Yesterday I received a call on my landline which caller ID indicated was from my area code and exchange. Many phone scammers are now spoofing the area code and exchange in order to fool victims into thinking they are local callers. Unusually, there was also a name associated with this call. Having a few spare minutes on hand, I decided to investigate this name (which also could have been spoofed). Here is what I found:
• the guy is indeed local. He lives in a large house on a tiny lot (think McMansion) much closer to an interstate than I would ever want to live.
• the guy is a mid- or upper-level executive at a local pharmaceutical company
• like many Floridians back in the go-go early ‘00s, he decided to get rich by investing in real estate. He took out several mortgages to help pay for these properties, and then defaulted on these loans in 2009. He’s got a bunch of 2011 foreclosures on his record.
• he bought his current house brand new in 2015, taking out a mortgage for 95% of the purchase price (~$450k).
• he recently took out a $60k second mortgage on his house.
I was surprised that a person with relatively recent foreclosures on his record could so easily obtain new loans, so I googled this topic. It turns out that the “new normal” is that mortgage originators are willing to overlook a history of foreclosures as long as the person has been able to repair their credit score since their last foreclosure. The reason is simple: so many people suffered foreclosures after the 2008 financial crisis that mortgage originators can’t afford to bypass this huge market of folks who have a history of getting deeply into debt and are willing to do it again. Nowadays, a person might have to wait 3, 5, or 7 years after a foreclosure before obtaining another loan, depending on who is doing the lending.
For me, debt is a four-letter word. Other folks are apparently more debt-tolerant. To each their own.
• the guy is indeed local. He lives in a large house on a tiny lot (think McMansion) much closer to an interstate than I would ever want to live.
• the guy is a mid- or upper-level executive at a local pharmaceutical company
• like many Floridians back in the go-go early ‘00s, he decided to get rich by investing in real estate. He took out several mortgages to help pay for these properties, and then defaulted on these loans in 2009. He’s got a bunch of 2011 foreclosures on his record.
• he bought his current house brand new in 2015, taking out a mortgage for 95% of the purchase price (~$450k).
• he recently took out a $60k second mortgage on his house.
I was surprised that a person with relatively recent foreclosures on his record could so easily obtain new loans, so I googled this topic. It turns out that the “new normal” is that mortgage originators are willing to overlook a history of foreclosures as long as the person has been able to repair their credit score since their last foreclosure. The reason is simple: so many people suffered foreclosures after the 2008 financial crisis that mortgage originators can’t afford to bypass this huge market of folks who have a history of getting deeply into debt and are willing to do it again. Nowadays, a person might have to wait 3, 5, or 7 years after a foreclosure before obtaining another loan, depending on who is doing the lending.
For me, debt is a four-letter word. Other folks are apparently more debt-tolerant. To each their own.
