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May. 13th, 2005 11:52 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
which_chickFinance, finance, finance. Today's topics: Sheriff Sale of Property, Creative Mortgage Products, and how Chase Freedom Mastercard is enhancing my rewards program!!
I went to the sheriff sale today. There were two properties for sale. The first was at 126 N. Spring Street in Everett. It's a three-story frame victorian house, in town, with some issues (leaking roof, 60-amp electrical service, illegal apartments on 2nd and 3rd floors). It sold at sheriff sale a year ago (7-30-04) for 50,000 or so. There were two bidders for this property. One of the bidders was Jeffrey S. Appel, owner or reputed owner. The other bidder was some attorney type acting on behalf of National City Mortgage Company, the plaintiff. Bidding went to $50,100 and the property was "bought" by the National City Mortgage Company. Now, the property currently has an outstanding mortgage (with the aforementioned bank) against it for $72,000 as well as liens for roughly the same amount. It's basically 140K in debt... and it isn't worth that.
The bank bought the house back because it wasn't going to bring enough at the sale to recoup them for what they had in it. The bank apparently thinks that the house is worth fifty thousand, one hundred dollars. Unfortunately, nobody at the sale agreed with them. Sucks to be the bank.
The other house for sale was at 643 N. Spring Street in Everett. It's a two or three bedroom house (you can't get in to inspect these properties. The best you can do is peer through the windows. There aren't tours or anything.) a bit up the road from the first house. It's also got city water and sewer and it's in rather better shape than the first house as well as being smaller and more sensibly sized for renting. There is a judgment against the house for $106,000. It's probably worth 55K, maybe 60K if the inside isn't horribly fucked. There were two bidders on the property, one of them GMAC Mortgage Company (Plaintiffs). At the close of bidding, the mortgage company "bought" the building for $20,001... they're in roughly the same shitty situation as the first bank. They apparently think the house is worth more than twenty thousand dollars but nobody at the sale agreed with them.
Interestingly, Mike Mortimer was at the sheriff sale and he allowed as how the people who owned the property in between 649 N. Spring and 629 N. Spring might have settled on an owner and might be willing to talk about selling the property to us. We've tried, in the past, to purchase that house because it's a hellhole and it's right next to a property we own, but the heirs were unable to agree on things and refused to sell their extremely valuable house back when it might have been worth something. The house, never all that impressive, has declined substantially during the twenty years it was empty, and it's about worthless now. They should have taken the money when they had the chance. Advice to all potential property heirs: Sell the house while it's still sellable. If you can't agree on who gets the money from the sale, do not let that stop you from selling. Sell and then put the money in a CD while you fight over who gets it... at least that way you won't fritter away everything.
And that was the sheriff sale.
Creative mortgage products were mentioned in the satiric piece I linked to the other day. These are real mortgage products... zero-percent (no down payment) mortgages, interest-only mortgages, negative amortization, and mortgages written for greater than 100% of the value of the home. Now, math is hard, but these are some serious crack-smoking financial instruments if I ever saw them... all of them designed to get people who lack solid financials into mortgages.
Can't afford a down payment? Try a Zero-Down mortgage! Of course, you'll be paying a slightly higher interest rate and PMI because you don't have a down payment, but that'll be okay.
Can't afford the cost of a 30-year amortizing mortgage? Try an Interest-Only mortgage. You won't be paying down the principle at all, but you'll have lower payments. That's good, right?
Can't afford even the interest on your low ARM mortgage? Sign up for one that allows negative amortization at a payment rate below the actual interest rate. That way, if interest rates rise, you can OWE MORE MONEY while continuing to make the same low payments... at least to a point. Most Neg. Am. loans cap the amount of debt you can incur to 125% of the loan's initial value.
Can't afford a home because you have too much other debt? Get a loan for more than the value of the property and pay off your other debt with the extra money.
Honestly, people. Get a fixed rate, 30-year fully amortizing home mortgage and put 20% of the purchase price down. Anything else is bullshit.
Chase Freedom Mastercard is my credit card. On the whole, I'm happy with them. However, today they sent me a mailing that struck me as particularly chuckle-worthy.
