My friend Amy’s mother has a saying: everything works out for the best. But sometimes when you’re in the middle of a really aggravating situation, it’s hard to see how that’s anywhere on the horizon.
I was reminded of this when I got an e-mail recently with the noncommittal subject line “Hi.” E-mails with that subject line are either from really close friends or really complete strangers.
When I opened it, I found myself reading a solicitation to refinance our house from a guy whose name was strangely familiar (I’ll exclude it here to save him even more embarrassment). It took me only a moment to realize who it was and where I knew him from.
Nine years ago, in the midst of the last recession, we were attempting to refinance our house with the Bank of America, an institution that I’d patronized for 35 years. That’s 35 years, not 3.5 years. Unlike so many other properties around that time, our house was not underwater; it had lost much of its appreciation, certainly, but we were in search of a lower interest rate. Unfortunately, my freelance income had also dropped, as it tended to do during recessions, and even though my spouse was still gainfully employed, the bank kept stalling and stalling, asking for more and more documentation. The guy who’d e-mailed me was the loan officer we had been working with, a guy who seemed absolutely powerless to intervene on our behalf and get the bank to either refinance or just flat out turn us down.
Finally, asked for one insane piece of documentation, I just said no. We ended up refinancing with another institution, and in high dudgeon, I closed all my Bank of America accounts: checking, savings, credit cards, and brokerage.
When I closed the Merrill Lynch brokerage account, I was surprised to see that almost half of my money was invested in Bank of America stock. I was surprised that that was even legal, but it turned out that it’s not illegal, because Merrill Lynch was a division (or subsidiary, or something) of Bank of America. It may have been unethical, but it was not illegal. That was in 2008.
As this wonderful transcript from NPR recalls, Bank of America had bought a mortgage-lending company called Countrywide Financial the same year. NPR called this “quite simply the worst deal in the history of the financial services industry.” The following year, 2009, as the recession deepened, it turned out that a lot of Countrywide’s mortgages were not just bad, but black, mushy, squirting rotten banana bad. Bank of America lost $40 billion on the Countrywide deal, and its stock dropped 90 percent.
Which didn’t bother me anymore, because I no longer owned any.
It’s for situations like this that the Germans coined the word schadenfreude.
As I disclosed in 2013, we jettisoned the financial institution we moved our accounts to and went back to the Bank of America. I did not open another Merrill Lynch account, though.
I thought about just deleting the e-mail from the mortgage broker (who is now with still another financial institution), but I replied and told him that because of this reverse windfall, I really should thank him. But no, I wasn’t interested in his help in any sort of refinancing.
And Amy’s mother is still right after all these years.