Flutterby™! : Greenspan unspun 2007-09-04 18:09:49.177804+00

Greenspan unspun

2007-09-04 18:09:49.177804+00 by ebradway 2 comments

F@st Company has a redux piece "peeling the layers on Alan Greenspan's real contribution to the economy". My loose interpretations:

Sub-Prime Mortgages are his fault
He accurately predicted the market and provided good controls...but...
He would his predictions public in only vague terms

As I read the little piece, especially as I got to the end about "ignoring the risky disclaimers right in front of us", I thought: this person has never closed on a mortgage and dealt with the hundreds of pages of legalese.

#Comment Re: made: 2007-09-04 19:13:56.266576+00 by: Mark A. Hershberger

I made the mistake of going to a mortgage broker for my current mortgage. I made another mistake by not reading the details of the mortgage immediately.

Thankfully, my bout with stupidity lessened enough so that I noticed they were giving us a 10 year interest-only mortgage with a balloon payment. I don't know why they thought I wanted that.

I've had three mortgages so far in my life - all on the same property. The first was FHA insured and took amazing feats of endurance on my part and the sellers' part. And even though it was FHA, my mortgage company never bothered to lock in the rates. So, in early 1994 I ended up with 8% instead of the 7.5% I would have had if I were locked-in.

The second mortgage was a re-fi through "The Money Store" - that early source of sub-prime loans. I was referred to them by one of those sites that supposedly "let lends bid for your business". Everything was real smooth - until the last minute when I found that they had added in life insurance (tacking $2500 onto the principle of the mortgage for $110K of term-life for five years- UGH!). When I called to complain they told me that the interest rate I was promised was going to go up and that I should have been offered that rate... yadayadayada... Ironically, all I had to do was stick by my guns and they begrudgingly gave me the promised rate. Of course, I'm sure many folks would have missed the insurance thing or just caved about the rate.

The third mortgage was a re-fi through a broker after my divorce. The broker helped alot in my case because my finances were a little messy. But it was a traditional, fixed-rate loan just with a high (11%) rate.

The paperwork on a mortgage is a nightmare. You get cramps from signing and initialing. If you were to read every page, it'd likely take a year to get through it all.

BTW, a professional surveyor once told me that you can usually avoid the fees paid to a title insurance company. If you research the title yourself at the court house for the historical info and you can pay a professional surveyor to delineate the property. What you are mostly paying for with the title insurance is the surveyor's mark on the record.

And that mark really just serves as a connection to the surveyor's insurance so if there is a dispute over property lines, someone else pays. The mark has nothing to do with the accuracy of the lines.