The Soda Stand

Archive for October, 2006

I’ve been composing a letter to the Finance Lady who screwed us into the situation we are currently in. So far, it’s professional, yet angry at the same time. I love the written word. I can express my feelings without going off the deep end and I can express myself more clearly.

On the note of the finance thing, I’ve made a decision to try to draw out of my deferred comp (similar to a 401k) to pay our prepayment penalty that we will have. I slept on it, I prayed on it and I meditated on it.

Our Finance Guy is finding it difficult to find anyone who will appraise this place at the amount we need. And if we don’t get a certain amount, we can’t pay the prepayment penalty. If we can’t pay the prepayment penalty, we can either suckit up and get further upside done in the house or we sell. Neither one of those options are something we want too do.

To draw out of the deferred comp program, is like pulling teeth. There’s a huge packet I have to fill out and then it has to go in for “review” and then if they deem the “reason” I need the money worthy, they will give it to me. Cross your fingers, pray, send positive thoughts that they find my reasons worthy.

I requested the packet today and got it via email. HOLY FUCK! They ask a lot of personal financial questions, but I guess they have to do that in order to make sure I really need the money. But damn. It’s none of their business. I’m tempted to stop participating in the deferred comp plan if they deny it.

Makes me sick to my stomach that I can’t even get into the money that *I* put in there. I put a certain amount in each pay check. GAH!

The money from that would not only pay for the prepayment penalty, but put us in a position where we would not have to worry about losing the house anytime soon.

It makes me sick to my stomach that I’m having to do this and it makes me resent that bitch (the Finance Lady) even more than I already do.

On a calmer note, I will fill out the forms and I will jump through their hoops. I’ll do this so we don’t have to sell the house.

Until next time….

p.s. Hey, did you see I have a fan club? I’m loved.

Defect (per Wiktionary) means a fault or malfunction.

Character (per Wiktionary) means (and this is the context I’m using it) a distinguishing feature; characteristic; A complex of mental and ethical traits marking a person or a group.

WOW!!!! A malfunction or a fault of complex mental and ethical traits that make me who I am. Holy Shit!

When I worked step 4 (Made a searching and fearless moral and financial inventory of ourselves), I made a list of defects of character. As well as a list of positive character traits. Some of MY defects of character were (and sometimes still are):

Pride; Selfishness; Impatience; Blaming; Rationalizing; Anger; Lust; Arrogance; Conceit; Condemnation of Others; Egotism; Laziness; Self Pity; Worry; Anxiety.

Those are just a few that I put on my list as I took that moral inventory. I wrote down every thing I had ever done to enable myself to gamble. I wrote down every lie I told, every penny I stole and/or spent. It was hard to face all that and put it on paper. I thought I was a horrible person.

Then I worked step 5 (Admitted to ourselves and to another human being the exact nature of our wrongs). This step helped me “give it away”. I basically sat with my sponsor and told her and God everything I had ever done. Everything I put on paper for step 4 was revealed to my sponsor. Everything.

After working that step, I found out I wasn’t such a horrible person. I was just sick. I needed help and I knew I was in the right place to get that help. I found out I was a person of integrity, courage and humility. I found out I was honest, trustworthy, and a good listener.

I’m grateful for each day that I have without a bet. I am grateful for each day I have that I don’t let those defects of character rule my world. However, if you haven’t noticed, I’ve been struggling with that Anxiety one lately haha Go figure.

I’m working on it, one day a atime and I’m making progress. I seek progress without seeking perfection. I know that I am not perfect and I never will be. As long as I’m happy and I keep my side of the street clean, end my day without hurting myself or others, I’ll be in a good space.

I woke up early today, my hair appointment is at 9:30am. This was rescheduled from last week when Hair Lady got stuck behind some flood water. Whatever. I’ve been drinking my coffee and I realized as I turned on ESPN, Sportscenter is no longer on at 7am on Saturdays. It’s College Gameday. GAH!

