Puppy, we also control how we react to the input our senses receive. Don’t let the powerful rule how you live your life, and seize each day. Be a puppy for a while and live, aim your tail to the sky. You’ll find this an easy habit to form and the basis of a more positive life. Be happy, be a pup, and try not to be so serious.
- Seriously
Saturday, June 12, 2010
Day 1
So here it is, day 1, as I embark on the road of blogging, I reflect on how the world is changing around us and the who much technology, the economy, and the open elements of blogging are changing the landscape of communications as we know it. I have so many area's to discuss at this point, it's difficult for me to narrow down where to start, so over the coming days I'll collect my thoughts and see what I can do to entice the blogging community with my own unique if not slightly warped view of the world.
Tally Ho!
Tally Ho!
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