Moments D718: Home Equity & Consumer Loans - SOLD

 This evening on my way home from work, I made my way over to the local pet store.  You see, with Heini away, I'm looking in on her kitty.  With such short notice of her departure, she doesn't have enough food for the poor guy, and so I set out to find some.

Not so interesting, but it does explain why I didn't head straight home to study for my coming final exam.  Wednesday is coming too fast!

The moment that stands out today is during this ride from Heini's apartment to the pet store.  This isn't my normal trek home, nor is it one where I am looking for a vet along the way.  (Kitty's food is a prescription diet.) So, of course, I saw something I've never seen before, on nearly my front doorstep.

It was a store front for Home Equity and Consumer Loans and in the front window was a sign that said it was "FOR SALE" and just under that, a big orange sticker on the window sharing that it was a POWER OF SALE.

Of course, I had a good giggle to myself. Of course a company that was set up for home equity and consumer loans was being sold under a power of sale. OF COURSE!

(For those of you who don't know what a power of sale is when a mortgage contract authorizes the lender to sell the property in the event of default (i.e when the mortgage payments are missed), in order to repay the mortgage debt.)

See the irony?  The company was lending out money to customers based on the equity in their home (i.e payments made towards the principal cost of the home) which essentially increasing the overall mortgage on the home so customers can buy more stuff.  That's one of the worst kind of loan to offer as risk management is a tough to estimate.  (After all, money spent on "stuff", typically is not used as an investment, it ends up being a loss and the customer ends up struggling to pay off debt.  Add in possible changes in the value of a home and it's rocky!)  So - are you surprised that the business is being sold as a power of sale?

Nope.  Me neither.  

And it made me giggle for a couple of reasons:

Moments seeing the irony in a financial business being sold under a power of sale.
Moments knowing that most people won't find this overly amusing.