Friday, May 30, 2008

Book Publisher Wanted - Guaranteed Best Seller

My non-working hours were spent looking at houses my wife had found during the day.
Initially we tried to work through a real estate agent recommended by Rav, but after
making little progress, we decided to strike out on our own and find the house we wanted.

The first weekend on our own, we found a house just north of Williamsburg, which is a pleasant, small rural town north of Chicago. We both liked the house, but it was slightly out of our price range and I wanted to do some comparative shopping. A week later, after looking at about ten other houses, we decided to make an offer on the house located just north of Williamsburg. Since the house was owned by a couple who were now living in Tennessee, we had to negotiate a price though the Pabst Brewing Company, who had relocated the owners. After extended offers and counter offers, we came to a price which we felt was just affordable to us and was acceptable to the owners and the Pabst Brewing Company.

In the summer of 1976 mortgage money was loosening up, but sizable down-payments were still the rule rather than the exception. Since we needed 90% financing to purchase the house, we put in several applications for mortgages at banks and savings and loan institutions around the area. While searching for a mortgage, John Mason informed me that Arnold Cline was Chairman of the Board of the Bluefish Bay First National Bank and that he could arrange a mortgage. In fact, John had obtained his mortgage that way.

The next day I spoke with Arnold Cline about obtaining a mortgage through the Bluefish Bay Bank. He said he would look into it and would get back to me. The next day he informed me he had spoken with the loan officer at the bank and had set up an appointment to speak with the mortgage loan officer. Now here was the chairman of the bank and my employer telling me he had arranged a meeting with the loan officer so naturally I assumed we would get a mortgage.

That evening I explained the situations to my wife and the next day she met with the loan officer. I was shocked when I came back from work to the motel room that evening to find Anita crying. Our request had been denied! Anita had worked in banks for over ten years in various positions, and knowing the circumstances of our application, she had fully expected the processing of our mortgage request to be routine. Instead, she had been told we did not qualify because we did not have 20% down. My first reaction was to comfort my wife and to assure that we would get a mortgage someplace else, but I couldn't hide the fact that I too was shocked and bewildered by the unusual turn of events.

A couple of days passed before I saw Arnold Cline again and he laughingly apologized for the “misunderstanding” and said he did not realize we did not have the necessary 20% down payment. I really didn't know what to say to him, and he quickly exited from the embarrassing conversation.

We had no trouble qualifying for a mortgage through another source, and we finally decided to finance the house purchase through the Chicago Federal Savings and Loan which offered us a 25 year fixed interest rate mortgage. Obtaining a good mortgage quickly eased the pain and disappointment of the Bluefish Bay Bank experience, but that incident left me with an uneasy feeling.

We closed on the house on July 15, 1976. That was exactly one month from my first day at work. It was our first house and we had to go into debt, other that the mortgage, to make the finances. My parents lent us $500.00 so that we were able to cover the closing costs. I was not concerned about the debt because I thought I had a good future with Gamma Supplies and at the rate at which housing prices were increasing in the suburban Chicago area, I felt the house was an excellent investment.

But when I purchased the house, I violated on of my own basic tenets. That rule is never purchase a house until you are sure about your job. Once a house is purchased, the new employee is almost locked into their new job for at least one year because it is financially taxing to resell a house quickly. Thus, the purchase of a house is a sign of commitment to the company. This is not necessarily bad, but it gives the company tremendous leverage against the individual.

With the purchase of the house, we were financially broke. I could not have moved if I had wanted to, since I did not even have enough money to buy gas to leave Milwaukee. The reason I was willing to make such a commitment to Gamma Supplies is easy to understand if one looks at my background and my current situation. I came from a lower income family which had rented living accommodations the entire time I had lived at home. Since I was ambitious, I had set a goal that I would own my own home by the time I was 35. This hardly seems ambitious to someone who has grown up in a middle or upper income family, but for someone of my background, just owning a home was a significant achievement.

The costs of homes were skyrocketing at the time and every year the purchase was delayed, the more difficult the initial purchase became. I had what I thought was a job I really wanted, and I thought I had a good future with the company. Thus the purchase of a house seemed to be a reasonable, logical decision.

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