I met Harry the Mortgage Guy through
Sarah, my sister-in-law. It was 2003,
and I was ready to buy my first house.
“I’ll hook you right up,” Harry said, his voice so gravelly I was sure I
smelled the Camel No Filters through the phone.
Sarah told me Harry wore gold chains and strong cologne, and I kept a
mental image of the man in my mind whenever we talked on the phone. I pictured him in his smoke-filled office at
the Saugus Federal Credit Union, a half-filled bottle of Drakkar Noir on his
desk, next to piles of financial reports as he scoured the internet for the
best mortgage he could find for me. I
knew absolutely nothing about buying a house.
When my numbers came back from the
bank, Harry was exuberant. “You could
buy something over $600k! Live a
little. You’re good for it,” he told
me. “We’ll set you up in something we
call an ‘adjustable rate mortgage.’ It’s
perfect for you.” No one ever confused
me with Milton Friedman, and for years I thought a Laffer Curve was the perfect
pitch on a 1 and 2 count, so when Harry explained it didn’t matter that my wife
would lose her job when we moved, I trusted him. “Just as long as she works now, you’re
fine. The bank won’t bother checking
once you move.” I reasoned Harry had no
reason to sell me a lousy mortgage, and we bought a house and moved to New
Hampshire. We didn’t listen to him about
what we could buy, choosing a home far cheaper than what he told me we could
afford. In hindsight, it was one of the
best decisions we ever made.
Midway through watching the film 99 Homes, I felt sick. Homeowner after homeowner gets evicted, and
as Michael Shannon, the bank’s hatchet man, and his key henchman, played by
Andrew Garfield, talk to the families getting tossed from homes they no longer
own, I hear over and over how no one knew what they were signing, not
comprehending their mortgages would adjust to unaffordable levels. If not for a few gut instinct decisions a few
years after buying our house, I could have been in that exact situation, ducking
the Sherriff, pleading for one more day, blaming the bank and, of course,
Harry, for putting me and my family in this mess.
Two recent
films, 99 Homes and The Big Short, are an excellent view
into this nation’s worst financial mess since the 1930s, capturing the causes
and effects of America’s Great Recession, a societal, economic and political
monsoon of ignorance, greed and blame.
The films use micro and macro perspectives of the housing crisis at the
root of the entire mess. The Big Short looks at the macro forces
at work, telling the story of a handful of investment bankers and fund managers
who realize before anyone else that America’s housing market and the big banks’
aggressive decisions to invest in mortgages are built on soggy ground. The movie tackles very complex topics
(mortgage-backed securities, credit default swaps, synthetic collaterized debt
obligations) and compares them to things we simpletons can grasp, like fish
stew and blackjack. Halfway through the
film I couldn’t help but think of Harry trying to sell me a mortgage I didn’t
qualify for and could never afford. The
Florida real estate brokers in The Big
Short are portrayed as a notch below seagull guano, and when they brag
about how they earn only $2k on a fixed rate mortgage but $10k on an adjustable
mortgage, Harry’s friendly coaxing seemed less so in retrospect.
99 Homes takes the up-close, micro stance
of the housing crisis. The depiction of
evictions is so visceral you can’t help feel anger, sadness and
resignation. Rick Carver, the film’s
chief antagonist played by Shannon, says things like, “I know this is a very
painful time,” and “I didn’t kick you out – the bank did,” as he, together with
sheriffs and his crew of day laborers, give families two minutes to gather
their things before they’re told to move to the other side of the sidewalk
because they’re now trespassing on the bank’s property. The film paints a dark picture of the human side
of the Great Recession, and it’s one that’s tough to forget. When Carver says, “America doesn’t bail out the losers – America was built by
bailing out winners,” I realized the same line could have been used at the end
of The Big Short when Ryan Gosling’s narration
explains that even after 6 million families lost their homes to foreclosure,
and over 8 million jobs were lost, leading to a loss of $5 trillion from
everyday people’s savings, retirement account and investments, very few
systemic changes were made to help avoid the same mistakes in the future.
My generation grew up with “Greed
is Good” at the movie theater and “Poverty Sucks” posters on our dorm room
walls, and maybe that’s why the bankers, brokers and government officials lost
their collective minds more than a decade ago, making one bad bet after
another, ignoring the reality that millions of lives were at stake in their
gambit for profit.
A few months after I’d fixed
everything, just as the rest of the housing market was cratering, I called the
bank where Harry worked. I wanted to
connect and see what his perspective was on what was happening. They told me he was long gone, only the smell
of cologne and cigarette smoke lingering over all the bad deals he made for would-be
suckers like me.