I’ve noticed several things since I stopped taking one of my meds (the hormone), I’ve stopped hurting in certain areas of my body. You know, my boobs. They stopped being so tender I couldn’t walk. They are no longer tender/painful, nothing. I was/am quite pleased to realize this cause that was one of the worst physical side effects of that hormone.

I’ve noticed my emotions have started to level off. Now I don’t know if that is because I stopped the hormone treatment or cause I’m now on Lexapro. HAH. It could be a combination of both.

My neck, back and shoulders need a good massaging cause I’m so tense it hurts. I still have a $200 coupon from one of the high end spas at the Venetian to use, so I believe I will be calling them to redeem these services.

Early voting starts today. Mom and I are probably going to go take care of that today or tomorrow. Since I’ll be laid up on election day, gotta get it done!

I’m going to be posting some recovery related stuff later today (when I get home from getting my hair done).

Have a great Saturday!

I’ve set my quit date. October 29, 2006 I will have my last cigarette. I was going to talk to the doctor about Chantix, a new drug to help smoking cessation. However, given my current financial strugglings, I can’t afford it since it is not covered by insurance.

I sat back and thought, well shit. Now what? So I decided I would quit anyway. Aren’t you proud of me? I’ve marked it on my calendar at work and in my personal calendar. Between now and then I’m also going to try to cut down on my smoking, so when the 29th gets here I will be ready to throw them out when I go to sleep.

It’s Friday. I love Fridays. It was slow at work, not much to do and very relaxed. Sat out on the patio with my buddies and had some coffee before they had to hit briefing and I had to go start my day at my desk.

In a few short days, I’m going to get to meet one of my favorite online blogging buddies, Mr. Fab.

Mr. Fab and his wife will be here in town and we are going to meet up on Tuesday after I get off work.

At least, I think it’s Tuesday! At any rate, whatever day it is, can’t wait to meet you! You’re fucking crazy and I like that in my friends (yes I blatantly took that from the Dr Phil picture roaming the internet…I took it and feel no remorse for saying it)

Hopefully, I’ll also get to meet Kellie from Suthern’s Place. Isn’t that odd, it takes a blogger from out of town to get us Vegas folks together hahaha. Maybe we should plan a Vegas get together or something? Any of you Vegas people interested in that?

I’d be interested in a Vegas get together sometime after my surgery and I’ve had some time to heal. Let me know what you think Vegans.

Until next time…

I have been a big fat cry baby lately and thank you to my dearest blogging friends (and family members) who have continued to read and post comments. Thank you thank you. It shouldn’t be too long until I’m all better and back to my normal self again.

I was chatting with my brother in IM this evening and I got sappy. I miss my nephews, I miss my brother and I miss my SIL. I asked how the boys were doing and he gave me updates on their bike riding abilities and I started bawling. Like a baby.

I realized during this conversation that I am so not myself lately. I’m not normally as sappy and cry babyish as I am right now. I’m not normally as hot headed, quick to strike out and I’m not as quick to cry either.

Things that normally do NOT make me cry, have me crying like a baby and blowing my nose every two fucking seconds. At home and at work.

People have told me that for the first 2 weeks after they release me from the hospital, I’ll have to have someone around 24 hours around the clock. So I made phone calls last night and today to two different friends, asking what nights a week they are available to sit with me while mom is at work. I cried both times.

Yes, I made these phone calls before actually being told by my doctor this has to happen. Need to make sure I got the coverage, ya know? Haven’t even been instructed yet and I’m making plans for it. LOL. THAT is so me.

At work today, I started crying no less than 5 times. Why? Well because friends asked me if I was alright, that’s why. No other reason. They showed concern, I busted out with the tear factory. Good God, I just started crying in front of cops. Who’d have known that would ever happen? GAH!!!

I got a diagnosis from the doctor yesterday and I’m on some new medication to help me deal with all this shit going on in my life. I have high hopes and a lot of Faith that it will work. My surgery is scheduled for the end of the month and I’m looking forward to that.

I’m also considering going into therapy for some of the stuff. Actually, OK, all of it. I’ve never been diagnosed with this stuff and I’m thinking a therapist would help me understand not only what I was diagnosed with, but my emotions and the stuff I’m feeling.

thanks again and until next time…..

