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I read a lot of economics blogs and columns, in part because I am a masochist but I also really like to see what economists are saying or not saying about housing. At Marginal Revolution today there is a discussion about theories behind the involvement of Fannie and Freddie in the mortgage market. The post states that the old consensus was that the GSE's were in place to make housing more affordable. EPIC FAIL ALERT. The notion that Fannie Mae, Freddie Mac, and the Federal Reserve have ever made housing more affordable is ludicrous and comical. If you define affordable as low interest rates then you can definitely argue that they succeeded but you are ignoring the most important factor in whether housing is affordable: your income.
We used to consider housing affordable if you spent roughly 25 percent of your gross monthly income on housing. During the peak of the housing boom, Fannie Mae was routinely backing loans at 65 percent of people's gross monthly incomes. If you expand your definition of affordable to mean, "at the cusp of bankrupting you" then well done, Fannie. You made housing more dangerously affordable than ever.
What we have in many parts of this country is a mismatch in the supply of housing with what consumers can actually afford, you know, given their crappy job prospects. The government inflated housing bubble changed what we view as affordable and made a 3 bedroom house in the suburbs with granite countertops seem like a public good. It's not. We have a vast amount of homes that are affordable to a small amount of people. This cannot be fixed by government intervention, it will require rising incomes and economic growth which will increase demand for what is currently, unaffordable housing.
HUD projections show that in my region, housing demand will be for homes in the $125,000 to $200,000 price range. This is affordable given our median income levels and these are the homes that are actually selling right now. What we have is a plethora of homes priced from $250,000 to $350,000 that even if you have 20 percent to put down (a modern miracle), once you factor in taxes and insurance you would need income in excess of $72,000 a year to afford. This is assuming that you don't have any other debt. If you have a car payment, student loan, and an average credit card balance this ups your income requirement to $100,000 a year to afford the payment. Better get on the The Ladders website.
On the other end of affordability we have many families that are working class, what is quickly becoming a class of the working poor. They may have combined incomes of $45,000 per year and they have consumer debt and spend virtually all of their incomes monthly. For this family, an affordable house carries a mortgage payment of $1125 including taxes and insurance. For this family, a home that costs $150,000 is affordable. Unfortunately, many of these families are living in $250,000 houses because they qualified for twice what they could actually afford with the help of Fannie, Freddie, and the Federal Reserve.
We have a number of housing problems which are exacerbated by our poor economy. People underwater on their mortgages are trapped unless they say screw it and walk away and why wouldn't they; what incentive do they have to stay? Do you really think people struggling to stay afloat are going to put the virtue of their word over a rational economic decision? Didn't think so.
A bigger problem exists for unemployed homeowners. Because economies tend to have local and regional agglomeration characteristics in particular industries, you end up with a lot of unemployed people in one area with similar skill sets. If these unemployed people were mobile, as in able to sell their house and not take a complete financial schlacking, they could move to where their skills might be employable. Unfortunately, we have a labor force that is very immobile right now which makes unemployment even worse. Being a renter right now has tremendous advantages, particularly if you can move to take advantage of opportunity.
Perhaps, the Banks should become landlords and turn short sales and foreclosures into rentals. This would slow down the decline in housing values because the properties wouldn't go to market and then drag down appraisals for the next two years for other homes in the area. Bankers would make great Slumlords, they wouldn't even require training.
Tuesday, August 24, 2010
Housing Will Save Us!!! Oh Wait, Nevermind.
The Geniuses of the Federal Reserve (wouldn't that make a totally un-sexy calendar) have declared that a double dip recession is becoming more likely following a weak housing report and high unemployment. Can you remember the last time that economic news didn't include the phrases "weak housing" and "high unemployment"? Why is it then that every news release about the economy seems to be written with an underlying tone of surprise like economists and media types are really saying, "I can't believe that housing is still weak and people are still unemployed, the economy seems so robust."
The coverage of Charles Evans, Chicago Federal Reserve Bank President, can be found here. Here is a quote from the article:
"Many economists worry that, without housing as an engine of growth, the economy could take much longer than usual to recover."
I have to call Bullshit on this statement. Housing as measured by fixed residential investment has contributed on average 4.1 percent to GDP since 1929. It is actually a very small part of our economy when compared to consumer spending, government spending, and private investment. It is not an engine of economic growth, it is a symptom of economic growth. Economists should know better. When consumers feel good about their job security and have rising wages, they invest in housing. Therefore, housing sector growth lags economic growth not the other way around. When did we quit recognizing this and start treating housing as a bigger component of our economy than it actually is?
If you don't want to take my word for it because I blog under the name Turdy and swear like a sailor, take a look at this graph I created tracking the private sectors housing investment over time as a percentage of GDP.
What should jump out at you from this graph is that housing rebounds after the trough of the recession historically. The fact that intelligent economists at the Federal Reserve and serving as Obama's Economic Advisors are arguing that housing can and should lead us out of the recession are bullshitting you. It is distracting you from what is really wrong with our economy; businesses have so little faith in our economy and face so much uncertainty about government policy that they are paralyzed. As long as this is the case, there will not be economic growth.
It must make you wonder how a sector that directly contributes such a small share of GDP could facilitate the destruction of the larger economy. The answer is that the housing bubble fueled indirect contributions to GDP through lax lending standards and consumers use of their homes as ATMs. Housing didn't gain that much in share of GDP during the bubble, it reached a peak of 6.1 percent in 2005 which was a 50 year high but still only 2 percent over its long term average. During this same period however, consumer spending on goods and services grew because people felt wealthier which led to increases in goods manufacturing and spilled over to other sectors of the economy. When the bust occurred, the reversal of the positive spillovers was catastrophic for manufacturing, retail, and other major sectors of the economy.
