The highs and lows of parenting and real estate.

Credit Nightmares

People Who Shushed Me and My Realtor Buddies During This Class: 4
Times After I Took This Class I Woke Up In a Cold Sweat: 7
Percent of The Population Who Should Take This Class: 98

I took a continuing education class a couple of weeks ago with two of my Realtor gal pals (one of whom used to be my manager; now she’s my bossy, loud-mouthed, knows-her-stuff buddy who I always call when I don’t know what to do). We started the class of wondering why we don’t take all of our Con Ed classes together, as it would be so much more fun, and ended thinking, ‘Oh, right, that’s why,’ after almost getting kicked out twice for giggling and whispering (totally class relevant stuff, I swear!).

This class was titled, “Options For a Troubled Homeowner” and is part of a series meant to educate agents about the pretty typical homeowner we deal with right now, which is to say, the one with a financial hardship. We were hoping to pick up some tips to pass along to our short sale clients about how to safely navigate the process and come out on the other side ready to rebuild. What I actually got out of it was nightmares and cold sweats about what could happen to my own finances, the general state of the economy and the legal ramifications of all short sales to date.

Basically, the class was taught by Patrick Ritchie, who is a credit expert, genius and total nutball (and I say this with all due respect, of course. Some of my favorite people are total nutballs). I had taken a class by him several years ago at the beginning of my real estate career, and remember him being very knowledgeable and interesting, but I think the disastrous state on a national (and potentially world) level of his area of expertise has whipped him into a frenzy. He speaks with a kind of frantic hilarity about his fear of ‘hyper inflation’ which causes him to stockpile hundreds of granola bars (among other things) when they go on sale. I get the feeling that he went into the business of becoming an expert in all things credit related because he’s a bit of a control freak and the idea of not being able to control his credit (a notoriously nebulous and uncontrollable thing) scared him, so he learned as much as he could about the details and scenarios related to credit. Then, when everything went to hell a few years back, the man must have practically had a psychotic break with the stress of it all.

I didn’t walk away from the class with a really clear idea of what I learned or what the general point or structure of it was meant to be, but I did pick up some key concepts that will potentially haunt me forever. So I thought I’d share them with you so they can stalk you and turn you into a shivering, hysterical conspiracy theorist too!

1. At one point during the class, Patrick Richie’s level of fervor peaked with the declaration, “If you learn ONE THING from this class, make it this: Never KEEP money at a bank you OWE money to.” Now, when I tweeted this statement, several of my followers were like, ‘Um, DUH.’ I also, however, had several reply, ‘Why? I do…’ And I do too. I have three mortgages (rental property, HELOC on the rental property, primary residence) and a checking and savings account all with Wells Fargo. It’s convenient and the banks make it attractive with certain incentives (free bill pay, etc.) if you do.

After he said this, though, I remembered my client/friends, who, after experiencing a job layoff and extended job search period, pursued a temporary loan modification on their mortgage. They were advised by the bank to miss a payment to begin the process, but when they did this, their checking and savings account, with the same bank (a credit union, which, according to Ritchie, are the most vicious when attempting to settle a claim) were immediately frozen, scaring the living crapola out of my friends. I guess this would be Ritchie’s point. You don’t know what is going to happen, so you need to be aware of, and plan for the worst. If something happened that forced you to halt payment on your loans, you don’t want your creditors to have access to your liquid funds. Talk about making a bad situation worse. “Oh, you don’t have the money to pay your mortgage? OK, well we’ll just take all of your money then. Is that better?”

So, you know, I’m currently stuck in “Suck it up and spend an entire month (or possibly the better portion of the rest of my life) switching over my accounts, auto-paid bills, debit cards, check and probably eight other things I’m not even thinking of, to another bank that isn’t linked to my mortgages” or “Be lazy and pretend like it’s not going to be an issue and I’ll never have a reason not to pay my mortgage or anything because I totally don’t work entirely on commission and my husband isn’t in a volatile industry that’s required him to change (and be without) jobs 3 times in the last year. And it’s a hassle. And I’m lazy. Did I mention I’m lazy?” hell. Sometimes I wake up in the middle of the night and stare at the ceiling and pull my eyebrow hairs out. I’m just saying.

2. Ritchie managed to end the class on an even more depressing note by discussing a friend of his who committed suicide the day before last Christmas because he was in a financial black hole. He went on to mention his sister, who, even though he is one of the most knowledgeable credit experts around, has creditors stalking her through him and has for years and finally, a friend who was declaring bankruptcy now, even though he’d been telling him for 4 years it was the right thing to do. Yes, each of these things is icky and awkward and not at all where we want to see ourselves, but here’s what I gleaned from all of this (and what I think Ritchie’s ultimate point was): everyone, in some capacity, is currently dealing with, or will in the near future come into contact with financial hardship. It isn’t the end all, be all. It doesn’t help to bury your head in the sand or be devastated by the embarrassment and stigma of it all. It’s a temporary situation and you can’t let it run your life or ruin your happiness. You have to be aware of your rights and options and make the best choice you can moving forward. It is what it is. Don’t be a dummy and kill yourself over it.

So I’m totally going to stop pulling my eyebrow hairs out, I swear. Pretty soon.

3 Responses to Credit Nightmares

  1. Pingback: Top 10 real estate posts of the day for 3/26/2010

  2. Great blog Elizabeth- Except for the loud-mouth, pushy know’s it all part! :)

  3. OK, Jesi, I admit I may have exaggerated the ‘loud-mouth’ part. You’re not really a loud-mouth. I stand by the pushy, knows her stuff (which is different from know-it-all) part. You can hardly deny that. 😀

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