Here we are, once again, on my favorite day of the week. I’ve got a long winded FOAD for you today. Without mentioning any names and no exact specifics….enjoy it as much as I did while writing it.

First and foremost, I’d like to address mortgage brokers and loan officers. The ones specifically I’m talking about are the ones who are predators. They search out the naive consumers and take advantage. It’s like they can smell the naivete on those consumers who do not have the knowledge needed to make informed decisions.

Naivete of the consumers (like me) aside, it’s the broker/loan officers job to inform the consumer on what they are getting into too. Some of these brokers (fuck it, I’m calling them cunts) cunts look and shop around for the most naive of us out there.

They contact us one month and say something like “I can get you into a better loan for your house. It will be sooooooo much better. It will save you lots of money.” So we take a nibble at that bait on the string. She reels us in a little more by saying “I can also get you a piggy bank second on your house so you can do the backyard and pay down your credit cards” So then we bite harder on that bait.

She reels us in more by saying we could save close to 900 a month on our mortgage payment. Done. She’s got us. Money talks. And when money talks savings, we listen. So we got taken hook, line and sinker.

We sign. We are excited, we are getting lower payments AND the possibility of paying off our credit cards, landscaping the backyard and changing the front. WOOHOO!!! Things are looking up. That was June. By the 2nd week of July, we had not heard about the “piggy” back she was going to do for us. We call and leave a message. A day or two later, she calls and tells us the first bank went outta business and so she has to try a different bank. Says it will be a week or two.

We wait a week or two and hear nothing. We call again. A few days later, she calls back, says it’s going great, nothing to worry about, etc etc. We wait and we wait. July ends and August comes and goes. September comes and we are impatient. It’s been 3 months since we refi’d into the lower payment mortgage, we want that 2nd so we can take care of business.

We call her. She says the bank won’t take my mom’s retirement check as income. WTF is that? They financed the house twice for mom and I …. BOTH TIMES WITH HER RETIREMENT INCOME. Cunt tells me she worked her ass off to get us this loan, I just mumble something incoherent and then we end the conversation with her saying she’ll contact us in 6 months or so and we can try for that 2nd again.

Right. Like I’ll want to work with that cunt again.

So mom gets curious about our loan and starts looking at our statements and the like (this, after reading MSN.com Money and the like). She finds on our statement that we are accruing negative amoritization. WTF? She shows it to me, I look at it and sure as shit, right there, we are accruing $800+ in NI each month. WHAT THE FUCK IS THIS!

We made an appointment with a Wells Fargo person to go over everything. We find out during this appointment just how bad our situation is and how bad Cuntface screwed us. Interest rates going up every month. Minimum payment doesn’t even get close to the “interest” only payment amount (that’s where the NI is coming from). We currently owe more on the house than we did when we re-fi’d it.

And then we find out in order to refi it now to get out of the situation, there is a HUGE HUGE HUGE HUGE prepayment penalty. Just. fucking. great. We’d got a few people looking into things, looking at our options. Worse case scenario? We end up selling the house and moving into a rental for a few years.

So, I’d like to dedicate this week’s Fuck Off and Die Thursday to those mortgage brokers out there who don’t give a fuck about the consumer (we know who they are). To those cunts who take advantage of people who are naive and not properly informed of the situations they are getting themselves into until it’s too late. What comes around goes around and eventually that shit will come back and bite you in the ass, one way or another. I hope I’m there to watch.

TO THE CUNT WHO DID THIS TO ME AND MY MOTHER….FUCK OFF AND DIE. I HOPE YOU ROT IN HELL.

Sunset off the deck of the Norwegian Wind April 2005

I found this article on MSN.com today and I found it interesting (to say the least). Anyone who has read my blog the last few weeks will understand why I found it so interesting. I’m posting the article in full so that if any of my readers do NOT read MSN.com….

The mortgage party of 2003-06 is so, so over.