Economic recovery will rely on the consumer in this recession as it has in EVERY RECESSION IN OUR HISTORY. Before people buy houses, they need to be able to pay for necessities like transportation, food, and child care. When they feel secure in their jobs and have wage growth, they will start investing in more long term investments like housing but we are nowhere near that point. It is a colossal waste of time for everyone to worry about propping up the housing market and suggesting that it will grow our economy. We have already paid the price for the fallacy of this argument, why must we continue on the same path?
The coverage of Charles Evans, Chicago Federal Reserve Bank President, can be found here. Here is a quote from the article:
"Many economists worry that, without housing as an engine of growth, the economy could take much longer than usual to recover."
I have to call Bullshit on this statement. Housing as measured by fixed residential investment has contributed on average 4.1 percent to GDP since 1929. It is actually a very small part of our economy when compared to consumer spending, government spending, and private investment. It is not an engine of economic growth, it is a symptom of economic growth. Economists should know better. When consumers feel good about their job security and have rising wages, they invest in housing. Therefore, housing sector growth lags economic growth not the other way around. When did we quit recognizing this and start treating housing as a bigger component of our economy than it actually is?
If you don't want to take my word for it because I blog under the name Turdy and swear like a sailor, take a look at this graph I created tracking the private sectors housing investment over time as a percentage of GDP.
 |
| Data from Bureau of Economic Analysis, Graph and Data Analysis by Turdy, Design based on Calculated Risk Blog |
It must make you wonder how a sector that directly contributes such a small share of GDP could facilitate the destruction of the larger economy. The answer is that the housing bubble fueled indirect contributions to GDP through lax lending standards and consumers use of their homes as ATMs. Housing didn't gain that much in share of GDP during the bubble, it reached a peak of 6.1 percent in 2005 which was a 50 year high but still only 2 percent over its long term average. During this same period however, consumer spending on goods and services grew because people felt wealthier which led to increases in goods manufacturing and spilled over to other sectors of the economy. When the bust occurred, the reversal of the positive spillovers was catastrophic for manufacturing, retail, and other major sectors of the economy.
Economic recovery will rely on the consumer in this recession as it has in EVERY RECESSION IN OUR HISTORY. Before people buy houses, they need to be able to pay for necessities like transportation, food, and child care. When they feel secure in their jobs and have wage growth, they will start investing in more long term investments like housing but we are nowhere near that point. It is a colossal waste of time for everyone to worry about propping up the housing market and suggesting that it will grow our economy. We have already paid the price for the fallacy of this argument, why must we continue on the same path?
Tuesday, August 17, 2010
Just when you thought it couldn't get worse....
This article in the WSJ is today's reason that I am fast tracking my plans to become a pirate. Here is the opening sentence:
"The U.S. government will likely continue to play a role in guaranteeing mortgages, but policy makers must figure out how to design a system that doesn't lead to a rerun of the collapse of mortgage-finance giants Fannie Mae and Freddie Mac, Treasury Secretary Timothy Geithner told attendees at a housing summit convened on Tuesday."
Arggh. My immediate irritation is with the word "design". The government couldn't design an exit strategy from a wet paper sack yet they can design a system to prevent financial ruin? No, they cant and the fallacy that you can design a system to control a spontaneous order like our market economy is mortifying and dangerous. I was even more disturbed to find out that two economists I greatly respect seem to be throwing support to Geithner on their blog.
The argument pervasive at the moment is that without government backing there will be no private capital in the mortgage markets and this will lead to a further decline in housing prices, more underwater homeowners, and more stress to the economy. Currently, the government is involved in backing 90 percent of mortgages whether implicitly or explicitly. As far as I can tell the idea is to wean the government out of its involvement in the business of housing by temporarily increasing its role, an idea that is so profoundly crazy I cannot believe it is being taken seriously by smart people.
I agree with the ultimate goal that the government (read taxpayers) will not be intimately involved in every loan made for housing. The problem lies in the fact that once the government is involved, it changes the expectations of the private players and becomes the new rule of the game. The incentives will not be there for the private sector to take a role because the expectation will be that the government will continue to prop up the market. Private capital will flow into areas other than mortgages and the taxpayer will end up with the flaming crap bag on their steps. Temporary government intervention typically turns into permanent government intervention because it distorts market signals and diverts investment to alternative sectors.
I don't know about you but if I hear the phrase, "Mortgage Rates are at historic lows," one more time I am going to exercise my second amendment rights and blow up my television. Mortgage rates have been too low for too long, another part of the problem. The Treasury officials are arguing that without a government guarantee on mortgages, mortgage rates will soar. Fantastic! Let them soar, they have been distorting the real cost of lending and altering borrowers decision making calculus for too long. Interest rates are prices and as such, they should reflect the risk associated with lending and the cost of doing business. Let interest rates rise and more private investors will enter the mortgage markets. Keep interest rates below the actual market rate and the government will be the only entity dumb enough to jump in.
I am so tired of government stimulus that I think I need a Valium to cope with my over-stimulation.
"The U.S. government will likely continue to play a role in guaranteeing mortgages, but policy makers must figure out how to design a system that doesn't lead to a rerun of the collapse of mortgage-finance giants Fannie Mae and Freddie Mac, Treasury Secretary Timothy Geithner told attendees at a housing summit convened on Tuesday."
