Tuesday, April 21, 2009

Disclosure Rant

I’m working on refinancing my mortgage. I figure if I have to pay other people’s too, I better make mine as cheap as I can.

As expected the mortgage application is a half inch thick. Buried in it were 12 pages of State of Colorado Disclosures that weren’t there last time I applied for a loan larger than my gross yearly income. Some of the disclosures are quite specific, too. A few choice quotes:

You could lose your home, and any money you have put into it, if you do not meet your obligations under the loan.

… you should also remember that you may face serious financial risks if you use this loan to pay off credit card debts and other debts… and then later incur significant new credit card charges or other debt.

You should not accept any advice to ignore your regular payments to your existing creditors.

If the new loan is an ARM, I have considered how long the new monthly payments will be in effect before it adjusts.

I imagine those disclosures are forehead-slappingly obvious to most (hopefully all!) of you. But recent history shows that not everyone shares that knowledge, so I guess they’re worthwhile. It certainly doesn’t hurt to try to protect people from making bad decisions.

But reading that made me think about all the sob stories I’ve seen in the news about people that got burned doing financially stupid things. People that just accept every credit card they get, or whatever mortgage they’re offered, or whatever car loan they come across, because “they wouldn’t let me have it if I couldn’t afford it!”

What are the odds that people like that will actually bother to read and understand 12 pages of mortgage disclosures, and think through the implications? Not so good, I think. Ultimately, you can’t prevent people from doing stupid things, no matter how hard you try. But I guess it doesn’t hurt to try.


That last disclosure about the ARMs reminds me of something I heard on the radio in early 2008. The radio station was pitching a charity fundraiser. Trying to stir up sympathy for the beneficiaries, the announcer said, “Most of these people just hit some bad luck, like they got laid off from their job or had a health problem or their mortgage rate adjusted up.” (emphasis added)

That last bit left me speechless. In what world is your ARM adjusting considered bad luck? Any ARM with a teaser rate (ie, most of them) is practically guaranteed to adjust up! Even ignoring the teaser rate, mortgage rates had been at generational lows for several years. ARMs adjusting up was a near certainty – practically the opposite of bad luck.

I guess they hire those radio announcers for their voices and cool names like “The Spaz”, rather than for financial acumen. Good thing, too.

Sunday, April 19, 2009


Seats in the Ellie Caulkins Opera House, during today’s Doors Open Denver event.

Saturday, April 18, 2009

Slushy Ramble

When I left work Friday it was warm and snowing through a thick overcast. The snow turned to slush on contact with anything solid, forming an inch of slurry on every horizontal surface. Each flake was big and fat, like a miniature snowball, and smacked audibly into the slurry on the sidewalks.



Most of the city’s denizens were heading straight from work to home, trying to get there with the minimum of snow on their heads and slurry in their shoes.


A couple of unfortunate women ventured out of their houses, demonstrating why I don’t own a dog – so they won’t drag me out in such weather. But then I was out in it anyway, so maybe that’s not much of an excuse.


The snow brings an uncommon peace to the city. All the sound is damped out and most of the pedestrians are in hiding. The effect is especially pronounced in the hidden corners of the city. Little courtyards and back alleys can feel like part of another world.





After an hour of re-exploring the snowy city I has shoes full of slush, a sodden hat and waterlogged gloves. I imagine I looked like an ambulatory snowdrift, shambling around with occasional pauses to snap a photo. But it was a damn fun photo walk.


A few more photos (click through for larger)


Thursday, April 16, 2009

Tax Day

I finished my taxes last month, so that aspect of tax day was a non-event for me.

Instead, Wendy & I attended the Denver Tax Tea Party.  As I understand it, it was a protest against the out of control government spending. 


This was my first political protest or rally type event, so I didn’t know what to expect. I didn’t know personally know anyone that was going, so I was a little worried that I’d be standing there alone with some crickets chirping in the background. As it happens I’d guess over 1,000 people were there, maybe 2,000. I’d count that as a pretty good crowd.


As I said, I personally was there because I think the government spending, particularly bailout spending, has been completely out of control recently. This isn’t a partisan or anti-Obama position in my opinion. It’s about the principal that people and companies should face the consequences of their decisions, rather than foisting them off on the rest of us. That applies equally to investment bankers, insurance executives, home buyers and shareholders. I also think that throwing around a trillion here and a trillion there adds up to real money pretty damn fast.


Of course others were there for other reasons. There were some attacks against Obama personally, for example questioning his citizenship or heritage. I don’t think that was particularly constructive, but everyone can have their opinion. There were also some pro-lifers, anti-immigrationers, and even a “down with the Federal Reserve” group, all of which struck me as off-topic.


Although none of them were as baffling as the guys wearing Guy Fawkes masks playing Jonathon Coulton on a boombox. All I can figure is that they were advocating blowing up Congress. Although that would substantially improve the level of discourse there, I think that’s a bit extreme.



I’ve been checking out some of the coverage of the protests. I think it’s interesting how it’s been spun. For instance, nearly every news outlet referred to it as “Fox News hyped” or “Republican backed.” Apparently Fox did hype it, although the first I heard of that was CNN talking about it after the fact. Apparently they did a poor job of hyping it. Regardless, I think it’s a silly criticism. Just because a news channel jumped on the bandwagon doesn’t mean they own it. You might as well belittle Obama as “the MSNBC backed president.”


I’ve also noticed a lot of commentators claiming that the protest is ridiculous because taxes have not been significantly raised yet. Even Nobel-winning economist Paul Krugman jumped in, and threw in some partisan name calling that would be the pride of any eighth grade recess. I know my taxes haven’t gone up yet. But what about next year? Where else is all the money to pay off that debt going to come from?


CNN reporter Susan Roesgen wins my personal prize for least-objective journalism of the day. I’m pretty sure objective interviewing does not require that you belittle, interrupt, and openly argue with the interviewee, before dismissing them as “anti-CNN.” I think she missed the idea that reporters report the news, instead of dictating it.


All in all, it’s been an educational experience for me. Maybe we even discouraged the government from throwing away more of our money in the future. Unlikely, I know, but I can still Hope they’ll Change their ways.