Floating Money

As a bystander in the housing financing crisis, sometimes the scene is pretty sad. In my own experience, occasional aggravation–not so much sadness. My wife and I have kept within the bounds of what we’ve been able to afford. We now own our first house (#3 overall) within the boundaries of the parish I serve … as long as you don’t count the university campus itself.

Somebody teased us when we bought our first house about living in another parish. I know they were pulling my leg, but still: they didn’t know the salary they paid was not enough to afford the most modest homes of my parishioners. They also didn’t know my wife was initially offered a sub-minimum wage job by the parish school. There was a bit of a sting to the comment nonetheless.

Paying off houses has been more of a mindless monthly sending of a check (or lately, an electronic payment) peppered every so often with the sale of the mortgage. Or the servicing of the loan. Twice I’ve been hit up for double mortgage payments. Including today, sort of.

Got a call from my friendly bank this morning informing me I was way overdrawn on my checking account. A quick look online found two mortgage payments, one dated the 28th of last month, the other yesterday. I was shocked, a little worried, but I wasn’t really surprised. There would seem to be something wrong when an unknown business can just swoop in and help itself to a slice of your checking account.

I am amazed that loan servicers can get away with this. I received a letter on the 26th of August, dated the 18th, saying the servicing of my mortgage had been turned over to another business as of the 12th. Actually, I would have done well to ignore the whole thing. I didn’t read all the fine print of the accompanying document, so I cancelled my mortgage payment set up for the 28th, and arranged for an electronic draft to be sent to the new holders. I found out today that a company I had never heard of, and until a few days ago had never heard from, had set up an automatic withdrawal from my account. I was sure this had to be wrong somehow. But apparently corporate America allows one to do this.

I came home for my lunch hour and I was pretty upset. I wondered out loud what would happen if I called the local police (or the FBI?) and said someone had robbed my checking account. My sensible wife chimed in and encouraged me to the high road. And I was charming the rest of the day.

I still have to say I think this is very bad business. While I was on hold, I went to my new servicer’s web site and saw many, many, many negative comments. A few positive experiences. But lots and lots of bitterness. I resolved to stay calm, knowing I was going to speak with a person who was just trying to do her job. I knew this company, reportedly taking over hundreds of thousands of mortgages, was likely in over their heads. Nice way to introduce yourself to new customers. Good thing for them, I reflected, most American homeowners don’t get to choose with whom they do business. Imagine a free market on mortgages. I suspect a lot of such business would stay local, and national-level companies like my new one wouldn’t even be a twinkle in a corporate eye.

Wouldn’t it be better for my city’s citizens who are out of work, if this kind of banking stayed local? Clearly, the big corporations are in way over their head on this. Customer service rated very low. The switch-over process seems rife with errors. Big business, not to mention Republicans, getting more dirt on their once-good name. Of course, I realize the Dems are thick in banking almost as deep.

When I was at my bank scrambling to deposit sufficient funds for my October house payment, I read the headline on a business article, “Consumers still not spending; economy lags.” A corporation raided my checking account for almost a thousand dollars today and they want me to spend more? What about coughing up some jobs, eh? Or was this all a trick to get me to write a convenience check on my credit card?

As it turned out, my bank put a stop on the light fingers of corporate financing by refusing payment on the second draft. The person I spoke with out-of-state set me up with monthly payments starting in October. The credit card company didn’t get their 3%, plus 0.99% special offer interest. And I have a little cash to spread in the local economy, instead of coughing up fees and other nonsense.

I’m still in a letter-writing mood after today’s fuss. What should I tell my new corporate masters?

Dear friends,

Congratulations. You are now servicing my home loan.

If I had anything to say about American capitalism as practiced today, I would have preferred to keep my business in my own city. Wall Street offers me no competitive choice over Main Street. In fact, if we homeowners actually got to choose who loans us money, you wouldn’t even be in business, most likely.

How you came to be in the position you’re in is a mystery to me. You have a very nice employee in customer relations. But none of my friends or neighbors are working for you, unlike the people who sell me food, clothing, car repair, garbage collection, or my daughter’s sports or music camps. Clearly, you think the profit motive trumps actual business relationships. I actually feel sorry for your poverty on that score.

If you ever want to discuss knocking two percentage points and a few years off my mortgage, let me know. Better yet, let me make a settlement offer and spread it out over twenty years. That would reverse the mortgage process in a very satisfactory way, don’t you think? I’d be willing to forget all about today and give you a recommendation to boot.

Have a nice day.

 

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About catholicsensibility

Todd and his family live in Ames, Iowa. He serves a Catholic parish of both Iowa State students and town residents.
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