This week’s essay is something that everyone who is an adult (or thinking of becoming an adult) should read. Even if you read through Mortgage Origination Channels for UberNerds without understanding anything in it you will still benefit. At least you will have an idea of what it is that you do not understand about how mortgages work in this country.

I am not saying that every adult should read this essay because of the all the problems that mortgages are currently causing in the economy as whole. Rather, it is the way that all this complexity can personally effect you that makes this a must read. Indeed, the one flaw of this essay is that it does not spell out clearly how this can all go wrong for the consumer.

For example, let us say that you take out a loan with bank a. Now let us say that bank a sells the servicing rights to your mortgage (and if you don’t know what servicing rights are that is why you need to read the essay) to outfit c.

Now remember that most mortgages require you to pay your property taxes in with your monthly mortgage payments. This is to protect the people who loaned you the money from having the house get sold for back taxes. If that happened they would losses their money without having any recourse.

With that in mind, let us say that outfit c neglects to put the money you are paying towards your property taxes in the escrow account like they are suppose to. When the tax bill comes due, it is not going to be paid by outfit c. You will most likely be unaware of this until you receive notice that unless you pay the back taxes and penalties, your house is going to be put up to auction by the tax man.

All this because of the actions of a company that you never even signed a contract with.