Darci Rickson now wishes that she’d looked closer at the fine print. So do Norman and Margaret Paige. And doubtless thousands of others — soon to be millions — whose cheap, fixed-rate introductory periods are about to expire.

The owners of about 7.7 million adjustable-rate loans taken out in 2004 and 2005 — about $1.89 trillion worth — face higher house payments in the next two to three years, says Christopher Cagan, the research director for First American Real Estate Solutions of Santa Ana, Calif. That’s about a fifth of all mortgages outstanding in the U.S. right now.

These are not traditional mortgages. Rather, they are complicated, sometimes bafflingly intricate contracts loaded with changing rates and back-end details that trip up unsophisticated borrowers. One category, subprime loans, is aimed at the poor, minorities and people with bad credit — in other words, those who can’t, or think they can’t, get a loan by other means.

Jordan Ash, the director of community activist group ACORN’s Financial Justice Center in Minneapolis, blames the mortgage industry for aggressively marketing expensive loans that only the savviest consumers can understand to people with little money and flawed credit. “In the mortgage world, it’s not a competition of who can give you the best rate — they’re all offering basically the same loans,” Ash says. “It’s who gets to you first and reels you in first. It’s who has the best sales pitch.”

The plain old adjustable-rate mortgage spells trouble enough. But three high-risk loans are causing most of the trouble:

Teaser ARM. This loan features an alluring initial period of very low interest, around 1% to 2%, which later resets to market rates. About 1.4 million borrowers will be jolted back to reality in the next two to three years as their introductory periods expire. Payments on a $200,000 loan at 2% are about $725 a month; at 7%, they’re $1,340.

Subprime ARM. Nearly half of loans due to reset are aimed at low-income people, minorities and people with bad credit — folks who can’t or just assume they can’t get a bank loan at a reasonable rate. Many are in a shaky financial position to begin with and so are in greater danger of defaulting. Subprime (also called nonprime) ARMs start high — 7% or more — and go higher. And higher. They often feature a fixed, lower-rate introductory period. But when that ends, it’s “just the old-fashioned squeezarooni,” Cagan says.

Option ARM. This is the real killer. It gives homeowners the choice each month of paying the principal and interest, just the interest or an even-smaller minimum amount. Every month you pay the minimum, you’re deeper and deeper in the red. And up to 80% of option-ARM buyers pay only the minimum, according to Fitch Ratings. Because the minimum payment doesn’t cover the monthly interest, the deferred interest is added to the loan balance. After the loan balance grows to a certain point, the lender will demand that you start paying the full principal and interest — on your now-bigger loan.

There are 400-odd varieties of mortgages, and some combine several nasty features in a single loan. One example: On a five-year teaser loan for $200,000 — one with a 1.25% introductory rate, 7.414% fully indexed rate with a 2.75% margin and a 7.5% payment cap, if you’re keeping score — a homeowner could make minimum payments that rose from about $670 to $770 over the fixed term. At the end of five years, deferred interest would have inflated the balance on the loan to nearly $220,000. The new monthly payment, one that paid back all the interest plus the principal? About $1,600. Is there any wonder why buyers are confused?

“The products are getting more and more complicated, and it’s harder and harder to understand them and make an informed choice,” Ash says. “Lots of people did not know what they were buying. I had one person who came and said, ‘I make my payment I every month, and every month my loan goes up. How can that be possible?’”

How could things be worse? Easy: Many of these loans also have prepayment penalties, so you’re nailed with fat fees if you try to refinance or pay off the balance early.

Cagan, who conducted a February 2006 study, “Mortgage Payment Reset: The Rumor and the Reality,” predicts that the U.S. will weather this mortgage problem, but he’s not saying it’ll be easy. It’s a bump, not a catastrophe, for the economy, he says.

The story of a home
So far, just the homeowners who bought these cheap loans early, or whose introductory periods were short, have been hit. “We haven’t had a lot of people lose their houses to reset yet. That’s proof it hasn’t really bit yet,” Cagan says.

But Norman Paige knows better: He and his wife, Margaret, have seen their mortgage payment go from $729 a month — at a fixed rate of 7% in 2003 — to $956 a month today, after their fixed-rate period ended in 2005.

