That link above is Francesca Lia Block’s blog. Yes, THAT Francesca Lia Block; she of Weetzie Bat, Violet & Claire, and Dangerous Angels (to name a few). She is posting about her troubles with her mortgage company. Please go read it. The timeline is heartbreaking.
I used to work for a refinancing company. I worked with Countrywide occasionally. I remember the interest-only loans. I remember getting people 2% interest-only loans on $300,000 refinances, which would be the full appraised value of the house.
I know that values on appraisals were often “stretched.” Stretching a value means that the appraiser does the best they can to inflate the value based on the best of the neighborhood, or amenities that the owners had added on. Often, these values were higher than what really should have been allowed. But companies let them slide, after all, appraisers are licensed.
I remember my boss telling clients “Don’t worry, home values are only going up.”
The company I worked for closed down six months after I walked out on it. Yes, I walked out on the job. I had been making good money for someone with no college degree (honestly, I’d been making good money for any 20-something). The stress wasn’t worth the money.
I remember the day I walked out, too. We had a client at the closing table. My boss was about to leave for another vacation, so a lot of the communication was falling to me. I don’t remember why my closing manager wasn’t there. I usually handled the beginning of the refinance, and she handled closing and final paperwork. Something had gone wrong. It was another interest-only loan (that’s all we were doing at the end). Countrywide loved us. I remember my boss yelling about how something was wrong with the type of interest only. It was too late to fix it. I walked out. I hope the client backed out, I really do. We’d rushed that loan though in two weeks, maybe even less.
A normal refinance, when I started working there, took about 3-6 weeks. Then again, a normal refinance, we were actually helping people.
There’s a good feeling when you talk to a client and they have a 8% rate loan, as well as 20% interest rate credit cards and you can bundle it all together into a 6% 30 year fixed-rate loan on their house. You actually feel like you’re doing something to help them. By the end though, we weren’t helping them. We were doing business to make the companies to make money, and to put money into our own pockets. I made $100 per loan that I closed. In a good week, that was an extra $500. My boss could make from $1,000 – $6,000 on one loan.
The mortgage market is a dark and scary place. I wish it wasn’t. I wish that mortgage companies were more like it was back when I’d started doing refinances in 2004. I liked helping people.
Dear Mortgage Companies and Government,
Please help people save their homes. Isn’t home-ownership part of the American Dream? You remember that: white picket fences, a yard?
Put some trust into the average consumer. Many of us are tired and broke. But we work hard. We try hard. I’m not asking for loan forgiveness. Just work with us, lower our interest rates and give us a chance.