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« on: April 11, 2014, 06:19:17 pm »
I have a lengthy anecdote to share with you, Happy Thread. I don't know if there's really a moral to it, which is what makes it an anecdote. Maybe it'll come to me by the time I'm done, and it's a kind of cautionary tale for you young-ish folks just getting out into the world of Complicated Financial Stuff.
When I went off to college in 2005, I got a loan for one semester of student housing. I was told, fresh out of highschool with no major financial experience, that the loan wouldn't require payment or generate any interest until six months after I was no longer a full-time student. Cool.
I decided to go to a different school the next semester and moved back to my family. Literally a week after the next semester ended, I started getting calls and noticed from some debt collector on the other side of the country who proceeded to explain in very stern language that I had actually signed for two separate semesters of housing loans, that they were due past immediately, and had already racked up more charges, penalties and interest than the original value of the loan(s). When they couldn't even produce a copy of my contract, let alone the one I may or may not have signed, I calmly told them to fuck off and... basically spent two years ignoring their phone calls, figuring someday after I struck it rich I'd be able to either pay them off or counter sue or something.
In 2008 I had cause to look into getting a regular non-student loan and found out my credit score was like 500, because my entire credit history was one totally unpaid loan. I'm told this is bad. Then another thing happened in 2008 some of you may remember: the banking system shoved its collective head up its ass, and a lot of lenders and debt collectors who had built their business model on rooking people for shitty loans suddenly collapsed. A few months into 2009 I got a letter from a different company (also across the country) stating that ownership of my debt had changed and I now owed the original value with nominal interest, due to start paying no sooner than when I was no longer a full-time student. I like to think stiffing that first company on their outrageous terms personally contributed to their going underwater as punishment for their greed.
After I graduated and then eventually struck it rich in Adult terms (i.e. got a job that paid more than my living expenses) I paid off the much more reasonably priced debt. This also counted as my entire credit history, since nobody would even talk to a underemployed nobody with an unpaid loan. I figured this would speak to my favor and to my untrained eye, my credit report looked great with one fully-paid item. 1/1 = 100% Awesome, right? Now further in time, my apartment lease is coming up so I got a wild hair up my ass to look into buying a condominium. For the uninitiated, that's when you legally buy the inside of an apartment while paying ridiculous amounts of money to someone else to maintain the outside of it. After getting the high-pressure-with-a-smile sales job I was reaffirmed in my suspicion that realtors are evil, especially mother-daughter teams of realtors.
I also signed the papers and agreed to put down an offer at the asking price, because I was so bewildered by the whole process that I didn't want to do any arguing, for fear that there might be some super secret law that as soon as you talk to a realtor you have to agree to everything they say or they'll be given ownership of all your money forever. That sounds silly, but talk to anyone who's tried to buy a place and they'll describe the same first time fear. I only did it because there's a clause to change your mind and back out within seven days, having only paid the collective $500 or so dollars just to get your foot in the door.
By the next morning I had decided to back out, but figured I keep going into the backout period and pay the $500ish just to see what else was involved and get a better idea of my financial status. Then the lender told me I was denied the mortgage application. Why? I don't actually have a credit history. Either because of the type of loan or the wacky circumstances of its management, my old student housing bill counted as being paid-in-full at issuance, back in 2005. Which is too long ago to count as "recent credit history". The realtors politely said to call again when I have a line of credit and hung up on me, with no mention of the opening costs I never got around to paying them.
In summary: In the entire third of my life that I've technically been an adult, I've interacted with the world of Complicated Financial Stuff exactly twice, was screwed over both times, and both times the system failed in my favor. Still not sure what to make of that, except that I think I'll just continue to pay cash for rental properties for a little while longer. Certainly makes me happy telling the story.