The Paiges bought their home in 1974 with a government-assisted loan for veterans. They reared three children there and over the years refinanced it three times to pay for repairs and upgrades. Paige has lost track of how much equity they have in the house.

The Cleveland-area residents recently filed for bankruptcy and relinquished a rental house to foreclosure, so Paige doubts he could refinance again. “There’s nothing I can do now,” he says, but devote more of their $4,200 monthly fixed income to housing and be grateful that his pension is a good one. He is kicking himself: “I just got messed up. You want to get mad, but you can’t get mad at nobody but yourself.”

Foreclosures in the U.S. jumped 24% from July to August. The 115,000 foreclosure filings in August were “the biggest spike we’ve had all year” — a 53% increase in foreclosures from August 2005, says Rick Sharga of RealtyTrac, an online foreclosure marketplace. “The fact is, we’ve never had this many of this type of loan mature all at the same time, so there really is not a precedent for this.”

Who’s most in danger?
People who borrowed before 2003 are safest from the mortgage-reset problem, Cagan says, because they probably have built up equity that will help them refinance or, at worst, sell without losing money — unless they are in a stalled real-estate market, that is.

But those with no equity are in riskier terrain. It’s the people without equity who are in trouble: “You get into the situation where you can’t sell, can’t refinance, can’t negotiate,” Cagan says.

In 2005, he says, 29% of mortgage holders had no equity or, because of borrowing, owed more than their houses were worth, a situation known as negative equity. Nearly 11% of those with negative equity were down 15% or more below their home’s value.

The Paiges did their borrowing from finance companies, whose higher-price loans target the subprime market — those borrowers with less-than-sterling credit. But in the beginning, could not this career government worker with a working spouse have qualified for a bank loan at an affordable rate? “I never really thought about going to the bank, to be honest,” he says.

Paige, like many who bought subprime or teaser mortgages, says he did not fully understand what he was buying. ACORN, the Association of Community Organizations for Reform Now, studied the problem (“The Impending Rate Shock: A study of home mortgages in 130 American Cities”) and concluded: “America’s lower income and minority communities receive a disproportionate number of subprime loans and thus are most at risk of increased defaults and foreclosures.” Irrespective of income, minority homeowners “are often steered into ARMs without being given a choice and have little knowledge of how ARMs work or the risks associated with these loans,” the ACORN study says.

ARMs and their risky cousins
Darci and Jim Rickson can say just how tough things can become for borrowers with subprime loans. Darci, 35, and Jim, 37, were “just a young married couple” three years ago when they came into a $10,000 inheritance. As she recounts it, their credit “wasn’t the best.” She’d finished a repayment program the previous year to retire $15,000 in credit card debt. He simply had no credit. Still, “interest rates were low, and everyone — our parents, friends of the family — were telling us to buy instead of rent.”

With the inheritance for a down payment, they bought a three-bedroom, two-bath house in Topeka, Kan., for $92,000. Banks wouldn’t pre-approve them, but they found a mortgage broker to work with. They bought an ARM. “At first, I thought she was going to get us 7% or 7.5% — almost 8%. And then when we went to sign the papers, it was 9.75%,” Darci Rickson says. “It was, oh, she couldn’t get that one, she could only get this one. I didn’t know enough to look around.”

ARMs have been around for decades, but as recently as 1999, just half of subprime mortgages were ARMs. Now, however, ARMs — though roughly a quarter of all U.S. mortgages — account for three-quarters of subprime loans, according to the ACORN study.

ARMs became popular in the housing boom partly because borrowers can use them to qualify to buy more house than they otherwise could, thanks to ARMs’ initial payments that are lower than those of fixed-rate loans.

A disproportionate number of ARMs now are sliding into foreclosure, says RealtyTrac’s Sharga. He says his company has begun a nationwide analysis of foreclosures by looking at Cook County, Ill., which includes Chicago. There, “about 57% of the foreclosure properties were on some sort of adjustable-rate mortgage,” Sharga says. “If that’s any indicator, it suggests we could be in for a rough ride for the next couple years.”