Dear account holder,
We're pleased to tell you about an exciting change coming soon to the rewards associated with your Chase Freedom credit card account. These changes will be effective on July 25, 2005.
A summary of the benefits and changes to your account include (sic -- this should read "includes". The deep structure is "A summary [adjectival prepositional phrases] includes...") the following:
- There is no change to your annual program fee.
- Reward dollars earned after July 2005 will expire six months after the date they are earned. Reward dollars earned prior to July 2005 will expire in January 2006.
-There is a $500 monthly limit on the gasoline purchases earning reward dollars.
-For all other purchase made using your card, there is no annual or monthly maximum reward dollar accumulation.
(blah blah blah)
Sincerely, Cardmember Service
Let's read for meaning. A summary of the benefits and changes, you say? And the first thing you give me is "There is no change to your annual program fee." Right. So is that a benefit or a change? It's not a change, so I guess it must be a benefit. Yippee.
My reward dollars now expire in six months? That's definitely a change. I'm not sure it's a benefit.
I can only get credit for five hundred dollars of gasoline purchases per month? So... were some businesses buying too much gasoline so that ya'll had to pay out more rebates than you were expecting? It's only five percent on gasoline purchases. How bad can it be? I guess this is a change because it's not a benefit.
And other purchases still follow the same rules as before. That's not a change, so it must be a benefit.
Er. Right, then. I can see why you listed the benefits and the changes seperately. Ain't no overlap happening there. This word enhance, I do not think that it means what you think it means...
I went to the sheriff sale today. There were two properties for sale. The first was at 126 N. Spring Street in Everett. It's a three-story frame victorian house, in town, with some issues (leaking roof, 60-amp electrical service, illegal apartments on 2nd and 3rd floors). It sold at sheriff sale a year ago (7-30-04) for 50,000 or so. There were two bidders for this property. One of the bidders was Jeffrey S. Appel, owner or reputed owner. The other bidder was some attorney type acting on behalf of National City Mortgage Company, the plaintiff. Bidding went to $50,100 and the property was "bought" by the National City Mortgage Company. Now, the property currently has an outstanding mortgage (with the aforementioned bank) against it for $72,000 as well as liens for roughly the same amount. It's basically 140K in debt... and it isn't worth that.
The bank bought the house back because it wasn't going to bring enough at the sale to recoup them for what they had in it. The bank apparently thinks that the house is worth fifty thousand, one hundred dollars. Unfortunately, nobody at the sale agreed with them. Sucks to be the bank.
The other house for sale was at 643 N. Spring Street in Everett. It's a two or three bedroom house (you can't get in to inspect these properties. The best you can do is peer through the windows. There aren't tours or anything.) a bit up the road from the first house. It's also got city water and sewer and it's in rather better shape than the first house as well as being smaller and more sensibly sized for renting. There is a judgment against the house for $106,000. It's probably worth 55K, maybe 60K if the inside isn't horribly fucked. There were two bidders on the property, one of them GMAC Mortgage Company (Plaintiffs). At the close of bidding, the mortgage company "bought" the building for $20,001... they're in roughly the same shitty situation as the first bank. They apparently think the house is worth more than twenty thousand dollars but nobody at the sale agreed with them.
Interestingly, Mike Mortimer was at the sheriff sale and he allowed as how the people who owned the property in between 649 N. Spring and 629 N. Spring might have settled on an owner and might be willing to talk about selling the property to us. We've tried, in the past, to purchase that house because it's a hellhole and it's right next to a property we own, but the heirs were unable to agree on things and refused to sell their extremely valuable house back when it might have been worth something. The house, never all that impressive, has declined substantially during the twenty years it was empty, and it's about worthless now. They should have taken the money when they had the chance. Advice to all potential property heirs: Sell the house while it's still sellable. If you can't agree on who gets the money from the sale, do not let that stop you from selling. Sell and then put the money in a CD while you fight over who gets it... at least that way you won't fritter away everything.
And that was the sheriff sale.
