This week’s Buzz Report is a doozy, mostly thanks to Tom Merritt’s amazing 1940s broadcaster voice, producer Sarah Harbin’s mad editing skillz, and Khoa Nguyen’s animation. Wow, this show needs credits!Read more →
Why is this not a bigger story? Banks are freezing the home equity lines of credit they extended to their customers. I’ve seen reports that Countrywide has frozen over 122,000 lines of credit; IndyMac just, for the second time in just over a month, froze mine–citing an “adverse change” in our credit and financial situation since the line of credit was issued. In both cases, the “adverse change” seems to have been a drop in credit scores of around eight points. Eight points. In neither case did the scores drop out of the “good” credit score band, in case you’re wondering.
The last time we appealed the IndyMac freeze, we pointed out that despite the shockingly precipitous eight-point drop, our credit scores remained excellent and our overall household salary had actually increased 25 percent since we bought our house in April 2006. When we got our latest letter, about a week ago, we called customer service who told us, first, that we’d have to re-file our “dispute” the same way we had before–via fax; and second, that they had, on that day, mailed out 10,000 letters exactly like the ones we got.
This is, in a word, unacceptable. In my case, it’s ludicrous: we significantly overpay our line of credit bill, because we want to get rid of it. We’re hardly “high-risk” customers. And now we’re being punished for that diligence: we overpay on this high-interest debt instead of saving that money in a low-interest account. Why? Because the line of credit is just that–a line of credit that we can turn to in an emergency. Now, because a bunch of banks got themselves into trouble by convincing people that they could afford a lot more house than they bought, they’ve activated what I can only assume is a dumb algorithm that auto-cancels the lines of credit that they were, just a year or so ago, handing out to people like lollipops. And it’s really dumb if it’s canceling accounts based on credit scores that go from “really good” to “pretty good.”
If Countrywide is freezing more than a hundred thousand lines of credit and IndyMac is freezing 10,000 on any given day, and other lenders are following suit, it’s a more than safe bet that a lot of those people with frozen credit lines are perfectly good customers, like my husband and I, who are in no way default or foreclosure risks. Did I get a nontraditional variable-interest jumbo loan that used a credit line to supplement my cash down-payment instead of a nice, easy, 30-year fixed mortgage? Yes. Why? Because I wanted to buy a house in Oakland. It was silly, I know. To want to settle in the town where my husband grew up, raise a family near his old stomping grounds, maybe send them to the same schools–build some kind of family history in what, I think, is a pretty nice city. One that just happens to be almost entirely unaffordable.
Don’t even get me started on the way that Proposition 13 and out-of-control lenders combined to create a perfect storm of astronomically increasing housing prices in an utterly artificial market that makes California the least friendly environment to young families or, god forbid, the less-than-upper-middle-class that I have ever seen. Don’t even ask me what my property taxes are! And the way the financial structures aligned themselves to make the impossible seem possible? To support and justify and enable housing prices’ race to the moon? It’s unthinkable. When we walked into our mortgage brokers’ office to talk about buying our house, she calculated what we could afford each month using our gross income. She claimed we could “afford” a house with a monthly payment that was more than we took home after taxes. But what if we hadn’t done our own math? What if we didn’t know how? What if we trusted the advice of a respected, non-sleazy professional who wouldn’t dream of trying to drive a bus right over the top of us? A lot of people got themselves into a lot of trouble because they walked into the offices of mortgage brokers who looked at them like fat rabbits just ready for the spit, and a lot more people are finding themselves in trouble as those banks and brokers now get a tummyache from all that fat rabbit they ate. And it’s a bunch of crap.
Here’s the worst part. The more stories we read about the “subprime mortgage crunch,” the more the tone of the reporting starts to point the finger at the people who took out the loans in the first place. The people with “bad credit,” or the “irresponsible homeowners” whose “eyes were bigger than their stomachs.” I am telling you, reporters, you need to knock that tone off right now.
These lenders were consumed by the white-hot greed of a thousand suns, it was their playing field, their rules, and homeowners got taken for the ride of their lives. Now, those lives are being ruined, and while you can argue that the lenders are suffering because they’re losing money or being acquired or going out of business, it’s not enough. They’re headed for big, fat falling-interest-rate bailouts. Most of them will be acquired or bounce right back stronger than ever. No, it is not enough. They should be investigated, punished, reformed, hell, even shut down. And they won’t be. And this is what I liked about John Edwards–at least he talked about the possibility that this kind of “business” shouldn’t keep happening in America. Because you know what? Like the lenders, I am going to be just fine. I am lucky as hell–I have a great job, a stable family, a good salary, and good credit. I’m one of the lucky ones. But if I feel like the deck is stacked against me? I can’t even imagine what it would be like if it really and truly were.Read more →
I was in Whole Foods tonight (the Oakland store, not the Berkeley store, as this story might have led you to suspect), waiting my turn at the meat counter. The woman in front of me was ordering a whole chicken, and asked whether they had “organic” or “natural” chicken. The butcher told her they had both, but the organic was on sale for $1.99 a pound. Here’s how the conversation went from there:
Woman: Ok, I guess I’ll take the organic, since it’s on sale. But the natural usually tastes better, you know. What’s the main difference between them?
(Editor’s note: I think it’s only fair to mention here that her voice was loud, unpleasantly nasal, and more than slightly bossy. Imagine, say, a nine-year-old girl in charge of her own pony party. Just trying to paint a complete picture.)
Butcher: Yeah. Well, the organic is certified that it hasn’t had any pesticides, where the natural isn’t certified, but both are free-range.
(Editor’s note: the butcher was a slightly Whole Foods type, with a ponytail and all, so he was, up to a point, fairly sympathetic and/or patient with this person.)
Woman: Do you know what these chickens ate?
Butcher: Uh, well, they’re both grass-fed, so the only real difference is the certified organic.
Woman: Well, do you happen to know if they ate bugs?
Butcher: Uh …
Woman: I’m just wondering if in addition to grass, they ate like, bugs and stuff.
Butcher: Well, they’re free-range. So … you know, probably.
Woman: [Nods. Silent for a second.] Chickens are supposed to eat bugs.
Butcher: Uh … really?
Woman: Yes. They’re supposed to eat bugs, it makes them taste better. They get like, more protein. You didn’t know that?
At that point, the butcher wisely just started nodding and wrapping up her chicken. I managed to wait until I got outside to unleash this rant on my poor husband:
Molly: You know, regardless of whether that chicken ate grass, cornmeal, apples, other chickens, or bugs, and whether it ran around free and did or did not eat massive amounts, tiny amounts, or no amounts of pesticides, at the end of the day someone cut its throat and now you’re taking it home to eat it. We’ve spent centuries removing ourselves from the food-gathering and processing apparatus, we’ve made it almost bloodless for the average consumer because we like our meat all bloodless and cut up and nicely packaged. But now, we’ve got this whole new generation of concerned hippie-yuppie conscientious shopper who wants to literally micromanage the diet of a freaking chicken in the months up to the time when it gets its head cut off (and meanwhile, I’m standing there with an increasingly antsy 11-month-old and I like my encounters at the butcher counter to be mostly bloodless and also fast, and I really and truly want her to buy her chicken and move on).
And the insane part is, this is not the first time I have seen some pushy, mid- to late-thirties white lady at a butcher counter demanding to know what the chickens ate before they died! I have actually seen this before! It’s practically an epidemic! And finally, today, I think my husband came up with the cure! You know what, ladies? If you want to know exactly what your chicken ate before you ate it? Raise your own damn chickens!Read more →