Arggh. My immediate irritation is with the word "design". The government couldn't design an exit strategy from a wet paper sack yet they can design a system to prevent financial ruin? No, they cant and the fallacy that you can design a system to control a spontaneous order like our market economy is mortifying and dangerous. I was even more disturbed to find out that two economists I greatly respect seem to be throwing support to Geithner on their blog.
The argument pervasive at the moment is that without government backing there will be no private capital in the mortgage markets and this will lead to a further decline in housing prices, more underwater homeowners, and more stress to the economy. Currently, the government is involved in backing 90 percent of mortgages whether implicitly or explicitly. As far as I can tell the idea is to wean the government out of its involvement in the business of housing by temporarily increasing its role, an idea that is so profoundly crazy I cannot believe it is being taken seriously by smart people.
I agree with the ultimate goal that the government (read taxpayers) will not be intimately involved in every loan made for housing. The problem lies in the fact that once the government is involved, it changes the expectations of the private players and becomes the new rule of the game. The incentives will not be there for the private sector to take a role because the expectation will be that the government will continue to prop up the market. Private capital will flow into areas other than mortgages and the taxpayer will end up with the flaming crap bag on their steps. Temporary government intervention typically turns into permanent government intervention because it distorts market signals and diverts investment to alternative sectors.
I don't know about you but if I hear the phrase, "Mortgage Rates are at historic lows," one more time I am going to exercise my second amendment rights and blow up my television. Mortgage rates have been too low for too long, another part of the problem. The Treasury officials are arguing that without a government guarantee on mortgages, mortgage rates will soar. Fantastic! Let them soar, they have been distorting the real cost of lending and altering borrowers decision making calculus for too long. Interest rates are prices and as such, they should reflect the risk associated with lending and the cost of doing business. Let interest rates rise and more private investors will enter the mortgage markets. Keep interest rates below the actual market rate and the government will be the only entity dumb enough to jump in.
I am so tired of government stimulus that I think I need a Valium to cope with my over-stimulation.
Tuesday, August 10, 2010
Welcome to the Scam
It has taken me a few days to process the op-ed written by Treasury Secretary, Timothy Geithner. The title of his piece, "Welcome to the Recovery", is so ironic it took me two days to quit laughing. If you haven't read this epic work of bullshit, you can find it here.
This is economic recovery? Surely, you jest. If you aren't disappointed by this "recovery" than you have incredibly low standards and should immediately stop reading this blog. You would be just as happy reading Brittany Spears blogging about the housing crisis.
The disappointment that this is what smart people call economic recovery is akin to finding out that heaven is just a really huge Department of Transportation office and that you will spend eternity waiting in line to renew your heaven license, only to find out you didn't fill out the paperwork correctly and must take a new number. When did we decide to accept such low standards for economic recovery?
I no longer want to be an economist because it is mortifying that myriad intelligent economists are spewing the propaganda and bullshit to convince the American public that things are getting better. The worst part is that these economists know better and if they don't, they should. Every piece of economic data that is released is discarded if it is negative and explained away. If there is the slightest bit of implied positiveness in a number, it is heralded as a sure sign of recovery. The problem with this is that most of the data is suspect, and the analysis of the data is even worse.
I recommend that you immediately take everything Bernanke and Geithner say and infer the opposite for at least the next 18 months or so. If they say the auto industry is booming, I want you to hear, "The auto industry isn't declining at the frightening speed it was thanks to the infusion of your future into this dinosaur industry." If they tell you the private sector is investing, you should hear, "The private sector is investing in things that don't really create jobs and the increase looks great because it is a positive number, but investment plummeted so much that it had nowhere to go but up." When Geithner says businesses have repaired their balance sheets, you should hear, "Businesses have made use of many loosey goosey accounting standards and in addition, by laying off a huge part of their labor force they can direct the money they were paying in wages to paying off debt that has been called due by struggling banks." This is just a brief sampling of how to take bullshit and turn it into truth, I am working on a patent for a portable economic bullshit translator that resembles a Kindle. Stay tuned for that.
The hard core truth is that the financial crisis is both a symptom of a false economy created with government incentives and the cause of our new economy. Without the government infused housing bubble, perhaps we might have recognized back in 2003 that the strength of our economy was an illusion. Instead, we rode the false economic growth like a reckless drunk on a mechanical bull.
A gentleman asked me the other day if the current economy was Keynesian. I was baffled but wrote his comment off to someone trying to impress me with their vast economic knowledge earned by listening to Rush Limbaugh. Maybe I wrote him off to soon, perhaps, he was implying that the cause of the crisis was Keynesian economics and that is highly likely. Regardless, modern economics cannot describe what our economy is and therefore it cannot purport to know how to fix it. Keynesian policies will only make the economy worse because the underlying assumptions are not valid. We have undergone structural changes in our economy that have altered the framework of neo-classical economics, so much so that if I were teaching economics right now I would have my students tear up their textbooks. The government intervention in the economy and the perverse policies of the Federal Reserve have irrevocably altered our economy and now our economy has new DNA. The basic tenets of economics are the only economic principles that are applicable now and my mantra, "Incentives Matter", is the key to understanding the crisis and eventually recovering.
I have blogged before that I think there are only two possibilities about economics right now:
I would bet that if Geithner and Bernanke went to happy hour and were drunk enough to be very honest about the economy they would say, "We are royally fucked."
This is economic recovery? Surely, you jest. If you aren't disappointed by this "recovery" than you have incredibly low standards and should immediately stop reading this blog. You would be just as happy reading Brittany Spears blogging about the housing crisis.
