Frannie and Freddie, just two crazy kids

Just before the housing collapse I started selling mortgages. The prime was around four and if you had “excellent” credit and a job you could get the best rate. The office was like a setting in a John Steinbeck story. It was seedy in that it was so undernourished. The only computer was on the “boss’” desk which when he finally strolled in, mid-morning, he would spend rest of the time till lunch greedily gawking porn sites. If we wanted to check someone’s credit rating, we waited till he was off. I’m pretty sure he was in the witness protection program because he did very little in the way of sales and his piece of what we did would barely keep his Harley in gas.

I was encouraged to bring in whatever business was out there and when ever I did latch on to something I was told “we don’t do that, yet.” One of them was a reverse mortgage for a friend of mine which even though it finally went through, the jagoff company never paid me for it. Then I went to work for the subsidiary of IndyMac that was pushing these things. IndyMac, 10th largest bank in CA, just shut their doors.

The concept is basic biz: if you can afford it you can have it. But as Jon Stewart said last night to some twit who had written a book about it, “So if I can’t afford it, you’ll still give it to me but just charge me more.” Laughs from the audience, a look of bewilderment from the expert.

What is unclear to me is why the mortgage bankers would loan money to losers. Not just the guy who wants to put a trailer he has been given on wetlands that his father-in-law sold him for $25K, but our little company in general. I remember Billy who had been in car sales talking on the phone to customer while emitting an occasional glorp of goo from his mouth into a coffee cup. Paul wanted me to help him sell modular homes but the only mortgage he sold while I was there was to his father. John had the most sales because he had seniority and would cherry pick the lists to cold call so that the rest of us would be calling people who had just refinanced, sometimes not even six months before.

If this company could get qualified to sell mortgages, it is absolutely no wonder that the system was and is chock a block with avaricious arseholes who’d figured a way to scam whoever came along. And then the guys just above us were in it so that they could bundle these sales and pass them on until Japan ends up with them.

So what happens when Schmucko goes away to the county lock up for a few months leaving his pregnant bride with the kids, and no car to get to a job? He defaults. Now my old company does not say “Schmuckey, we might have over extended you a tad and rates are still low, how about you give us a little less for the next few years till this thing blows over.” They don’t say that because they can’t. They’re not holding. And who is holding is who gets stuck when the payments stop coming in. Screw them. But apparently not. The government finds some way to help out the big shots at Fannie and Freddie, but the Schmuckster loses his house and any credit he might have had. Why not have the bailout for the little guy who can then keep making his payments and the money continues to go up the food chain? I’m just sayin’.