At first, the Ricksons’ ARM, with its $829 payment, seemed affordable. Jim Rickson is a carpenter, and Darci Rickson was a stay-at-home mother with two preschoolers. After the two-year introductory period expired, the Ricksons figured, they’d refinance into a lower rate. The important thing was to get a toehold in the housing market.

The 14.75% mortgage
Adjustable-rate loans frequently are marketed with the idea that the homeowner can use the introductory period to improve bad credit, then refinance the home into a fixed-rate mortgage when it ends. But as the Ricksons discovered, trouble can throw that plan into chaos for families without a fat emergency account.

Jim Rickson lost his job, and the couple fell behind on the mortgage. Their broker called two years later, as promised, to discuss refinancing, but by then their credit was shot. They are now stuck with the ARM, which left its two-year fixed-rate period and is rising every six months. In June, it went to 14.75% interest — $1,162 a month.

Such loans can work for some savvy buyers intending to hold a house for a short time, then sell it, or for people who will make substantially more money in a couple of years. Attentive, sophisticated consumers can enjoy the low rate, then refinance into a fixed mortgage. But it’s a gamble. When introductory periods end, the adjustable rate is tied to the prevailing cost of money — and more. If you’re a law student who is soon to graduate into a fat salary, good for you. But if you stretched your income to the max to afford the introductory payment, you’ll be in deep water.

“If you are paying 30% of your income just for the minimum (payment), and it doubles, it’s pretty obvious that a family can’t pay about 60% of their income on housing,” Cagan says.

Six months behind on the mortgage and faced with foreclosure, the Ricksons filed for Chapter 13 bankruptcy in 2006. Now, Jim is back to work, but it’s a fragile time. “If we miss a payment, within 15 days, they’re taking our house,” Darci says. The goal is to make 12 consecutive payments on time, after which they intend to ask the court to release the house from the bankruptcy so that they can try to qualify for a new, lower-cost loan.

To deal with the higher payments, Darci found a half-time job she can do nights and weekends. She trades with other mothers for hand-me-downs rather than buying new clothes for her kids. Instead of salon haircuts, a friend cuts her hair. The Ricksons cook at home more, and, if they eat out, it’s from the McDonald’s dollar menu.

“When we bought this house, we didn’t have student loans, we didn’t have credit-card debt, we saved our money, we figured out what we could pay. Now, here we are — we’re scrambling,” Darci Rickson says. The couple is on track, though: “We’ve made five months in a row. We just need to get seven more, and yet the interest is going to go up again in January.”

If your payment jumps
Here’s what to do if you’re caught in the trap:

Move quickly to refinance. If you’ve got the credit needed to refinance, this is an excellent time for it: Rates are historically low in general, and they’ve dropped a half-point since a recent peak to 6.31%, according to Freddie Mac’s Primary Mortgage Market Survey. The low point was 5.23% in June 2003, but mortgage rates have bounced around plenty since they began dropping from 7% in early 2002.

Act now. It’s emotionally difficult to act when you’re in a financial hole, but the sooner it’s done, the smaller the damage. Plus you’ll feel better when you start working on the problem.
Start by calling your mortgage lender to learn their offerings. Mortgage retailers currently are eager to refinance adjustable mortgages into fixed loans.

Don’t stop there. Don’t assume you can’t get a better rate. Call lots of banks and mortgage brokers to learn all your choices.

Admit defeat. If you are simply over your head in your mortgage, read “Facing foreclosure? 9 options” to learn what possibilities are open to you.

Learn a little. You don’t need to get a college degree in mortgage finance to pick up some consumer smarts in this area, but taking out a mortgage does require your attention. Start here and here and keep searching and learning.

Get help in this tough, complicated world. Find a trustworthy, nonprofit credit-counseling agency near you here. For fellowship and a shoulder to cry on, consider talking it over with other MSN Money readers at the Your Money message board.

Marilyn Lewis is a free-lance writer based in Western Washington