The disappointment that this is what smart people call economic recovery is akin to finding out that heaven is just a really huge Department of Transportation office and that you will spend eternity waiting in line to renew your heaven license, only to find out you didn't fill out the paperwork correctly and must take a new number. When did we decide to accept such low standards for economic recovery?
I no longer want to be an economist because it is mortifying that myriad intelligent economists are spewing the propaganda and bullshit to convince the American public that things are getting better. The worst part is that these economists know better and if they don't, they should. Every piece of economic data that is released is discarded if it is negative and explained away. If there is the slightest bit of implied positiveness in a number, it is heralded as a sure sign of recovery. The problem with this is that most of the data is suspect, and the analysis of the data is even worse.
I recommend that you immediately take everything Bernanke and Geithner say and infer the opposite for at least the next 18 months or so. If they say the auto industry is booming, I want you to hear, "The auto industry isn't declining at the frightening speed it was thanks to the infusion of your future into this dinosaur industry." If they tell you the private sector is investing, you should hear, "The private sector is investing in things that don't really create jobs and the increase looks great because it is a positive number, but investment plummeted so much that it had nowhere to go but up." When Geithner says businesses have repaired their balance sheets, you should hear, "Businesses have made use of many loosey goosey accounting standards and in addition, by laying off a huge part of their labor force they can direct the money they were paying in wages to paying off debt that has been called due by struggling banks." This is just a brief sampling of how to take bullshit and turn it into truth, I am working on a patent for a portable economic bullshit translator that resembles a Kindle. Stay tuned for that.
The hard core truth is that the financial crisis is both a symptom of a false economy created with government incentives and the cause of our new economy. Without the government infused housing bubble, perhaps we might have recognized back in 2003 that the strength of our economy was an illusion. Instead, we rode the false economic growth like a reckless drunk on a mechanical bull.
A gentleman asked me the other day if the current economy was Keynesian. I was baffled but wrote his comment off to someone trying to impress me with their vast economic knowledge earned by listening to Rush Limbaugh. Maybe I wrote him off to soon, perhaps, he was implying that the cause of the crisis was Keynesian economics and that is highly likely. Regardless, modern economics cannot describe what our economy is and therefore it cannot purport to know how to fix it. Keynesian policies will only make the economy worse because the underlying assumptions are not valid. We have undergone structural changes in our economy that have altered the framework of neo-classical economics, so much so that if I were teaching economics right now I would have my students tear up their textbooks. The government intervention in the economy and the perverse policies of the Federal Reserve have irrevocably altered our economy and now our economy has new DNA. The basic tenets of economics are the only economic principles that are applicable now and my mantra, "Incentives Matter", is the key to understanding the crisis and eventually recovering.
I have blogged before that I think there are only two possibilities about economics right now:
- Our models were always wrong and we just got lucky because the spontaneous order of the economy was strong enough to counteract our stupidity. In this theory, the economy used to have a very strong immunity to the falsehoods of economists.
- Our models were once applicable, but we have so screwed up the natural economic order that we have to start over or at least go back to Adam Smith.
I would bet that if Geithner and Bernanke went to happy hour and were drunk enough to be very honest about the economy they would say, "We are royally fucked."
Wednesday, July 14, 2010
Why Financial Reform Won't Work: Part 1
I have been ranting about financial reform legislation and how it won't work and will probably have horrible unintended consequences but before today, I didn't spell out why I feel that way. Today, I decided to spell it out after I received a email from Barack Obama's people telling me to call Senator Grassley and convince him to vote for the combined bill. The email came in with the subject of Urgent and claimed the legislation is the "boldest overhaul of the financial system since the Great Depression." I like the use of the word boldest in this sentence because bold does not equate to intelligent, well designed, or effective. Once, my co-blogger after drinking for twelve hours, stole a golf cart at a NASCAR race and proceeded to drive in small circles turning left and screaming, "Guess who I am? I'm a NASCAR driver." This was a bold move, one of his boldest. It does not qualify as one of his most intelligent or positive moments and it could have landed him in jail. Sometimes bold moves, while funny as hell, are not good ideas.
What I hate most about the legislation is the creation of a Consumer Financial Protection Bureau. You might wonder why I could hate something that sounds so innocuous and the answer lies with where it will be housed: The Federal Reserve. We are supposed to be comforted by the fact that it is an autonomous bureau with a single director. Look, there is no independent agency or bureau in all of Washington D.C., I don't care what they are intended to be. Furthermore, how autonomous were you when you lived under your parents roof?
The Federal Reserve is one of the 5 major players that created the crisis we find ourselves in and they have no business being anywhere near a bureau intended to protect consumers. They fueled the crisis, failed to recognize it, and then sold consumers down the river in the bailout mess. Putting a Consumer Protection Bureau there is like assigning lions to be security detail for gazelles.
Another key element of the package is regulatory control and accountability for the ratings agencies. The problem with this is that the regulators have to understand what the agencies are doing and what the products are they are actually rating. Half the instruments Wall Street are trading are so convoluted that people within the firms trading them don't know what they are. How could a regulator possibly know what the ratings agencies are doing or what they are rating? Someone smart enough to get it isn't going to work as a regulator, nope, they will go to work on Wall Street inventing new instruments of debt and new ways to sell it. Don't even get me started on the corruption inherent in regulation anyway.
It's very simple; Consumers need to protect themselves. If we have gotten so collectively stupid that we think the government can protect us than we are totally screwed as a nation. The government couldn't protect us from September 11th, then the government created the conditions for the housing crisis, and I'm not sure if you noticed; the government can't fix the economy either. The best the government can do to help the consumer is encourage financial education in the schools and mandate more economics courses for our students. Even that won't solve the problem. When people want to do stupid things (think NASCAR story above), they will find a way to do them.
