Tuesday, April 22, 2008

Sign Of The Times

I am home today here in the People's Republic of Hillcrest awaiting the arrival of the good folks from Arnold's Floor America to get here to install my new floor in the master bathroom. My floor was damaged when the seal at the base of the toilet broke which caused a leak to get out. Although it is a 2500 buck job tops, I made a claim on my insurance mainly because I have a bunch of other projects I want done which will cause many draws on the dwindling funds of the bank of tmfw. I can limit the hit here to the deductible.

Anyway, I was surprised when the man from Arnold's required me to sign a document that said that I acknowledged that the lien of the mortgage attached to the insurance proceeds that would be paid. While I am always willing to sign anything that is legally superfluous (the acknowledgement is mortgage law 101) I was surprised to have to sign such a doc on a job as small as this.

It was explained to me that the mortgage and insurance companies had tightened up after Katrina. Apparently, a not inconsiderable number of folks got their checks and just walked away from their damaged homes, leaving the lender to foreclose on property that had been rendered valueless after the storm.

"Sign of the times," the man said.

I note in today's paper that @6500 homes are unsold in the Northwest Arkansas area. This is where all the money is in the State. This is where all the rich white folks live. They can't give these damn houses away.

Things aren't too bad around here. Values are relatively stable and houses are selling. And people are still getting loans to do crazy things. There's a guy who bought a big two story house not too far from here that he is turning into apartments. He took out a mortgage of 200k to buy it and a 300k second mortgage to renovate it. Now, there is no way that house is worth that kind of money. And, there is no way I could sleep at night knowing I owed that much money. I am thinking about taking out a home equity line of credit for about 10k just because I am tired of emptying out my little "rainy day" fund to pay for all the stuff I need to do around here. My hands shake when I consider that second mortgage even though I have 70k of equity easy in my house and can easily afford it. Things are just too uncertain now.

Still. While houses are moving here in the PRH they aren't selling within 5 minutes of the "For Sale" going up as they once did. From what I can tell, folks are preferring to stay put. Maybe fix up what they have and stick with a sure thing if they are lucky enough to be in that position. That's what I am going to do.

The flooring guys are an hour late. The man told me that they were swamped with all the insurance jobs they picked up after the tornado tore through here earlier this month. Maybe so. More probable is that this is typical of my luck with contractors. At least it's not deer season. God knows when they would show up then.

At least it is a pretty day and I am enjoying sitting out here on my porch swing. Sure, times are uncertain but as one of my grandmothers used to say, " When have they not been uncertain?" Living through a depression and 2 world wars will give you that sort of perspective. Here the present crisis in the financial world is precipitated by greedheads who made imprudent loans to unqualified borrowers on adjustable (read potentially untenable) terms. They then sold the paper to servicers who were backed by investors who bet that the housing market would never suffer a reversal.

This is a rough patch but things will straighten out eventually. They always do no matter what kind of moron is in the White House. When have the times not been uncertain?

Makes the phrase "sign of the times" a relative term.

No comments: