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"loan" Category

Was It Us?

Tuesday, July 15, 2008

Our home loan was acquired from IndyMac bank in late May. On July 2nd, IndyMac sold our loan off to Chase Bank. Days later, on July 12th IndyMac fell under receivership of the FDIC. In other words they went belly up. Sometime in June, Senator Charles Schumer wrote a public letter criticizing the risky lending standards of said institution, prompting a run on the bank over the next week amounting to about 1.3 billion dollars. Whoops. I feel a small amount of pride in knowing that somehow my risky lifestyle, my cavalier approach to personal finance, has brought a goliath to its knees. Yes, it’s loans to people like me, freelance people, stated income people, people of negligible net worth, that has thrown a pebble into the massive machinery of the American mortgage securities industry. It has nothing to do with expert financiers over-leveraging their assets nor the pliant Fed liberally them bailing out when the margin calls come. Read all about the IndyMac failure in this NY Times article.

Superstition is Weirdly Alive

Sunday, June 1, 2008

Well folks, Kari and I are now residents of Santa Cruz. We’re Cruzers. We’re gonna start wearing matching aloha shirts and stuff. Things came together for us in such a neat way that we began to have superstitious inklings. First: As we were packing the truck in San Francisco with our precious and incalculably worthy possessions, a bike messenger rolled up with an urgent document. I was instructed to sign it and hand it back to him, who would ensure its timely return to the sender – Old Republic Title Company. It was the last, thinnest barrier between me and the loan money. The title company called an half hour later and said that they processed the paperwork and that the money would be transferred that day. The day we arrived in Santa Cruz was the day our loan finally came through. 

Did I mention how hard it was to get that loan? It seemed like every day there would be an article in The New York Times (heretofore referred to as NYT) saying stuff like: “A loss of confidence among lenders has also put a damper on sales, as even Americans eager to buy a home are having difficulty procuring mortgages from lenders who have tightened their standards.” (from a May 24, 2008 article detailing the current condition of the housing slump). This was not good news. And now that I have the loan and I’m not afraid to jinx myself, I can finally say that DAMN I was worried about not getting that loan! That being said, it wasn’t like I wasn’t vetted. I submitted tax records, bank statements, client invoices, six forms of photo identification, my library card and toe prints to the loan broker. The property value-to-loan ratio is 0.3 – which means that if I take the money to Vegas and blow it all on coke and roulette the bank can sell my house for three times the value of the loan. Seemed like a pretty good deal for the bank, but apparently they and their investors did not concur. So along with the inquisition-inspired vetting process, there was also the matter of me being utterly clueless. Like the time I made an appointment to sign the loan papers and the notary reminded me to bring photo id and proof of home insurance. Doh! Home insurance – I need that? So I got on the phone and miraculously had my paperwork in hand the next morning. Another crisis averted and all thanks to Tina Andreatta at Farmer’s Insurance. Then, at the signing of documents, they asked me where I wanted the money transferred to. Doh! I guess I never really imagined actually being in control of that much cash. So I opened up an ING account on friday and waited anxiously for that paperwork to go through in time to accept the cash. That account opened and was verified the morning that the cash was finally transferred. 

In the end, or in the interim at least, I’m happy to say that things have gone very smoothly for us. We found parking for our big moving truck right in front of our old house and managed to avoid a parking ticket on street sweeping day. We found an awesome dude named Juan Sanchez from Chiapas, Mexico to help us load up the truck. Everything just barely fit in the truck, but it fit. We got a good deal on a storage space in Watsonville. When we returned the truck, we returned it exactly on the minute it was due – apparently a first at the rental place. 

Perhaps one of the most important and most beneficial things to happen to us is that Scott’s parents, Bert and Shauna, offered to let us live in their in-law for the duration of the project. I can’t say enough complimentary things about those two. They’ve been extremely supportive and have inspired us from the get-go with their positive attitudes and generous spirits. We look forward to relying on their wisdom and support for the coming year and hope that we can, in some way make their lives better, in return. 

I’m not superstitious, but some mystical force is telling me that we are doing the right thing with this project. I don’t expect it, but I hope to continue reporting smooth seas and compliant planning department officials for many months to come.

The Man Approves

Tuesday, May 6, 2008

Just got word from our mortgage broker that our appraisal has been okay’d. That was the last hurdle between us and our loan. Apparently our appraisal was a little too optimistic considering the photos of the place. The underwriter took a deeper look and apparently judged that the value was indeed there. I guess that means that a total dump in Capitola is worth more than a five-bedroom ranch palace in Topeka. 

There have been a few times in my life where I’ve felt relief like this. Like passing the writing test to get in to grad school. It’s one of those things where a lot rides on one technicality, and even though I know that we’re gonna do good if we just get the chance, we can still get the thumbs down with little recourse. Kari has already given notice at her job; we told our landlord that we’d be out of our apartment by June 1; I’ve been slowly weening my clients off Western Freight. These are big moves for people that would be left in a major lurch without that loan money to build a house with. So, in a word, WHEW!


Monday, April 28, 2008

I’m chomping at the bit to get started on the house. I’ll be there May 1st (this Thursday) ripping out sections of the wall to see what condition the house is in. My very first permit is in my hand and allows me to do “investigative demolition” to determine the current condition of the structure and foundation. Seems weird that you’d need a permit to poke holes in your own wall. I mean, think about all the angry boyfriends who punch holes in their walls in fits of relationship stress. That’s $47.50 per jab, fellas.  

Word on the street (wall street, that is) is that we’ll get word on the loan tomorrow. This is really the big go or no-go moment. If the loan comes thru, then things will kick into really high gear. So far we’ve talked to the planning department in Capitola and they’ve given us good feedback about our plans. Now I need to draw up site, floor and landscaping plans to get the ball rolling on approval for the front addition. Additionally I need to draw up really detailed plans for the existing site modifications that we want to do. Those should get approved very quickly. The addition could take up to a six weeks to get approved. Kari and I are franticly working on different floor plans (I’ll post the finalists soon) but we need to dig into the walls and down to the foundation to check the current condition of the bones. That will determine how much gutting and replacement we’ll need to do. Reggie, aka The Pundit, our awesome contractor and quickly emerging friend, and all around nice guy, says that we’ll probably need to shore up the foundation around the perimeter in order to hold up the new roof. We may not absolutely need it, but it seems like the right thing to do for the long-term.

The Bad News Is…

Monday, April 28, 2008

The bad news is that housing prices are dropping like crazy. The bubble has burst and California housing prices are down 31 percent since their peak in April of 2007. The good news is that housing prices in Santa Cruz county are the fourth highest in twenty regions, behind South Santa Barbara, Santa Clara, and San Francisco Bay Area. Santa Cruz has also suffered the third smallest decline behind Santa Clara and the bay area. That tells me that state-wide, Santa Cruz is a desirable place to live. I hate to sound optimistic in this increasingly pessimistic landscape, but, well, I am. I don’t expect housing values to start climbing anytime soon, and I’m sure they’ll continue to fall as the shock wave of the credit crunch continues to propagate, but I think that of all places, Santa Cruz will be one of those more mildly shaken.

Speaking of pessimism, check out this link, where I found my data:

C.A.R. Median Home Prices Down 29% In March