The email from Barack's people claimed that the bill would end the exploitation of the consumer by ending hidden fees and pages of small print. The pages of small print you get with a loan application are there because of regulations, trust me when I say we would have preferred to not send you fifty pages of documents to get your loan approved. If you think there is small print now, just wait.
The truth is, when I was a loan officer, my customers didn't read the disclosures I sent them. They looked at two things: their monthly payment and their closing costs. They signed fifty pages of disclosures without reading them. Most of my customers would get their loan package and call me and ask for the Cliff Notes, which I was more than happy to provide them. If you really ever read a loan package and understood everything in it, you probably would not want to get a loan. There is a clause in most loan documents that if you make any material changes to your home without notifying your mortgage company they can call the note due and demand full payoff. How many people know that? How many people know that and tell their mortgage company that they turned a bedroom into a stripper lounge?
I don't have the answers on how this gets better but I think it starts with us getting smarter, which is not too promising and quite frankly, makes me fear for the future.
What I hate most about the legislation is the creation of a Consumer Financial Protection Bureau. You might wonder why I could hate something that sounds so innocuous and the answer lies with where it will be housed: The Federal Reserve. We are supposed to be comforted by the fact that it is an autonomous bureau with a single director. Look, there is no independent agency or bureau in all of Washington D.C., I don't care what they are intended to be. Furthermore, how autonomous were you when you lived under your parents roof?
The Federal Reserve is one of the 5 major players that created the crisis we find ourselves in and they have no business being anywhere near a bureau intended to protect consumers. They fueled the crisis, failed to recognize it, and then sold consumers down the river in the bailout mess. Putting a Consumer Protection Bureau there is like assigning lions to be security detail for gazelles.
Another key element of the package is regulatory control and accountability for the ratings agencies. The problem with this is that the regulators have to understand what the agencies are doing and what the products are they are actually rating. Half the instruments Wall Street are trading are so convoluted that people within the firms trading them don't know what they are. How could a regulator possibly know what the ratings agencies are doing or what they are rating? Someone smart enough to get it isn't going to work as a regulator, nope, they will go to work on Wall Street inventing new instruments of debt and new ways to sell it. Don't even get me started on the corruption inherent in regulation anyway.
It's very simple; Consumers need to protect themselves. If we have gotten so collectively stupid that we think the government can protect us than we are totally screwed as a nation. The government couldn't protect us from September 11th, then the government created the conditions for the housing crisis, and I'm not sure if you noticed; the government can't fix the economy either. The best the government can do to help the consumer is encourage financial education in the schools and mandate more economics courses for our students. Even that won't solve the problem. When people want to do stupid things (think NASCAR story above), they will find a way to do them.
The email from Barack's people claimed that the bill would end the exploitation of the consumer by ending hidden fees and pages of small print. The pages of small print you get with a loan application are there because of regulations, trust me when I say we would have preferred to not send you fifty pages of documents to get your loan approved. If you think there is small print now, just wait.
The truth is, when I was a loan officer, my customers didn't read the disclosures I sent them. They looked at two things: their monthly payment and their closing costs. They signed fifty pages of disclosures without reading them. Most of my customers would get their loan package and call me and ask for the Cliff Notes, which I was more than happy to provide them. If you really ever read a loan package and understood everything in it, you probably would not want to get a loan. There is a clause in most loan documents that if you make any material changes to your home without notifying your mortgage company they can call the note due and demand full payoff. How many people know that? How many people know that and tell their mortgage company that they turned a bedroom into a stripper lounge?
I don't have the answers on how this gets better but I think it starts with us getting smarter, which is not too promising and quite frankly, makes me fear for the future.
Tuesday, July 13, 2010
But Wait...There is more....
This my follow up to Turd’s last entry…and I agree this blog is a complete clusterfuck. But clusterfuck’s make the world more interesting. What is the fun in everything running smoothly? The world would be a boring place and I don’t do well with boring.
The Barbie Doll's return basically annoyed me. Yes, there was fear and uncertainty about my future….but what really bothered me was that she was going to plop her Happy Ass down in my sanctuary….the Beach Office. This office had been my escape from the torture of sitting on Gilligan’s Island and being surrounded by the Mortgage Devil and his Minions. After spending that late fall, winter, and Spring in the Beach Office I had grown fond of The Edsel…he was like the Grandpa I didn’t have anymore. I was starting to warm to Turd (her passion for football was admirable) and life was a little more tolerable at the Beach Office.
Then…the Barbie came back. I knew she was going to take over this office and staff it with “her people” and I was going to be pushed out of there. I was certain that I was going to be left spending my days on the Island. This fear certainly wasn’t unfounded…I vividly remember being pushed to the back office at the Beach when The Barbie returned. A few days after she was re-hired, I slipped in the back door and went right to my office. Basically, no one knew I was there. I was unpacking my shit and getting myself set up for the day when I overheard the following conversation between the Barbie’s Husband aka The Controller and “her staff”:
“Her Staff” – I need my old office space back.
The Controller – We will get you whatever office you want.
“Her Staff” – But Turdy and A-Hole already have the office space we want.
The Controller – Doesn’t matter…they can go sit on the fucking balcony for all I care. This is our office now. Not theirs.
“Her Staff” - *school girl giggling*
So, yeah that was confirmation of what I already knew…I was heading back to Gilligan’s Island. I sat and stewed for about five minutes and then I stepped out the office and made a point to say “Hello” to everyone on “her staff” and The Controller. They all grew quiet and I left them wondering exactly how long I had been in the office. The Controller eventually asked how long I had been in the office…with my best poker face I gave a vague response of “ a little while”. I wanted him to wonder if I heard exactly the extent of an asshole he really could be.
