Special offer

What if Buying a Loaf of Bread was like Getting a Mortgage?

By
Mortgage and Lending with Advantage Mortgage

The majority of the blogs or articles I have read about new mortgage regulations are boring and the message is lost amidst confusing jargon and an endless collection of acronyms. Most people don't buy a home or refinance a mortgage every day so the topic itself is not on the radar screen very often for consumers. But, what if something very ordinary carried similar scrutiny and oversight? What if. . . .buying a loaf of bread was like trying to get a mortgage?

You've heard that bread prices have come down considerably and that your local grocery store has an oversupply of bread. Wheat bread, white bread, organic flax-seed bread, bran and thistle - whatever you can think of, it's 40% off! Now is the time to buy it and if you buy it before Friday, the grocery store will give you a coupon for double the price of your bread. You can't receive the coupon until after you file your tax returns but hey, it's a great deal.

When you arrive at the store and ask for the price of the bread an employee tells you a price cannot be given until you fill out a questionnaire and answer six questions. Depending on how you answer the questions, the bread may be more or less expensive. In addition, you have to commit to a particular loaf of bread before you can be quoted the cost. This makes shopping for bread confusing because you can't compare costs for the various loaves. After a couple of minutes, you have completed the form and are ready to go to the check out line.

On your way, a helpful store employee rolls her eyes and tells you that before you can finish your purchase an independent expert must be called in to validate the value of the bread. The employee can't choose someone from the store so she has to bring someone in from Albertson's. Eventually the expert arrives, fills out his forms and leaves but it turns out that he is actually from the meat department and wasn't really familiar with bread at all.

All the paperwork appears to be in order but before your bread purchase can be completed, you have to wait four hours before the transaction can be completed. It has been found that people who purchase bread too quickly might be getting in over their heads and might not be able to pay for other necessities if the cost of the bread is too high. In addition, the store has to make sure that the final price for the bread is within 10% of the original price or the whole process starts again.

Eventually your purchase is complete and you leave the store somewhat puzzled as to what just happened.

Sometimes my wife wonders why I am so tired when I come home from work. . . .

Vickie Nagy
Coldwell Banker Residential Real Estate - Palm Springs, CA
Vickie Jean the Palm Springs Condo Queen

Bread is likely to have even less demand if the newly suggested Food Pyramid is adopted. It would be great if there were a similar solution to the availability of financing.

Jun 16, 2010 06:40 AM
Mark Aalto
Advantage Mortgage - Portland, OR
NMLS: 116708

I would argue that financing would be the most important part of a "transaction pyramid" although I'm sure that many would disagree.  My frustration is that so much of what is being added to our lives as mortgage professionals neither aids the consumer nor does anything to improve the process.  It's a hot political item and it appears that politicians are more concerned about being able to say they did something about the problem as opposed to understanding what the problem truly is.  We need more participation from true experts in this field. 

I laughed at your comment but I don't know of a way to cut back on financing in the same way that a consumer could cut back on bread consumption.

Hope you are well and thanks for the response.

 

Jun 16, 2010 06:49 AM