Note to Homeowners

REVIEW YOUR ESCROW ACCOUNT STATEMENT CLOSELY.

I received mine last night, and after reviewing it, here's what I found:

1) For the coming year, my bank increased my mortgage by $4/mo because I dropped below the 'cushion' one month this past year. I expected that as my insurance increased due to the remodels I've done. That's okay. It's not that huge an increase.

2) But then they project that for this coming year I'll be an additional several hundred short by the end of the year. So they increased the payment by another $14/month until March 2009.

Now, match isn't my best subject, but I was sitting there going WTF? The only reason I dipped below the "cushion" was because my insurance went up. They used all the same insurance & tax numbers for next year's projections, with an increased amount going into my escrow account each month. So how in the world, based on my current payments, am I going to be short by the end of the year? Here's how:

When calculating actual payments for this year, they did not include the final 2 months escrow payments. Which totally makes up for their predicted "shortage". So now on Monday I have to waste my lunch at the bank to get this sorted out. It's not like I can't do the extra $18/month for a year. I can. But it's the principle of the thing, you know? Do your damn accounting right from the start, thank you. And you better damn well account for every single dime I give you, 'cause I'm gonna catch it. ;)

Okay. Crankiness gone. :)

Thar' She Blows

Apparently it's let's be cranky day, 'cause we're all cranky at work. From the coworker who didn't make it in today because her Great Dane was sick all night and into this morning (trust me, a sick Great Dane is nothing to be sneezed at) to the boss who's cranky (well, he's still dealing with his wife's unexpected death. The man has a right to be cranky.) At least he's trying to be humorous about it...

And then there's me. Unfortunately, I listened to the news this morning. Why do I do this to myself?

So the office today is full of angst, and ready to blow at any minute! Add the strange phone calls we kept getting this morning, where this guy starts by saying "Are you sitting down? Someone you know in your community is overworked and underpaid..." Well duh. Covers just about everyone, doesn't it? Our receptionist kept hanging up on him. Told her if he called back (we have a total of 3 direct lines and 4 roll-over lines) to put it through to me...I also told her if it keeps up like this I might just hand her my card and send her on a Starbucks run. [g]

So. The news this morning. Okay. Just why should the government bail out individuals that got risky home loans and now can't make their mortgage payments? Seriously. This pisses me off. I know, I know, too many foreclosures will hurt the banks and the economy, yadayadayada. The economist in me is struggling with the fiscally responsible homeowner in me.

It's just one more case of people getting bailed out by the government. Where will it end? Seriously. You can't tell me all these people having trouble because they got subprime mortgages and ARM mortgages didn't know. Not all of them. I don't buy that. Oh, sure, there are more than a few that were totally unaware. But why should they be bailed out either?

A little, and I'm talking a little bit of research would have cleared that up. One question to the banker, "What's an ARM?", would have done that. Why shouldn't people that get themselves in trouble have to deal with the repercussions? They made the stupid a$$ financial decision, why should I (and make no mistake, it is you and I, John Q. Taxpayer) that bail them out. Government funds aren't infinite. When you give to one, you take from another...

People got greedy. They saw skyrocketing home-appreciation prices and bought more than they could afford, thinking they could handle the extreme payments for a year or so, and who needed to worry about ARM's? Interest rates are historically low...they've been going down, not up. And besides, in a few months we'll be able to sell the house for a huge profit.

Banks and mortgage companies got greedy. Started loaning money to anyone that walked through their doors. And everyone forgot the reason why they started using credit reports in the first place. And the basic fact that you can't pay out more than you bring in!

It's ridiculous. Fiscally irresponsible. And totally lacking in personal responsibility. And what do people learn from this? Once more, they learn: the government will bail me out. Well, sorry. I work my butt off to pay ALL my bills. Including the mortgage. I educated myself on home loans and what it costs to own a home. There are tons of organizations out there. A simple Google search will get you all the information you could ever want. I think way too many people use the "I didn't know. Nobody told me," as an excuse. It's a bunch of bull-$&*t. And I'm tired of it.