Before the infamous meeting, I had more conversations with the Mortgage Devil than I had in…ohhhh, the past six months combined. It was a constant theme of “she will take business from us…we need to stay united against her and make her look bad…you need to keep me posted on everything you see or hear that she is doing for the sake of “our team”…" peppered in between that agenda were some personal remarks about her betraying him when she left the Bank of Hell the previous year. That part of the dialogue bordered on sounding like a scorned lover more than a competitive business concern…but I will leave that speculation for another day. The Mortgage Devil had done a good job of convincing me that my office space concern was trivial compared to the ramifications of her return on my future.
The day of the “Meeting” had arrived. I had steered clear of both offices that day and rolled into the Bank of Hell around noon to do some paperwork before this meeting. I got bored quickly and headed out for some lunch. When I came back I saw the Mortgage Devil was in his smaller office with his door closed. I couldn’t see who was with him, so I assumed it was the Douchebag from Josey Wales. Then I saw that the Douchebag was in the Enabler’s office…not the Mortgage Devil’s. So, I am thinking it must be a customer. I am on my phone and then I am summed in to the Mortgage Devil’s Big Office for the Big Meeting. As I hang up the phone, I see the door to the Little Office open and outcomes the Mortgage Devil and…THE BARBIE!! Son of a Bitch!!! They were having a meeting before our Big Meeting? My head was spinning….what the hell is going on? I walk into the meeting and we were blindsided as Turd mentioned earlier. I started to understand what Joe Theismann felt when Lawrence Taylor hit him blindside and snapped his leg. Well…not nearly as painful…but similar in the shock and surprise. Now I understood what the meeting between the Mortgage Devil and Barbie BEFORE our meeting was about...he was setting us up. FUCK!!!
Turd had no clue they had a meeting before our Big Meeting. She was already in the office where the meeting was to take place. Obviously, I had no chance to tell her about this little fact. The whole thing unraveled in about a 10 second span.
Well, Turd summed up the rest of the Big Meeting well in the previous entry so I don’t want to be redundant. But I will say that I…like Turd...was so pissed off by being mutually screwed that it drove us together and made us allies and friends forever.
Ohhh...and Turd...I was never invited to your Baby Shower. Apparently, the Mortgage Devil and his Minions lost my invitation before they had a chance to mail it to me. I never knew about it until after we left the Bank of Hell and you told me about it. So, you weren't snubbed...well at least not by me.
The Barbie Doll's return basically annoyed me. Yes, there was fear and uncertainty about my future….but what really bothered me was that she was going to plop her Happy Ass down in my sanctuary….the Beach Office. This office had been my escape from the torture of sitting on Gilligan’s Island and being surrounded by the Mortgage Devil and his Minions. After spending that late fall, winter, and Spring in the Beach Office I had grown fond of The Edsel…he was like the Grandpa I didn’t have anymore. I was starting to warm to Turd (her passion for football was admirable) and life was a little more tolerable at the Beach Office.
Then…the Barbie came back. I knew she was going to take over this office and staff it with “her people” and I was going to be pushed out of there. I was certain that I was going to be left spending my days on the Island. This fear certainly wasn’t unfounded…I vividly remember being pushed to the back office at the Beach when The Barbie returned. A few days after she was re-hired, I slipped in the back door and went right to my office. Basically, no one knew I was there. I was unpacking my shit and getting myself set up for the day when I overheard the following conversation between the Barbie’s Husband aka The Controller and “her staff”:
“Her Staff” – I need my old office space back.
The Controller – We will get you whatever office you want.
“Her Staff” – But Turdy and A-Hole already have the office space we want.
The Controller – Doesn’t matter…they can go sit on the fucking balcony for all I care. This is our office now. Not theirs.
“Her Staff” - *school girl giggling*
So, yeah that was confirmation of what I already knew…I was heading back to Gilligan’s Island. I sat and stewed for about five minutes and then I stepped out the office and made a point to say “Hello” to everyone on “her staff” and The Controller. They all grew quiet and I left them wondering exactly how long I had been in the office. The Controller eventually asked how long I had been in the office…with my best poker face I gave a vague response of “ a little while”. I wanted him to wonder if I heard exactly the extent of an asshole he really could be.
Before the infamous meeting, I had more conversations with the Mortgage Devil than I had in…ohhhh, the past six months combined. It was a constant theme of “she will take business from us…we need to stay united against her and make her look bad…you need to keep me posted on everything you see or hear that she is doing for the sake of “our team”…" peppered in between that agenda were some personal remarks about her betraying him when she left the Bank of Hell the previous year. That part of the dialogue bordered on sounding like a scorned lover more than a competitive business concern…but I will leave that speculation for another day. The Mortgage Devil had done a good job of convincing me that my office space concern was trivial compared to the ramifications of her return on my future.
The day of the “Meeting” had arrived. I had steered clear of both offices that day and rolled into the Bank of Hell around noon to do some paperwork before this meeting. I got bored quickly and headed out for some lunch. When I came back I saw the Mortgage Devil was in his smaller office with his door closed. I couldn’t see who was with him, so I assumed it was the Douchebag from Josey Wales. Then I saw that the Douchebag was in the Enabler’s office…not the Mortgage Devil’s. So, I am thinking it must be a customer. I am on my phone and then I am summed in to the Mortgage Devil’s Big Office for the Big Meeting. As I hang up the phone, I see the door to the Little Office open and outcomes the Mortgage Devil and…THE BARBIE!! Son of a Bitch!!! They were having a meeting before our Big Meeting? My head was spinning….what the hell is going on? I walk into the meeting and we were blindsided as Turd mentioned earlier. I started to understand what Joe Theismann felt when Lawrence Taylor hit him blindside and snapped his leg. Well…not nearly as painful…but similar in the shock and surprise. Now I understood what the meeting between the Mortgage Devil and Barbie BEFORE our meeting was about...he was setting us up. FUCK!!!
