Last winter my wife and I realized we could pay off our mortgage within the year, if we wanted to. Technically it's a loan on a co-op apartment, not a mortgage. Whatever, we took it out twenty-five years ago. It was an adjustable-rate loan, which turned out to be smart: Back in 1985, the Federal funds rate was about 8% and our loan cost about 12%, as I recall. Though interest rates have bumped around a bit, they've mostly gone south; that, combined with better terms we negotiated during one trough, meant that we were paying about 3.6% at the end. Through most of the period, I kept paying the same round sum, nicking away at the principal a little bit more each month, till suddenly we looked up and could see the Emerald City. "Let's burn the mortgage!" we said.
That turns out to be more easily said than done--probably because it happens so rarely. Archie Bunker burned his mortgage. But most people move within a few years-they pay their mortgage with the proceeds of the sale, and put it into a new loan on a new house. Others refinance, often with a different lender. Owning a home free and clear became so odd that, in the midst of the financial crisis, an NPR team went looking for people who'd paid off their mortgages and was met with laughter from a mortgage broker. As subprime lending exploded into the Great Recession, the volume of foreclosures became so high that banks and law firms invested in gigantic (and often sloppily and sometimes malevolently run) foreclosure factories that were a scandal as early as 2008. Foreclosure is very 21st Century. But to pay off your mortgage is so ... so ... 1930s--so much so that banks seem to operate that part of the business with quill pens and green eyeshades.
Indeed, though we didn't move, our mortgage did. The original lender, The Dime Savings Bank of New York, was bought by Washington Mutual in 2002. For 15 years, till 2006, WaMu swallowed other banks as if they were hotdogs at a speed-eating contest. WaMu loved subprime loans, and worked mightily to dispel any stuffy-banker image. The bank even created "Action Teller" dolls of the Barbie-and-Ken type. (I'm not making this up. For years I had one in my office. You can find them on line for about $40.) In 2003, a year after buying the Dime, WaMu's CEO Kerry Killinger said, "I think if we've done our job, five years from now you're not going to call us a bank."
The second half of the sentence was right: in September, 2008, WaMu became the largest bank failure in U.S. history, and its assets, including our little co-op loan, were picked up by J.P. Morgan Chase.
So it was to Chase that I made my request for a pay-off quote. I called at night, of course. Does anyone today pay a bill by daylight? The automated system informed me that I was "ineligible" for a payoff quote and would have to call during regular business hours, blah, blah. When I did, a perfectly nice, imperfectly trained woman took my information and put me on hold for what seemed like a long time; she returned, apologized for putting me on hold and thanked me for my patience, and told me that I had a co-op loan, as if I did not know, and that it was for an apartment in New York, a fact of which I was also aware, and put me on hold again, longer; she returned, repeated word for word her apology, and asked with whom I was refinancing. I pointed out that the balance on the loan was about $2,500 and that I was paying it off, not refinancing. This information was bewildering; I went back on hold. After the third identically phrased apology, I learned that she would pass my request to a special desk--I believe in Ohio, though I could be imagining that--that would send me the quote, but only by fax or by mail. A little rigamarole ensued while she filled in a form for the august Ohioans, and we bade goodbye.
The morrow came and with it a fax and a quote. It included a $30 fee for the fax. I did a brief calculation of my hourly value, thought, "Fuck it," fired up Firefox, and fired off the dough. I then shot an e-mail to an address specified on the fax -- firstname.lastname@example.org -- to request the return of my collateral documents. The bank has the original of our proprietary lease for the apartment. I wanted it back, not just because it is mine but because I am curious to know whether, after these peregrinations, the document is the bank or in the Fresh Kills landfill.
My e-mail bounced back. I tried again, a prudent step given my typing, and it bounced again. I returned to the phone. A better trained employee explained that my loan was a co-op loan originating in New York. She wanted to know with whom I wished to refinance it. I explained that I had called because of the dead e-mail address. She put me on hold. A brief while later, she repeated her predecessor's apology for the delay. Word for word. This felt oddly comforting. She then assured me that I didn't need to pay any attention to the bank's own instructions to send an e-mail asking for the lease. It will be sent. Automatically. Trust us.
photo courtesy flicker user blackdenimgumby