Creative mortgage products were mentioned in the satiric piece I linked to the other day. These are real mortgage products... zero-percent (no down payment) mortgages, interest-only mortgages, negative amortization, and mortgages written for greater than 100% of the value of the home. Now, math is hard, but these are some serious crack-smoking financial instruments if I ever saw them... all of them designed to get people who lack solid financials into mortgages.
Can't afford a down payment? Try a Zero-Down mortgage! Of course, you'll be paying a slightly higher interest rate and PMI because you don't have a down payment, but that'll be okay.
Can't afford the cost of a 30-year amortizing mortgage? Try an Interest-Only mortgage. You won't be paying down the principle at all, but you'll have lower payments. That's good, right?
Can't afford even the interest on your low ARM mortgage? Sign up for one that allows negative amortization at a payment rate below the actual interest rate. That way, if interest rates rise, you can OWE MORE MONEY while continuing to make the same low payments... at least to a point. Most Neg. Am. loans cap the amount of debt you can incur to 125% of the loan's initial value.
Can't afford a home because you have too much other debt? Get a loan for more than the value of the property and pay off your other debt with the extra money.
Honestly, people. Get a fixed rate, 30-year fully amortizing home mortgage and put 20% of the purchase price down. Anything else is bullshit.
Chase Freedom Mastercard is my credit card. On the whole, I'm happy with them. However, today they sent me a mailing that struck me as particularly chuckle-worthy.
Dear account holder,
We're pleased to tell you about an exciting change coming soon to the rewards associated with your Chase Freedom credit card account. These changes will be effective on July 25, 2005.
A summary of the benefits and changes to your account include (sic -- this should read "includes". The deep structure is "A summary [adjectival prepositional phrases] includes...") the following:
- There is no change to your annual program fee.
- Reward dollars earned after July 2005 will expire six months after the date they are earned. Reward dollars earned prior to July 2005 will expire in January 2006.
-There is a $500 monthly limit on the gasoline purchases earning reward dollars.
-For all other purchase made using your card, there is no annual or monthly maximum reward dollar accumulation.
(blah blah blah)
Sincerely, Cardmember Service
Let's read for meaning. A summary of the benefits and changes, you say? And the first thing you give me is "There is no change to your annual program fee." Right. So is that a benefit or a change? It's not a change, so I guess it must be a benefit. Yippee.
My reward dollars now expire in six months? That's definitely a change. I'm not sure it's a benefit.
I can only get credit for five hundred dollars of gasoline purchases per month? So... were some businesses buying too much gasoline so that ya'll had to pay out more rebates than you were expecting? It's only five percent on gasoline purchases. How bad can it be? I guess this is a change because it's not a benefit.
And other purchases still follow the same rules as before. That's not a change, so it must be a benefit.
Er. Right, then. I can see why you listed the benefits and the changes seperately. Ain't no overlap happening there. This word enhance, I do not think that it means what you think it means...
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Date: 2005-05-13 08:13 pm (UTC)no subject
Date: 2005-05-13 10:40 pm (UTC)I also currently read a fair amount about finance, monetary policy, interest rates, and the housing market because these are things that interest me. Since you've friended, you will be exposed to the stuff on that front that I find interesting, amusing, or otherwise remarkable. It's not all I talk about, but it is something I follow with a certain amount of attention.
Also, I'm having fun with weird-ass mortgage products partly because they are not only silly as hell but also a worrisome indicator of how overheated and bubble-like the current real estate market is. See, all the credit-worthy people already have solid, fixed-rate mortgages locked into the forty-year low rates we're having along about now. Now they're just looking for people who can fog a mirror... and that's definitely cause for concern. For more reading along these lines, take a look at the delightful and always entertaining thehousingbubble (http://www.thehousingbubble.blogspot.com), a blog of distinction on such matters.
If you'd like fairly quick and easy financial fu, spend some quality time at bankrate.com (http://www.bankrate.com)... they do pretty good (but sometimes less conservative than I'm comfortable with) explanations of most consumer finance stuff. Their fed coverage (for interest rates, among other things) is also pretty good.