Nine months ago my husband and I sold our house in Oregon and moved our family back to Colorado. We had high hopes of purchasing a new home by Christmas. We had the money from the sale of our house to use as a down payment. We have excellent credit scores. And my husband’s business was two years old and had shown a profit both years. We figured all we had to do was show up and start looking and the house of our dreams would fall into our laps.
We were so wrong!!
We both knew that the game had changed, we saw that when we tried to sell our first house in Eugene. Even at the starter home price that we were offering it at, people were having a hard time getting a loan to finance it. There are no zero down loans available anymore. FHA will still finance a 5% down (I might be off by a % point either direction) Conventional loans want 10%, they’d prefer the old 20% though. The people who bought our house had to completely pay off their credit cards in order to get their loan. And had to keep them dry until it closed. We don’t really have credit card debt, so that’s not so much of an issue for us. We also don’t have car payments. In fact, we are payment free at the moment.
So, what’s the problem? Well, it turns out that crossing state lines with a business makes that 2 year clock start over. So my husband’s business, which is technically almost three years old, is, in new banking terms, only 9 months old. That means that the banks won’t look at that income to secure a loan. So, I got a job. I was going to get one anyway, it was part of the deal when we moved to Colorado. I was going to get a 9-5 and my husband was going to get his turn as a semi-stay at home parent.
I’ve had my job for almost 4 months now. That should be enough time to get a loan. But it isn’t because it took me 6 months to get that job. Sure I was in school for almost 2 of those months and working freelance while sending out thousands of resumes and showing up for dozens of interviews, but it’s an unacceptable employment gap. The banks now want me to be at my job for at least 6 months before they’ll loan money to me.
Some of you are probably thinking this is good, the banks should be more careful. But here’s the thing, my company could decide that I’m expendable at any given moment. And I’d be fucked. My husband, on the other hand, has true job security in his business. No one can fire him. He can always go out and find clients and work. Even in a year where he took three months off work to move across the country and watch our kids while I went back to school, his business showed a profit.
Everyone keeps moaning because the home-buyers tax credit hasn’t stimulated the housing market the way that it was supposed to. Home sales are still down. The tax only helped people who were already going to buy, yadda, yadda… But it’s not the tax credit’s fault. It’s not the realtor’s fault. My realtor (Amy Menell for those of you in Colorado) is shouting from the rooftops that now is the time to buy, there’s the tax credit, all time low-interest rates, rock bottom prices on prime real estate, and more… And trust me, people would love to buy. People would love to take advantage of these opportunities. But we can’t, because the banks won’t help us.
Those would be the same banks that we the people, we the tax payers bailed out just a few short months ago. They have taken our money and are now playing keep-away with it. Sure, most of them paid back their TARP funds. Sure some of them even paid the interest on those funds. But they’re not giving a dime of it back to us. We’re too high risk for them.
Well, you know, I’m starting to think that those banks are too high risk for me. Sure, they’re not exactly playing fast and loose with my money anymore, but I’m worried because I can’t tell what exactly it is that they are doing with it. I think maybe it’s time for all of us to send a real message to Wall Street. I suggest we all go down to our mega-banks and withdraw our money, in cash, with a ransom note letting them know that they can have it back when they agree to start lending again. As my mortgage broker says, the lending pendulum is always swinging depending on the political climate. In the 90s it went to the far stupid, risky extreme and then last year it came swinging back without even pausing in neutral and went right through the ceiling on the conservative ,hedge your bets side and it’s still going up. New regulations keep trickling down every day.
So, if the new guy in the white house really wants to help main street, and really wants to send the people a message that he’s with us, he’ll whip out that executive order pen of his and tell those capital “A” A-holes who took the federal handout to start lending again or face “The Man” buying them out and socializing their profiteering gambling rings for the greater good.
And for those of you who are freaking out at my suggestion that we all make a run on the banks to show our displeasure at their heinous fuckery because it might actually tank our economy – take a good look at our system, then tell me that it isn’t worth breaking in order to build it fresh and make it better. If you’re really scared, take your money out of the big banks and put it right back into your local FDIC credit union. Last time I checked they didn’t have their hands out when the big federal checks started flowing, and they’re still trying to lend to qualified people. So if you won’t put your money under your mattress, give it to the little guys. They’re still working for the dollar, and for the people.