Angry American: Who Owns My Mortgage?

It's been just over two months since the Fourth Corner relocated from Washington, DC to Alexandria, Virginia. A first home was purchased, tax breaks obtained (god willing), and mortgages packaged and sold. Then sold again.

To understand where our mortgage is requires an economics degree. Our mortgage rate was handled by First Savings Mortgage. Through them we negotiated the interest rate, worked with a person we could actually get on the phone, and felt pretty content that if there was ever a problem, we knew who to call.

A week after the house purchase, First Savings Mortgage sold our mortgage to Wells Fargo. You may wonder how Wells Fargo could afford to purchase our mortgage, considering they still owed the government $25 billion dollars in TARP money (to be paid back this month, they are the last big bank to do so).

We now write our checks to Wells Fargo. We know no one at Wells Fargo. We have never banked there. The only indication of this was a letter in the mail, that offered us the ability to set up automatic payments on Wells Fargo website, where the only payment option was "pay full amount first day after due date". I still don't know what that means.

So, today, I opened up another letter, this one from Freddie Mac. I don't know who the fuck Freddie Mac is, but he's the guy that now owns my mortgage. I don't pay him, I still pay Wells Fargo, but apparently Wells sold Freddie my mortgage. All I know about Freddie and his girlfriend Fannie is that they were behind the recent recession (along with Wells Fargo), and frankly I'm miffed that nothing has changed.

I understand banks need liquidity. I understand credit is essential to a healthy market. But does it not stand to reason that First Savings Mortgage should be inheriting all the risk? It's a localized bank, meaning that if it went under, only Alexandria residents would be in the tank. They are the 'closest to the ground' and did all the assessments to determine if I was good for the loan they gave me.

Wells Fargo and Freddie don't know anything about me. All they know is that First Savings said I'm a good bet, and that they should bet on me, too, thus freeing up First Saving's capital to make another loan. Why not sell straight to Freddie? Why have an intermediary? Why disassociate the risk on a national level where we as a collective whole are putting our eggs in one national basket? Pardon moi, but does that not seem like a dumbfuck thing to do?

States and counties stand to gain the most from a healthy real estate economy, not the federal government. It's states who impose property taxes, and as such, it's local governments that should be moderating how their lands are bought and sold. Similarly, it's local banks that should be inheriting the risk. Credit can still be bought and swapped at a more localized level without jeopardizing the entire system. Yes, the profit margins won't be as high, but it will also deny banks the ability to corral so much credit and capital that they become "too big to fail."

So First Savings Mortgage, take my mortgage back. I'm good for it. If you had kept my mortgage I'd be paying you a sweet penny every month. Instead you blew your wad and went for the lump sum by selling it to Wells Fargo, a too-big-to-fail behemoth that fucked us all in the first place. And instead, now I'm paying Wells Fargo who I'd really prefer not to. You've taken the customer out of the equation, which is pretty impressive, but you've managed to take logic out of it, too. Here's to another go around!