History and Tradition: Thanksgiving and More – Is there anyone who doesn’t know the history of Thanksgiving? We are history rich in our country. Do you have knowledge of how mortgages came to be?

Mortgages can be traced back to England.  The concept made the trip on the Mayflower with the Pilgrims.  In fact, in colonial days and beyond, the typical transaction included putting 50 percent down on a piece of land or property, with the balance due in five years.   Of course, the values of homes were much lower then, but so were incomes.

  • When the Depression fell upon America, the source of funds for mortgages from banks was among the casualties of the times.  Banks had no money to lend and the mortgagors had no money to repay the lenders.
  • It wasn’t until after the Depression that the concept of monthly installment, or amortized payments came into being.  The Federal Housing Administration was created, and loans became insured.  Since the banks had insurance against the borrower defaulting, money became more available.  The 30-year loan became a reality, which provided the consumer with lower, affordable payments.

Prior to World War II, the Federal National Mortgage Association was created to provide liquidity – that is, mortgages were sold as securities, creating a secondary mortgage market.   This also aided the consumer in that rates and terms became more stable, rather than geographically sensitive. 

When the Baby Boomers came of age, the demand for housing skyrocketed, causing quite a housing boom.  Higher incomes, along with the two-income household became more common, and homes became more affordable, or a larger, more expensive home was purchased because the couple would qualify for the loan with both incomes. 

As time marched on, the American Dream was one that not all Americans could achieve, so the government began to encourage a wider range of loans, with less restrictive qualifying criteria.  Mortgage products became more “flamboyant,” and the onset of little or no documentation loans began.  These loans allowed the buyer to provide virtually no proof of employment, income, or assets, and offered a similar rate to the full documentation loans.  Also during this time, individuals who were credit challenged were offered loans that would allow them to purchase their home, often with a “reward” or lower interest rate if they continued to make payments on time for a pre-determined period of time.

Self-employed individuals were able to be approved (many write off a good bit of their income) with excellent credit, or just by showing bank statements to prove the levels of their gross income.  Deductions and business expenses were not considered in qualifying.

We all know what happened in 2007 and 2008 – the credit crisis hit not only mortgages, but also our entire economy.  Many economists are now saying that the recession is over, and has been.  However, the mortgage products available today are similar to those the country saw in the 1970s and 1980s, in that income, asset, and employment information are required on virtually every loan approved. 

Arguably, many of the loans were doomed to fail.  While this can be debated, it should also be noted that many of them did not fail, and many hard working individuals who otherwise may never have had the opportunity to own a home did achieve home ownership. 

 We have much to be thankful for this season – our country did not suffer the horrific economic set back in the first decade of this century that it saw in the 1930s, and while there is still much to be done on the employment and economic fronts, it is reassuring that we have come to a new normal in a short period of time. For those that want a new home, I encourage you to keep shopping, as there are great values out there. Happy Thanksgiving, and remember, “Your Home Loan Matters.” 

Good Grief! – It’s Peanuts Trivia By: Paula Green

 

“In the book of life, the answers aren’t in the back.”

-Charlie Brown

 

       We’ve read their books and comic strips and watched their videos.  For years, folks have been entertained by the adventures of the Peanuts gang.   The creative genius behind this beloved cartoon was Charles Schulz. This month commemorates what would have been Schulz’s ninetieth birthday on Nov. 26. 

       From 1947-1950, his first regular cartoon L’il Folks was published by the St. Paul Pioneer Press.  It featured a character called Charlie Brown.  Schulz derived this name from one of his co-workers at the Art Instruction Inc. [Read more…]

A Veterans Day Salute to the Kuhn Brothers By: Paula Green

      The United States officially entered World War II in December of 1941 following the malicious attack by the Japanese on Pearl Harbor.  During that time, our country was in a state of turmoil, and we decided to fight back.  Because of the mayhem, thousands of men were enlisted in the armed services to defend our country.

     The Kuhn family resided on the North Side of Pittsburgh.  This “band of brothers” had seven boys. Six out of the seven were recruited into the military, older brother Ben remained a civilian.

      Lee served as a Celestial Navigator in the Marine Corps, where he was guided by the stars.  During his training, he finished at the top of his class.  He performed dangerous operations that were conducted at night.  The missions in the Asian-Pacific Theater where Lee was assigned required him to pick up the wounded, equipment and military personnel.

     Mertin enlisted in the U.S. Army where he dutifully served for 13 years.  His bombardier skills against the Japanese earned him an Air Medal award.  This recognition granted him the opportunity to become a pilot.  Tragically, he was killed in a training plane crash in Marfa, Texas.

     Glenn followed in Mertin’s footsteps and served in the Army.  He took part in the famous “Battle of the Bulge.”

      Twin brothers Ray and Frank were recruited by the Army as well.  Ray served as a paratrooper and was stationed in Europe.  During one of his missions over Italy, he was shot in the ankle as he jumped from the plane.  He was awarded the Purple Heart for his bravery.

      Frank was stationed in the South Pacific where he saw action in the Philippines.

      Dale was called to serve by the Navy and was inducted on Aug. 20, 1945.  Upon his arrival at Great Lakes Training Camp, it was deemed that his eyesight was not acceptable for the Navy. 

     “I was given an Honorable Discharge on Sept. 8, 1945.  I often joke and tell people that Japan surrendered on Sept. 2, 1945, because they knew I was coming,” Dale said.

       Dale was drafted once again by the Army on May 29, 1952.  “I informed them of my naval experience and how I was discharged for my vision.  The Army said my eyes were good enough for them.  If you did not serve 90 days or more, you were subjected to be drafted again if another war came along,” Dale said.

        He then went on to serve in the Korean War in Germany for two year in the Signal Corp as a Corporal until May 6, 1954.  Dale is the only remaining Kuhn brother.  He resides in Avonworth.

       Northern Connection magazine salutes veterans Lee, Mertin, Glenn, Ray, Frank and Dale Kuhn for their years of dedication and commitment in serving in the United States military.