Arts & Crafts, Part 1

               When I was five years old, I wasn’t too familiar with the difference between right and wrong. That’s probably why I dressed up in my sister’s clothes and microwaved goldfish for kicks. But what I was familiar with at that age was how to do arts and crafts. I spent half my day in kindergarten class with a scissors in one hand, Play-dough in the other, and a crayon in my mouth. To be my kindergarten teacher would have been a breeze. The secret to a successful day was clear, simple, and easily attainable: don’t leave me unattended.

                Despite my constant practice, I happened to suck at arts and crafts. Let’s face it: some people just aren’t gifted. So when I went to work at the chop shop, this was a skill that I was going to have to live without. Fortunately for some of my associates (and unfortunately for you), I was in the minority. They were great at it. There were two echelons of these artisans. Today, we’ll talk about the first group.

The Finger Painters

The Finger Painters were exactly what you’d expect any adult who still painted by numbers to be like. They were lazy and stupid. They thought they were the smartest guys in the room because they simply had no sense. Here were a few examples of their shenanigans:

The Xerox Special: Let’s say Joe the mortgage broker sat you down and walked you through roughly forty documents that required your signature. It was a pain in the ass. Then, throughout the loan approval process, certain aspects of your loan would change. Maybe it was the rate or type of loan. Maybe the fees Joe charged went up. Every time something changed, the lender would ask for new forms to be signed. Instead of interrupting your busy schedule, Joe would take the old version of that form, Xerox it, cut out the old signature and affix it to the new one. Roll that bad boy through the Xerox one more time and…voilà! He’s saved you the hassle. Harmless, right? Sure. Until you got to the closing and the title company was too busy to walk you through the documents themselves. They were there to protect you, and they failed to do so time and time again. Instead, they’d ask Joe to do it for them and still charge you the fee as if they did it themselves. Joe would rush you through the document signing while distracting you with personal anecdotes and joint aggravation about having to sign all those documents again. It would all be over quickly—he’d make sure of that. You’d be out the door in no time and on your way home to shove those loan documents in some back closet. It would all be a distant memory until a month later when your mortgage statement came and it was $1,000 higher than you expected it to be. Then you’d look at those documents a bit closer. That’s when you’d see the extra $3,000 Joe pocketed for selling you an above-market rate and a penalty for getting out of the loan within the next five years.

The Pay Stub Two-Step: This one was easy. Step one was when Joe changed the job description on your application to something more amazing than it was in reality. The airport baggage handler became the Cargo Tensile Engineer. That sort of thing. Then, for step two, Joe took a copy of your pay stub and changed the numbers around so it looked like you made three times what you really did. All it took was a pair of scissors and an Elmer’s glue stick. Eventually someone came out with software programs and websites to make it all the more professional. Joe could have approved you for a mortgage payment three times higher than you could’ve ever hoped to afford. Everyone wins, I guess.

The Credit Cut and Paste: Let’s stick with your guy Joe. You seem to really trust him. There are two ways to go with this trick.

Option 1: Joe pulls your credit. The only thing most lenders really cared about in those days was the credit score. Maybe you’re the sort of person who doesn’t honor your commitments. I’m not here to judge. So what? Your score sucks. Easy fix. Joe would cut out numbers from other places on the credit report (there are numbers everywhere on that thing) and paste them into the right place to give you a better credit score. You get approved for a loan you couldn’t have otherwise gotten, and everyone wins, except the lender. The reason the lender loses is because you end up not making your mortgage payments. And of course that’ll happen. That’s why your credit sucked to begin with.

Option 2: Joe pulls your credit. Maybe you’re the sort of person who has never missed a payment. You’ve got a great score. But Joe goes ahead and cuts your score out and replaces it with a new mix of numbers anyway. All of a sudden, your score sucks. Now, why would Joe do that? Easy answer. Have you ever heard of sub prime loans? Of course you have. The rates for them were much higher than the rates for people with good credit. If Joe can slide you into a sub prime mortgage, he’s likely to make a lot more money by adding on special features to your loan like a pre-payment penalty or a rate that adjusts quickly and often. You might ask: Why would anyone not see this for a ruse? It’s the same reason why I went through kindergarten using right-handed scissors when I was left-handed: I was too embarrassed to tell anyone something was wrong. People tend to want others to think they’re in control, even when they know they aren’t. So they take what they’re given. Don’t believe me? Read the newspaper.

Next time: Arts & Crafts, Part 2. Forget these glue-sniffing, window-licking, finger-painting amateurs. It’s the Masters who really knew how to get stuff done. While the Finger Painters were wondering why glue tasted so different than White Out, the Masters were busy making their own concoction.