Bill Kousmanides is Speedy Gonzales. He answers emails before you send them. He picks up the phone when you are on the second digit of the area code. He participated in the Caltech Negative Time Run and arrived an hour and a half before he left. His responsiveness is an important quality, because he is a chattel loan broker. He helps manufactured home loan applications get approved. The ability to respond and get things done are to him what agility and balance are to an acrobat.
When he and the Dirtlease founder speak, he asks, ‘How you know so much Greek, Yanni?’
‘I spent a semester on Kalymnos when I was seventeen. I was still young enough to suck up the language.’
‘You’re an animal.’
‘I worked on building sites. Did you know that σκεrπανι means ‘claw hammer’ and σφυρί means ‘ball peen hammer’?’
‘You have a Greek wife or girlfriend?’
‘Nope.’
Imagine the founder’s disappointment when Bill the Closer was not able to approve a loan for two residents in the Dirtlease park in northern New York. At first, the founder was surprised. After Bill sent the numbers, he understood.
Madison and Archie have lived in a lease-option home for four years. He is a mechanic; she is a school-teacher. They are perfect tenants. They have one child, they have never been late with rent, they keep their place clean, and they don’t bother the neighbors. A week ago Mike, the manager at that park, told the founder that the couple wanted to buy the last of the new TRU homes in that park. Their current home is a two-bedroom, he said. The new home is a three-bedroom with space for an enclosed backyard. They want to try for another baby and would like more space.
Since they have been good residents, the founder called Bill to see if he could help move the deal forward. The problem with their loan application, Bill said, was Archie’s credit score and the couple’s debt-to-income ratio. Archie has a score in the mid five hundreds and the two of them have vehicle loans with a total principal amount of slightly more than $80,000 and monthly payments of $2,080. The credit score is just a number, but their debt burden is hard to ignore. Many banks would be hesitant to lend to working people who already owe two grand a month.
“So, what do I do, Kyrie Kousmanides?’, the founder asked Bill.
‘Tell them to call Twenty-First’, Bill said. ‘Or Tammac. Tammac might lend to them’.
‘Twenty-First is a vampire kalamari.’
‘You sure you don’t have a Greek wife or girlfriend, Yanni?’
‘Very sure.’
Looking at the numbers that Bill emailed, the founder noticed that the principal amount of one of the vehicle loans was $55,000. When he saw that, he reflected that (i) the asking price for the home is $53,000, and (ii) the founder’s personal car cost $20,000, after the electric vehicle tax credit. The loan was likely for a truck that Archie used for work, but surely you can buy a serviceable truck for less than fifty-five grand. The founder also thought that, if he worked for NPR or the New York Times, he would write a thousand words about how middle-class items, like a new car and reasonable housing, are out of the grasp of working people now. There is some truth to that, his reverie continued – but fifty-five grand is too much to spend on a vehicle when times are tight.
Here are some ‘You know you are a redneck when’ jokes:
You take your dog for a walk and you both use the same tree;·
You have been in a custody fight over a hunting dog;·
Your grandmother doesn’t have to remove the Marlboro from her mouth when she tells the State Trooper to kiss her ass;·
Your grandmother has ‘ammo’ on her Christmas list;·
Your house has wheels but your car doesn’t; ·
Your truck has curtains but your house doesn’t; and,·
Your car costs more than your house.
Even with their credit score and debt-to-income ratio, we at Dirtlease like Archie and Madison because they have a good track record in the park. We put them in touch with Tammac and Twenty-First, and researched sub-prime chattel lenders. We might even let them move into the new home as a lease-option, even though we are trying to phase out lease-options.[1] When we get a chance, we will counsel them to sell the truck, so that they can buy a home.
[1] We understand that a few chattel lenders lend with recourse to the park owner. This allows them to broaden their lending criteria, but it puts the park owner on the hook if the borrowers default. We believe that this would be the worst of several worlds, because, in the event of a default, title to the home would not revert to the park owner until after foreclosure proceedings. The lien on the title would, most likely, be in the lender’s name, rather than the park owner’s name. In the event that the lender goes out of business or has no incentive to cooperate after a default, this could lengthen the foreclosure process. The eviction process in the case of a lease-option is faster, cheaper and cleaner.