Turd had no clue they had a meeting before our Big Meeting. She was already in the office where the meeting was to take place. Obviously, I had no chance to tell her about this little fact. The whole thing unraveled in about a 10 second span.
Well, Turd summed up the rest of the Big Meeting well in the previous entry so I don’t want to be redundant. But I will say that I…like Turd...was so pissed off by being mutually screwed that it drove us together and made us allies and friends forever.
Ohhh...and Turd...I was never invited to your Baby Shower. Apparently, the Mortgage Devil and his Minions lost my invitation before they had a chance to mail it to me. I never knew about it until after we left the Bank of Hell and you told me about it. So, you weren't snubbed...well at least not by me.
Me and A. Hole
This blog is a complete clusterfuck. I swore it would be chronological but then I have used it as a platform to bitch about the consolidation of banking and the government's role in the housing crisis. I have determined the format to be FUBAR and thus, I have decided today I will blog about what I feel like. After all, this is my blog.
It is common knowledge that A.Hole and I were not friends at first sight. The Barbie Doll's return prompted us to be friends because fear and uncertainty are powerful motivators. I promised a month ago to blog about the infamous "Sitdown" that entrenched us as allies, but I didn't. Check out The Bitch is Back if you don't know the back story. I guess my check back tomorrow really meant, "Wander back in a month or so, I might or might not actually tell you what happened."
The Mortgage Devil called a meeting with his boss, a guy so salesman slick that every single time I saw him I was reminded of the scene in The Outlaw Josey Wales with the dude on the ferry who changed his tune depending on which side was on the raft. The meeting is going to be with me, A. Hole, the Douchebag from Josey Wales, Barbie, and the Mortgage Devil. For weeks the Mortgage Devil had been prepping us on all we should be upset about and vent to our superiors and he told us all the concerns he would raise at the meeting. Let me be clear, when the Mortgage Devil called a meeting, I usually didn't attend. On the rare occasions I did, I would stroll in late and look annoyed and spend the majority of the meeting fantasizing about being a pirate or being drunk at Happy Hour. This meeting however, was important for my career. Or at least that was the bullshit story I was fed.
I rolled in early and eight months pregnant, wearing a strapless dress as a skirt. I was wearing a shirt, I swear. The Barbie introduces herself and asks, "Wow, do you always look this great pregnant?" I respond, "It is hard to say, this is only my second time." She doesn't seem to be the dragon slayer I was expecting; in fact, she seems awfully nice and wanting to impress. I find it hard to hate her during our small talk and now, I am confused.
Before the meeting the Mortgage Devil goes over the things he is concerned for us for and encourages A. Hole and I to tell the slick seersucker suit wearing asshole from Josey Wales everything he has said. We walk into the most awkward meeting of all time. The Barbie and The Devil haven't been in the same room for months. There are rumors all around that the demise of their partnership was a sordid affair which led to her rapid departure and this fact is not lost on me or A.Hole as we sit down to face our future.
The meeting starts and the Mortgage Devil tells seersucker suit guy that his best loan officers have concerns. A. Hole and I elucidate the concerns we have been fed by the Mortgage Devil and then wait for him to back us up, and we wait. He gives his boss, Seersucker Carpetbagger, a glance that looks to be saying, "Look at these whiny bitches, you deal with it." Here is where it goes awry. Seersucker Carpet Bagger tells us in not so polite terms that we are in fact, whiny bitches, and we need to get on board. He regales us with stories of loan officers who prosper in competitive markets and wonders why we suffer from such low self esteem that we would be threatened by Barbie's return. The Barbie Doll seems hurt and defensive and reassures us that she wants life to be good for us and has no idea why would be worried about her hurting our business or happiness. A. Hole and I are so floored we say nothing, which is an absolute oddity and a freaking miracle. We endure a twenty minute lecture where our boss, the Mortgage Devil, nods his head at every critical thing the Seersucker Carpet Bagger tells us. We have been thrown under the bus. The Mortgage Devil set us up to look like whiny bitches and get shit off his chest and then turned coat on us and played Polly fucking Anna. Surprising? Nope. Disappointing? Hell Yes.
I get in my Volvo, the official car of libertarian loan officers, and immediately call A.Hole on his cell phone. We are both furious and ranting and raving. A. Hole and I both realized we were completely set up and our higher ups now were laboring under the impression that we were scared little fear mongers with no competitive spirit. The Mortgage Devil had slipped one by us and nothing is more painful than that.
I was so upset by the tongue lashing of the Seersucker Carpetbagger that I called my Operations Manager, the Enabler, and threatened to quit. She reassured me that everything would be fine and that the Mortgage Devil was just trying to make things right by me and A. Hole. Extremely pregnant, I realize I won't be fighting this battle at the moment and so I stew. I spend the last month of my pregnancy marketing and closing loans and on a Friday, send out a bunch of cold call letters to realtors touting my awesome abilities to get loans done at the Bank of Hell.
