Finance

Escrow is Hell

~ msnarky ~ 1 Comment

Story 51 of 52

By M. Snarky

Selling or buying a house should not be as complicated or as protracted as it is, but this is what happens when the regulators make up the rules and regulations, and, um, regulate things. It appears to me that the rules are primarily intended to extract as much money as possible from your bank account during the process. For example, this is the fee list from the house we are currently financing:

Title – Closing/Escrow fee
Title – Courier/Messenger Fee
Title – Document preparation fee
Title – Loan Tie In Fee
Title – E-Recording Fee
Appraisal fee
Lender’s Title Insurance Fee
Owner’s Title Insurance Fee
Archive Fee
Messenger Fee
Wire Fee – Escrow
Wire Fee – Title
Originator Compensation to Lender Fee
Underwriting Fee
Credit Report Fee
Tax Service Fee
Recording Fees
County Taxes

Courier and messenger fees—really? All of the paperwork thus far has been electronic! Anyway, to comply with all of these rules and regulations, escrow is part and parcel of buying and selling real estate and is something that cannot be avoided: It is deliberately and unavoidably baked into the process, I think, mostly to benefit the banks who apparently consider real estate buyers and sellers as ATM’s.

Now imagine this: You’re in Tiffany & Co. to purchase an engagement and wedding ring set for the love of your life. The ambient music is pleasant, and your inner voice sings along with the tune as you tap your foot in time. You peer into the expertly lit glowing cases of exquisite gleaming jewelry and spot the perfect set.

The Tiffany’s associate pours you a glass of Cristal champagne and describes the ring to you in detail. She talks about the rare jewels and the platinum setting and the quality and the famous Italian designer and slips in that the traditional budget guidelines suggest spending 2–3 months’ salary. For a man that makes $100K a year, this “suggestion” equates to $25,000, that is, as long as you don’t cheap out. Makes me wonder if the jewelry industry invented this budget guideline. Also, $25K seems like a lot of money for something that fits on a finger and has no other practical use than to indicate to society that someone is married, happily or otherwise.

You begrudgingly agree to the exorbitant spending guideline, but since you don’t have $25K cash sitting around in your checking account, you opt for Tiffany’s financing at 25% APR for 5-years. You fill out the 75-page application (is it really necessary to take your fingerprints and ask for your blood type, dental records, and sexual orientation?) and provide the requisite three personal references, you know, just in case you turn out to be a deadbeat and they have to send out Vito and Tony to, um, collect the merchandise.

The Tiffany’s associate never talks about how you’re also financing the sales tax, and it just becomes a line item on the contract:

Fancy Ring: $25,000.
9% Sales Tax: $2,250.
Net Sale to Finance at the Bank of Tiffany: $27,250.

The financial reality is that you’re going to pay $799.82 per month for 5-years, and now that fancy $27,250 ring is going to cost you $47,989.41. I certainly hope the marriage outlasts the monthly payments. Realistically, you can buy a decent new car for $47,989.41, which seems to be much more practical purchase.

Three hours later, the paperwork is done, the contract is signed, and the fancy ring goes into the fancy Tiffany Blue box…but instead of handing the ring over to you, the associate puts the ring into the safe for 30-days.

In that 30-days, they’ll comb through your application. They’ll call your bank, and call your references, and call your boss and ask if you’ve ever been employee of the month. They’ll call your doctor and make sure that you didn’t lie about your blood type. They’ll call your kindergarten teacher and ask about your attendance and academic records. They’ll call your auto mechanic to make sure that your car maintenance hasn’t started slipping. They’ll even call your mother to ask if she approves of the person you intend to marry.

Indeed, you do not get what you were hoping for—like that killer dopamine hit or the instant gratification rush of holding the Tiffany & Co. ring of your dreams in your sweaty little hands NOW! Instead, you get vetted first, and are forced to wait for delayed gratification later. If everything checks out, on day 30 you get the ring and might possibly live happily ever after. If not, you get nothing but a negative hit on your FICO score.

The previous scenario would be ridiculous and outrageous if retail purchases actually had to go into escrow, right? However, when it comes to buying a house, this is exactly how escrow works—you agree to pay for a house now, but you do not get the house until much later, that is, if you’re lucky enough to survive what the Real Estate Industrial Complex throws at you. This is how escrow operates.

In the meantime, while “in escrow” (interchangeable with “in exile,” if you ask me) you are filling out reams of paperwork, and it just keeps coming at you faster and faster, and you find yourself jumping through flaming hoops like a circus chimpanzee on Heisenberg’s Blue Sky crystal meth. You’ll have little time for anything else. You may need to resort to using performance enhancing drugs just to keep up with it…Blue Sky, anyone?

