Most direct marketers sneer at the Neanderthal direct mail approach of mortgage companies here in the States.
And hardly a day goes by we don’t get a refinance offer or line of credit offer in the mail. Their approach has been nothing short of unimaginative, robotic and wasteful…yet highly effective. The lure of cheap money has been a commodity that produced its own demand.
Now, the bubble is bursting but this time the mess is so big, the mortgage companies are collapsing alongside their illiquid customers.
Today, I got a home equity line of credit offer from my mortgage company and I’m seriously thinking about taking them up on it…while it’s still available. Their stock shed another 7% this week and it’s been reported that 1-of-8 of their customers are delinquent or defaulting.
But I won’t be using the line of credit for traditional purposes.
Since I’m already shorting them, I’ll use the line of credit to short ’em some more. They’re already halving our monthly payments so why not give ’em a chance to pay off the whole loan.