Debt Where Credit is Due… By Whitney Farmer – Un Pop Culture

August 24, 2011 Whitney Farmer 5 Comments

Whitney runs a rock music venue on the beach in L.A.. She has an M.B.A, and uses a calculator from the 99cent Store.

I used to be a mortgage banker. The owner of the company had a hairstyle like Wild Bill Hickok and original Maxfield Parrish artwork in his office.  Since I had once bought a print of “Knave and Girl at the Oven” with my first paycheck that I had earned that didn’t come from my parents’ restaurant, it was a foregone conclusion that we would get along well.

Our office was is Seattle, but I commuted in from and worked a service area an hour north. Many of my Microsoft-serving colleagues would taunt me about the type of deals I did because the towns I worked were farming communities: the properties were often not typical for a mortgage-backed securities portfolio, and the customers were hard working but often didn’t have the financial rewards to prove it. I did deals that others couldn’t and reaped rewards for the work: A couple would tell me that they were the first in their family line to own a home…a family would leverage their property to pay for a bone marrow transplant for a cancer-battling son…a family would be the first to experiment with straw bale construction and create a showplace.

One of the challenges I would address on a file would be the credit report.  They were almost always inaccurate. And if they were accurate but negative, they rarely displayed the fullness of the story. There was no indication of a sudden freak accident, a brutal illness, a good business idea that failed, a layoff due to a global circumstance…I would work with report generating agencies to make the reports accurate and to display the full truth of my clients’ stories.  Every iteration of a report would be given a letter in order to keep track of which one was the final that would be submitted to underwriting. Most of my colleagues would run a report and then submit this first raw version, or “A”. If it worked, they closed a deal and cashed a paycheck, or if not, their clients walked away declined.

I once closed a deal on version “Q” of a credit report, the 17th and final revision.

What I learned from developing files able to tell a story that would win an investor was that anyone is vulnerable to hard times. Anyone who wants to brag that they are bulletproof doesn’t have a very rich imagination or is very inexperienced. And arrogance can lead to strategic errors. Google “Rupert Murdoch”…

There is a strange blessing that is facing our culture as our financial cookie continues to crumble. We can become wiser, and braver, and more compassionate.  Wiser because we will learn how to travel in a territory of vulnerability that wasn’t expected even if contingency plans were put in place. Braver because we will learn how to live our lives while overcoming a damaged reputation and changed dreams. Compassionate because all of us may learn how the other half of the world lives, and experiencing anguish is an effective first step to developing empathy.

As the Justice Department descended on Standard and Poor last week to begin a criminal investigation on their favorable ratings of fundamentally insolvent mortgage-backed securities, cries that the federal investigation is payback have found no sympathetic ear.  S&P personnel were paid richly for giving a gold stamp to pooled investments that consumed the assets of present and future generations when they failed. Rather than try to stand on the merits of their actions, the key players including the CEO of Goldman Sachs are lawyering up. Undoubtedly, they want to stay out of prison in order to roll around naked on their pirate booty.

The same agencies that might be determined to be populated with criminals are the same agencies that write the script that drives the credit markets. That script with its assumptions and consequences trickles down to the individual consumer. These are the agencies that say you aren’t worth the risk. By association, they are the ones that rarely make a distinction between a bout with cancer being a fundamentally different risk variable to a compulsive shopper. Both change a FICO. A declined application carries the weight of a message that expands from a request being denied to, “I’m not wanted.”

There is a legend about Francis Albert Sinatra regarding the time in his life when the wind got knocked out of his career. It was the early 50s and everything had changed after a decade of tremendous success. He once complained that he wasn’t even successful at committing suicide during these years of humbling failure.  The legend states that he took what would become his Oscar-winning role in “From Here to Eternity” for scale just to get a job that might jumpstart his career. And the legend states that Sinatra was sleeping on couches before the Mob hooked him up with a regular job in Vegas.  And the Happily Ever After ending is that he became SINATRA and said that he was grateful for those times because he learned who his true friends and enemies were…and he would remember which was which when he became Chairman of the Board.

One of the worst thing a country or a person can do is accept a curse and agree with the voices that attack a reputation and steal hope.  Guard your tongue, and bide your time.  Eventually, truth comes out and the meek shall inherit the earth after the proud fall.  A FICO is not you. Over time, it loses its grip just like old people. I know: One of my most successful arguments in championing clients’ files with underwriters was to remark on how long ago trouble happened, and how different life has become since that stormy time. A time of jubilee when all debts are cancelled is an historic principle that speaks as much to business acumen as compassion: Experience leads to strength that is bankable, and everyone can remember with private awe what it felt like to be granted a do-over sometime in their lives. There is economic power on both sides of a forgiveness equation.

As the water rises and the bill collectors slander and the banks say no, use your all of your strength to keep your head on straight and clear. Look around the new territory and find out who you can trust and depend on, who loves you. That alone is worth the cost. Learn from any mistakes you might have made, but more importantly, learn to cry for others who have gone through these storms.

And in the end, when you tell your story, make certain that it is version “Q”.

Quote of the Blog, from Frank Sinatra, Chairman of the Board: “Cock your hat – angles are attitudes.”

NOTE: The previous post of this blog was an incomplete draft. This version is the final.
R.MAHERAS and REG: Read THIS one, and let me know what you think…