Throughout this entire escrow process, there are all sorts of tripwires and pitfalls and land mines that can blow the entire deal up in your face. One missed deadline or a bad report or one lost document or one missed signature or one single disagreeable person in the chain will bring the entire gargantuan escrow machine to a grinding, screeching halt. Of course, everyone will blame you.

Then there are the inspections of various sorts, and the appraisals, banks, lenders, insurance, current bank and savings account balances, current credit card balances, three months of banking records and five years of tax returns, plus all of the city, county, state, and federal forms to fill out, and more contingencies than you can shake a stick at, all of which have additional fees, of course.

Then you have the throngs of brokers, agents, sellers, buyers, contractors, CPAs, etc., all with their hands out as you walk down the long line of them doling out their various fees. They are all very friendly and professional and smile and shake your hand and congratulate you as they extract their cut from you. I tried standing at the end of the line to get mine too, but by the time I got there, the bank account balance was $0.

I blame the lawyers and the bankers and the politicians for purposefully wedging themselves between me and the purchase of a house and forcing me to pay all of them while I’m also obligated to endure all of this escrow paper shuffling voodoo nonsense. Makes me wonder what the environmental impact of escrow is. I’m guessing it’s the size of a house.

When escrow hopefully eventually “closes” (suggesting here that escrow is in-fact an open wound), there will be much relief. It will also be a time to celebrate surviving and enduring the hellish escrow process, er, change that to, it will also be a time to celebrate a new home. Cheers to that!

Oh, and I hope the person who invented escrow lived a short and miserable life.

Instagram: @m.snarky
Blog: https://msnarky.com
©2025. All rights reserved.

Ultimate Middlemen  

~ msnarky ~ Leave a comment

Story 33 of 52

By M. Snarky

Politicians. They’re just built different. From what I can gather, their (he/him/his, she/her/hers) “job” consists of the following:

  • Convincing the people that they should be elected mostly because of some sort of affinity for something that the people care about (based on polling, of course): a strong military, American jobs, the economy, entitlements like Social Security, Medicare, etc.
  • Convincing the people that they need to be protected from some bogeyman du jour, often made up out of thin air, but generally some evil foreign entity.
  • Convincing the people that the opposing political party is to blame for everything bad that is happening while also engaging in bad things themselves.
  • Convincing the people that raising taxes (i.e., taking even more of your money) is a patriotic thing to do because it helps out our country, our sick, disabled, poor, and elderly in one form or another.
  • Convincing the people that they are getting the biggest slice of the tax dollar pie as possible (i.e., government handouts).

Being that most politicians started out as lawyers, they are highly skilled at this convincing business. Maybe there is some truthiness to some of this convincing, but the jury is still out regarding actual truth. In reality, much of it are noble lies.

What politicians avoid talking about is their cut, er, I mean the cost of running the government, whom, apparently by design, have made themselves the ultimate middlemen because nothing happens unless they get their cut first.

You work. The government takes some (too much, actually) of your money in the form of taxation. The government divvies up the tax money amongst the various departments. In the meantime, throughout this entire divvying process, they always get their cut, and they always take their cut.

Now I’m going to use some very simple math here to prove my point because I’m fairly good at simple math. I also like to use infographics to support a topic, so here we go…

I think this is how most people think the government works:

The tax dollars flow in and are distributed to the various programs. The various programs assure that the recipients get their money.

But this is how the government actually works:

You see, the tax dollars flow in and are distributed to the various departments who then distribute it to the various programs, with each level of government taking their cut along the way before the money finally gets to the recipient who, by the way, is not always a sick, disabled, poor, or elderly person as you have been led to believe. Recipients also include multi-million dollar incorporated farms and billion-dollar industries, like Big Ag, Big Pharma, Big Oil, the automotive industry, the aerospace industry, and various military industrial complex companies to name a few. I abhor this last point because I cannot stand the thought of my tax dollars going into the coffers and pockets of wealthy businessmen.

The politicians will tell you that those companies need the tax money to keep Americans working, stay competitive, and “create jobs,” as the popular political speech goes. This also happens to go directly against free-market principles and the government should not be meddling in this space – let the market (i.e., the people) figure out who the winners and losers should be – not the politicians receiving massive donations from these large corporations. But they do, and this meddling skews basic economics so much so that a rocket scientist can’t even figure out the math.

Many (too many, in my opinion) of your tax dollars get consumed by the black hole of bureaucracy itself and, to me, it appears to be an inverted Ponzi scheme. Or maybe an organized crime syndicate.

The actual percentage of the government cut are hard to track because the black hole of bureaucracy is also really good at obfuscating this kind of information, but it appears to be somewhere “estimated at about 5%,” according to the Cato Institute. I know what you’re thinking, “Shut the hell up, Snarky, it’s only 5%!” To which my reply is, 5% of the annual U.S. government budget of $6.75T (that’s trillion, with a “T”) is $337.5B, some of which, by the way, has to be borrowed because the government has a spending problem – oops – I meant to say because of budget deficits. Hmm, the last time I was in a budget deficit I ended up in bankruptcy court.