That Sunday, I give birth to my daughter. But not before my operations manager holds a baby shower for me at the Bank of Hell where everyone hates me, or at least does a shitty job of pretending to be my friend. A. Hole is not invited or he doesn't show up. Wait a minute, why didn't you show up Fucker? I digress....at said baby shower, the Mortgage Devil entertains us with stories of how he has missed almost all of his kid's firsts and great moments due to his commitment to the mortgage industry. He goes on to tell stories of when he has mortified his kids in public because he is such an asshole. I was miserable at my baby shower because the Mortgage Devil used it as a platform to talk all about him, as usual.
A.Hole and I became friends because of the Barbie and the extreme foulness of the Mortgage Devil, but when I returned from so called, "Maternity Leave", they put us in the cave together. Big mistake, morons. Big Mistake. That is when the shit hit the fan. Stay tuned, I may get around to that story tomorrow....or not.
It is common knowledge that A.Hole and I were not friends at first sight. The Barbie Doll's return prompted us to be friends because fear and uncertainty are powerful motivators. I promised a month ago to blog about the infamous "Sitdown" that entrenched us as allies, but I didn't. Check out The Bitch is Back if you don't know the back story. I guess my check back tomorrow really meant, "Wander back in a month or so, I might or might not actually tell you what happened."
The Mortgage Devil called a meeting with his boss, a guy so salesman slick that every single time I saw him I was reminded of the scene in The Outlaw Josey Wales with the dude on the ferry who changed his tune depending on which side was on the raft. The meeting is going to be with me, A. Hole, the Douchebag from Josey Wales, Barbie, and the Mortgage Devil. For weeks the Mortgage Devil had been prepping us on all we should be upset about and vent to our superiors and he told us all the concerns he would raise at the meeting. Let me be clear, when the Mortgage Devil called a meeting, I usually didn't attend. On the rare occasions I did, I would stroll in late and look annoyed and spend the majority of the meeting fantasizing about being a pirate or being drunk at Happy Hour. This meeting however, was important for my career. Or at least that was the bullshit story I was fed.
I rolled in early and eight months pregnant, wearing a strapless dress as a skirt. I was wearing a shirt, I swear. The Barbie introduces herself and asks, "Wow, do you always look this great pregnant?" I respond, "It is hard to say, this is only my second time." She doesn't seem to be the dragon slayer I was expecting; in fact, she seems awfully nice and wanting to impress. I find it hard to hate her during our small talk and now, I am confused.
Before the meeting the Mortgage Devil goes over the things he is concerned for us for and encourages A. Hole and I to tell the slick seersucker suit wearing asshole from Josey Wales everything he has said. We walk into the most awkward meeting of all time. The Barbie and The Devil haven't been in the same room for months. There are rumors all around that the demise of their partnership was a sordid affair which led to her rapid departure and this fact is not lost on me or A.Hole as we sit down to face our future.
The meeting starts and the Mortgage Devil tells seersucker suit guy that his best loan officers have concerns. A. Hole and I elucidate the concerns we have been fed by the Mortgage Devil and then wait for him to back us up, and we wait. He gives his boss, Seersucker Carpetbagger, a glance that looks to be saying, "Look at these whiny bitches, you deal with it." Here is where it goes awry. Seersucker Carpet Bagger tells us in not so polite terms that we are in fact, whiny bitches, and we need to get on board. He regales us with stories of loan officers who prosper in competitive markets and wonders why we suffer from such low self esteem that we would be threatened by Barbie's return. The Barbie Doll seems hurt and defensive and reassures us that she wants life to be good for us and has no idea why would be worried about her hurting our business or happiness. A. Hole and I are so floored we say nothing, which is an absolute oddity and a freaking miracle. We endure a twenty minute lecture where our boss, the Mortgage Devil, nods his head at every critical thing the Seersucker Carpet Bagger tells us. We have been thrown under the bus. The Mortgage Devil set us up to look like whiny bitches and get shit off his chest and then turned coat on us and played Polly fucking Anna. Surprising? Nope. Disappointing? Hell Yes.
I get in my Volvo, the official car of libertarian loan officers, and immediately call A.Hole on his cell phone. We are both furious and ranting and raving. A. Hole and I both realized we were completely set up and our higher ups now were laboring under the impression that we were scared little fear mongers with no competitive spirit. The Mortgage Devil had slipped one by us and nothing is more painful than that.
I was so upset by the tongue lashing of the Seersucker Carpetbagger that I called my Operations Manager, the Enabler, and threatened to quit. She reassured me that everything would be fine and that the Mortgage Devil was just trying to make things right by me and A. Hole. Extremely pregnant, I realize I won't be fighting this battle at the moment and so I stew. I spend the last month of my pregnancy marketing and closing loans and on a Friday, send out a bunch of cold call letters to realtors touting my awesome abilities to get loans done at the Bank of Hell.
That Sunday, I give birth to my daughter. But not before my operations manager holds a baby shower for me at the Bank of Hell where everyone hates me, or at least does a shitty job of pretending to be my friend. A. Hole is not invited or he doesn't show up. Wait a minute, why didn't you show up Fucker? I digress....at said baby shower, the Mortgage Devil entertains us with stories of how he has missed almost all of his kid's firsts and great moments due to his commitment to the mortgage industry. He goes on to tell stories of when he has mortified his kids in public because he is such an asshole. I was miserable at my baby shower because the Mortgage Devil used it as a platform to talk all about him, as usual.
A.Hole and I became friends because of the Barbie and the extreme foulness of the Mortgage Devil, but when I returned from so called, "Maternity Leave", they put us in the cave together. Big mistake, morons. Big Mistake. That is when the shit hit the fan. Stay tuned, I may get around to that story tomorrow....or not.
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