Tight times may loosen loans, but for naught

OFF/BEAT GLIDEWELL E-mail: Click here Archive

© St. Petersburg Times
published October 18, 2002

I can't claim to have flunked economics because I never took it, and the failure of one competing economic theory (remember trickle-down?) after another shows me I probably didn't miss a lot.

One thing becoming clear, however, is that our economic system seemed a lot healthier when it was based on lies and voodoo accounting. Now that they have started indicting the thieves and making everyone else tell the truth, we are troubled.

Another is that our economy is great for offering people loans when they can't afford or don't need them, but all of that available money goes away when it is really needed.

Not a day goes by that I don't get a minimum of 10 solicitations, by telephone or e-mail or snail mail, offering to lend me large amounts of money at low interest. Last night a woman on the telephone all but begged me to let her credit card company take over my debt to another company at what looked like pretty good interest rates.

I declined because I know what will happen. I'll say yes, and then three days later I'll get a letter saying I already borrowed too much at high rates to borrow any more at low rates, even if it is to pay off the high rate loans.

Seemingly, every mortgage company in the country, including a few that I am pretty sure consist of a telephone boiler room, answering machine and post office box, wants me to refinance my house at better interest rates and have gobs of money (that they want me to spend 30 years paying off) to spend on other things.

Actually I just did refinance my house, with the company that already held the existing mortgage. I am not happy with the results. I was promised, by dropping 2 percentage points in interest, that my payments would go down by about $40 per month.

Actually they have gone up by a little less than $130 per month. It seems that the company wasn't withholding enough money to pay for my already larcenous insurance rates, and I, like everyone else in Florida, got hit with a massive rate increase. It kicked up my escrow payments even more.

As nearly as I can figure, the closest I would have come to savings would have been about $6 per month, but that is because the only people who talk faster than insurance agents are the ones who answer the telephone at mortgage companies.

So,instead of things getting better, I am now reassured that at least they didn't get as bad as they could have.

That's heartening.

Now, earnest sounding people who can't pronounce my name and who introduce themselves as loan vice presidents when they are probably calling from a telemarketing room in a prison somewhere, promise me that riches can be mine if I will just reconsider refinancing with Kneebreaker Mutual.

I'm sure they are puzzled about why I break out into a fit of shrill giggling as I hang up.

The bottom line on this sudden loan largesse is that there is a lot of money available at low interest rates because downward adjustment of interest rates seems to be the only way the government can try to jump-start the economy.

Those in the business of lending money are not doing as well as they could because the people who watched their 401(k) accounts turn into cow pies, haven't had a decent raise in two years or are unemployed just aren't borrowing for those big-ticket items like they were when they had incomes and futures.

And the people stinting on raises, handing out pink slips and quietly dumping large blocks of stock in their failing corporations say they have to do all that because they can't sell refrigerators and cars to the people whose incomes and plans have been destroyed by the corporations they trusted.

I'm not whining. I don't blame anyone but myself for my own economic situation.

I have always believed that he who dies owing the most, wins. Unless I live another 40 or 50 years, I probably will qualify.

I'll just leave my creditors holding bags with high interest rates on them rather than small ones.

That way, they will miss me more.

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