So, $337.5B divided by the 2025 U.S. population of 348M (rounding up) is $970 (rounding up again) for every man, woman, and child in this country. Okay, so I’ll just write out a $970 check for everyone in my household to the IRS and I’m done for the year, right? Not so fast, Snarky: this math is much, much too simple – you’ll need to use the official U.S. government math to get it right or you risk having your assets seized and going to prison. You see, you’ll have to apply the 6,871-page U.S. tax code (75,000 pages after the U.S. Treasury’s official interpretation of the tax code) to figure out who actually pays what, plus file your annual tax return. This is absolutely ridiculous and borders on insanity. This is all in an attempt to make sure that you pay your ever increasing “fair share” of taxes which never actually feels fair at all.

In the meantime, city, county, state, and federal politicians are all perpetually scheming on how to take even more of your money for more government jobs programs which will also cost more money in and of themselves. Stuff like increased or new sewer taxes, refuse taxes, energy taxes, toilet taxes, storm water runoff taxes (yes, Los Angeles taxes us for rainwater), ad infinitum. Us taxpayers are perpetually under attack and will die a death of a thousand taxes. Keep in mind that these are also the same people that can vote to give themselves raises. Try to do that that at your job.

In reality, it is glaringly apparent that we can’t afford ourselves anymore, so maybe it’s time to apply some basic economic principles to the government, like cutting a lot of unnecessary expenses, for example. But we will get convinced that this can’t be done because government math is obviously different than all other mathematics combined – including rocket science.

One last point here is who do you think those millions of city, county, state, and federal government workers are going to vote for; the politician talking about cutting the size, scope, expense, and power of government, or the politician championing government jobs and how they must be protected and even expanded? Unfortunately, it’s the latter, not the former. Obviously.

Don’t get me started on government employee labor unions and collective bargaining agreements where the taxpayer is virtually powerless. This, however, is simple math: They demand a raise and/or more benefits or threaten to go on strike, the politicians capitulate, and in the end, you’re going to pay more taxes.

If “Taxation without representation is tyranny,” how is representation with ever increasing taxation not outright theft/coercion? How about some representation with less taxation? Just asking questions.

Maybe the politicians should just be called Ultimate Meddlemen?

Instagram: @m.snarky

Blog: https://msnarky.com

©2025. All rights reserved.

You Can Finance That

~ msnarky ~ Leave a comment

Story 27 of 52

By M. Snarky

I heard a commercial on the radio this morning about financing corrective eye surgery which got my attention – not because I was in the market for the procedure – but because it seemed to me that if you can finance your eyeballs, you can probably finance anything, right? This got me to thinking about this current trend of financing all of the things all of the time in today’s instant gratification society here in the good ol’ US of A.

The euphemism for this is “buy now, pay later” (BNPL) which is dominated by fintech companies like Affirm, Afterpay, Klarna, Sezzle, and Zip. Each of these companies has their own flavor of terms, but you should probably read the fine print carefully and choose wisely or that $25 box of Best Cat Toys Ever will end up costing you like $1,000 and the money will get sucked out of your bank account faster than a politician denying sexual misconduct allegations.

Financing traditional big-ticket items like cars, trucks, RV’s, and boats makes perfect sense because most people don’t have the $60-$100K (or more!) of loose money lying around to buy them outright. But, if you’re going to finance something, you better pay attention to your FICO score, or you’ll get nailed with a significantly higher interest rate. This is where the salesperson will ask you, “What do you want your monthly payment to be?” This is also how they bury you with 120 payments at 15% interest and now that $100K RV will actually cost you $193,601.95 over ten years, but you got the RV of your dreams, right?

But nowadays you can finance small-ticket items too like appliances, tires, teeth, computers, smartphones, cosmetic surgery, weight loss surgery, shoes, clothing, jewelry, camping gear, guitars, hardscape, office equipment, and pretty much anything else you can get on Amazon. Apparently, most people don’t even have a few thousand bucks lying around to pay for what they need…or what they want. Therein, I think, is the underlying problem.

The thing about financing all of the things all of the time is that if you fall on hard times and miss a payment or ten, the finance company will dispatch repo-men who will descend upon you like green bottle flies on fresh dog poop to repossess what technically (legally, anyway) belongs to them, of which you obviously can no longer afford, like the car, boat, diamond ring, eyeballs, teeth…stuff like that.

And now you are forever labeled as a deadbeat and your FICO score will drop faster than the value of a memecoin.

Instagram: @m.snarky

Blog: https://msnarky.com

©2025. All rights reserved.