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11 January, 2010

The Haves and the Have-Nots

Well. After posting my most recent entry, complaining about my inability to refinance my home, I received an anonymous comment. The comment made a few points. But the most important point that it made was that I have a lot more to be happy about, and appreciative of, in this life, than I have to complain about. And that maybe I should not spend my energy focusing on the negatives.

And I guess it's quite true.

I spend a good portion of my time on here complaining. Some of it is for entertainment value, sure. But plenty of the time, I am just lamenting the fact that this or that minutiae did not go the way I'd specifically wished for it to go. I've painted many things in the most negative of light. It may be true that 2008 was not a spectacular year for me, as I noted in an earlier blog. But it wasn't a terrible year either. I traveled, yes. I actually had a decent job, yes. I bought a home for the first time, yes. I joined a spectacular band, yes.

And that was 2008. The "bad" year.

2009, which I referred to (I think) as "slightly better", should have fairly been called a "great" year. I had a job - still - when many people did not. I did not lose all of my retirement, because I'd moved a lot of it out before the big market drop. I was still in the great band. I still had the great home. Oh yeah, what else was there? Oh, yes. I started a new relationship with someone whom I'd been interested in for years, and had the opportunity to do all sorts of exciting and adventurous things together. I have this habit of separating out relationships from the rest of my life, and treating them as entities that are to be analyzed, and usually criticized. But putting the pieces back together into the whole, last year was a really, really good year. The band released a CD, which was more successful than I ever thought I would be (even though its actual success was modest). I made a positive career change. I started getting back into shape again, not that I was ever too badly out of shape.

Anyway, the point here is that I am one of the haves. I am not a have-not. I have. I have always had. And, if I don't fuck it up, I will probably manage to have as long as I am.

Happiness is not a 4.75% interest rate. Happiness is not a 4.5% interest rate. Happiness is not a 20% raise at work. Happiness is not a bigger house. Or an older house. Or a newer car. Or nicer jeans. Or higher download speeds on your internet connection. Happiness is not taking 3 vacations a year instead of 2. Happiness is not being a songwriter. Happiness is not being invited to all the right parties.

Happiness might not even exist. In which case, it's nothing. But the pursuit of happiness, which I suppose is what we're usually engaged in, no matter how circuitous the route... it's not about any numbers or categorizations. It's about the obvious.

My mother used to paraphrase what was probably a famous quote by someone like Oprah or Rosie O'Donnell. It went like this:

"Happiness is not having everything you want. It's wanting everything you have."

Ironically, my mother wanted a lot of things she didn't have. And she wasn't particularly happy, though I think she was functionally content, if you consider complaining to be part and parcel of being an old Jewish woman. But she at least had the wisdom to impart those words to me in a fashion that I will always remember, and always associate with her.

What I've been wishing a lot lately was that I still had my mother.

06 January, 2010

Obama Home Affordable Program not for me

I feel left out right now.

And it's not fair. But there's nothing I can do about it.

My credit is 820. As you probably know, that's good credit. Better than good. I bought a home about 2 years ago, a little bit past the peak of the market. Prices had started coming down. At present, my house is probably worth just about what I paid for it, give or take a couple of percent. So I'm not in the red. I'm not "upside-down", as they call it.

But I can't get in on the refinancing fun. Everyone else got the 4.5%, the 4.75%. Not me. And the simple reason is that the loan that I was sold, which sounded perfectly good at the time, is a loan that is being excluded from consideration for virtually all refinancing plans. When I bought my place, I was only able to make a downpayment of 10%. There are two ways that this is usually handled. Option 1 is to have something called "PMI", or Mortgage Insurance, which is essentially a tax that the bank charges you for not being able to put down 20%. Option 2 is to do two mortgages; a primary mortgage for 80%, and then a secondary (sometimes called a Home Equity Line of Credit) for the 10% that makes up the difference of what you were not able to put down (in some cases, these were being issued for the entire 20% remainder - i.e. zero down mortgages).

The great offer that I was given by my mortgage broker was an Option 3, which was a 90/10 loan with "lender-paid" PMI. What this means was that I have a single loan for 90% of the value of the home (10% downpayment), and the mortgage insurance was folded into the interest rate, rather than being charged explicitly as a separate item. This was supposed to be a better deal for me, according to him. But now, I can see, for a variety of reasons, it was not a better deal.

First, if you do an 80/10 loan, then you could eventually pay off your 10% portion, and have a rapidly decreased effective interest rate, since those 10% portions are usually a crappy rate. Second, if you have PMI, you could always have your home appraised if it gains sufficient equity, and then you would be absolved of the PMI payment, and again, save a couple of hundred a month.

But with the option I have right now, I am stuck, because all of the money that Obama's plan is throwing at borrowers good and bad, is not going to anyone with loans such as the one that I have with GMAC Mortgage. If you've got PMI, lender-paid or otherwise, you do not qualify.

There's a massive amount of irony here, because there are people who have completely horrible credit, or have been missing payments left and right. They will qualify for this refinance program, even though they'll likely continue to miss payments. I have never missed a payment, have excellent credit, and will be stuck at 5.75% indefinitely, because at the point where I have enough equity to qualify for refinancing, the interest rates will likely be too high to justify doing it.