I know. I am totally lacking in any kind of empathy this morning. But give me a break!

Me

So I've rediscovered some stuff about myself lately that I hadn't even realized I'd forgotten! The debate on the BB about immigration, and my subsequent wading in and researching has made me realize how much I've missed discussing politics and economics and international affairs.

I mean, there was a reason that's what I majored in, and why I got my B.A. in Economics & International Relations in the first place.

Especially the economics stuff. I'd forgotten how much I really, really like this stuff. :) It's like my brain has woken up again.

Anyway. A few things in the news have gotten me going, and I'm just gonna post a bit here before going on to BOOKS.

1) Obesity is Contagious. Heard it on the news this morning. Uh-huh. Apparently, according to a new study,

Our ideas about what's a normal amount of food or exercise, and what counts as a normal body size, all seem to be influenced by the people to whom we're connected. And researchers believe these "norms" ultimately shape our weight.

http://www.npr.org/templates/story/story.php?storyId=12237644 Well, duh. Coulda told you that.

2) Housing Market "Slump". Now it's not just subprime mortgages defaulting. Another "well, duh."

When I took the first time homebuyer's class out here in the beginning of 2006, they brought in a bunch of banks/mortgage companies to meet with us individually. I met with 3 of them. One of them was Countrywide. All three of them looked over my credit report and credit score (I'd already obtained them, it was part of the class to get them for the bank meetings). I have excellent credit (yeah, I'm boasting. It was hard work to get that credit score) the highest my banker said she's ever seen. Anyway. ALL of them said I qualified for $120,000 to buy a home. Countrywide was even willing to loan me up to $140,000 for a mortgage. WTF?

See, I'd already done my homework. There was - still is - absolutely no way for me to afford that. Not and buy groceries, put gas in the car, pay the utilities, keep a little set aside for house repairs/emergencies. Not to mention cable and phone and internet. And entertainment (for me, that's my book budget.) Or clothes. What the hell do these people think? That people will live without these things? Hardly. Life isn't worth living otherwise! (Or possible if you have no food!)They absolutely did not take into account any of that. Crazy.

Most I could afford is $80,000. That's $40,000-$60,000 less than what they were willing to give me. That's a big difference when it comes to mortgage payments. So I am not surprised that people are defaulting, even those with good credit. Not with the way gas prices and other prices are rising...seriously.

We live too much on the premise that "bigger is better." And appearances mean everything. Must have the biggest and best of everything. I shake my head as I watch the HGTV shows "Househunters" or "Designed to Sell". A lot of the time these families are saying "We have to get a bigger space because we've run out of room." And as the cameras pan through their homes, I almost inevitably think, "Geez, get rid of some of that stuff and you'll have tons of room!"

Most people I know are appalled at my little house. It's tiny and old and needs work. But it's just me. What do I need with several thousand square feet and four bedrooms and three baths? I don't even use the upstairs space - that's about 600sq feet used on storage. Oh, I have dreams of a craft room and guest room. But all my time is spent in the living room and kitchen.

All those people who are appalled at my little house, are struggling now. But I've absorbed the increased gas prices and other prices (including property tax increases) into my budget. Oh, don't get me wrong, money is tight, but not that tight. I was able to pay Scully's vet bill of $125 in cash this month. Bought that new storm door with pet door in it and paid it off in 2 months. So. Anyway. I just want to know: what the heck happened to personal responsibility? Everyone let the apparent "richness" of the housing market go to their heads. Short term thinking. Hel-lo-o-o. What goes UP must eventually go DOWN.

It's a hard lesson to learn, and I probably sound harsh and full of myself. But hey. It's not like this is new. It's basic personal finance.

And now I've rambled enough...and used up so much space on these two items I'm going to postpone my book post until later. :)