A (2:37)

Well, someone suggested that maybe second mortgages are actually worse than car loans. And I'm just Trying to get to the bottom of this, figure out what the real number one wealth killer is.

B (2:46)

George, I. Listen, I just don't have time. I don't have time to be on your little crime podcast. I'm sorry, I. How did you even get here?

A (2:54)

Okay, thanks so much. Bye. Bye. Thank you. So helpful. Okay, so Rachel wasn't going to be of much help, but luckily I'm a bit of a personal finance junkie, so. I already knew what a second mortgage was. It's a loan taken out on a home that already has an existing mortgage, one that's still being paid off. And it has a couple of aliases. Sometimes it's called a home equity loan. Sometimes it's called a home equity line of credit, or a heloc, a term that conjures images of some kind of claymation space monster from the movie Coneheads. People take out second mortgages to tap into their collateral. Collateral, which really just means they borrow against the equity they've built up in their home. They use the cash for renovations to pay off other debts or who knows what else. But here's the thing. A second mortgage is also debt, so you have to pay it back. And interest rates for second mortgages are usually higher than rates for primary mortgages, so it can really put a strain on your income. Oh, yeah. And since the second mortgage is secured by your home, if you don't pay it back, you'll lose your house. So, yeah, they're pretty bad. But I still wasn't convinced. Second mortgages are the number one wealth killer. And I kept thinking about that YouTube comment that sent me down this rabbit hole. Who Was guys here? 13? What information did he have that led him to believe this? I went back to his comment and clicked his name to check out his profile page. Nothing. No profile photo, no videos posted. The only thing there was a collection he had created of Graham Stephan videos. And then it hit me. What's up, Graham? It's guys here. What's up, Graham? It's guys here.

B (4:19)

What's up, Graham?

A (4:20)

It's guys here. What's up, Graham? It's guys here. Could it. It's a long shot, sure, but could it be that just maybe. Guys fear 13 is Graham Stephan, like, a secret account he uses to comment on other people's videos anonymously? So I called Graham. He was in the middle of making iced coffee. He picked up on the first ring because we're tight like that. Hey, Graham, it's George.

C (4:51)

Hey, I'm sorry, Who is this?

A (4:52)

It's. It's George Camel. We made a couple of videos together. You. You endorsed my book. I've been to your house.

C (4:59)

Uh. Oh, yeah, the sign felt cars rip off. Yep, I remember that.

A (5:04)

Thank you. Yeah, that's me. I told him about the YouTube comment and how I had speculated it could be him. Once I said it out loud, the whole thing felt a little silly.

C (5:12)

Yeah, that's me.

A (5:14)

Are you Serious? You're is here 13?

C (5:17)

Yeah, just a burner account I use.

A (5:20)

So you left that comment on my video on July 9th?

C (5:22)

I think so.

A (5:24)

He had a remarkably clear memory of what happened that day.

C (5:26)

Yeah, I remember that day. My fish died. It's really sad.

A (5:29)

Oh, my goodness. I'm so sorry for your loss.

C (5:32)

No, it wasn't because of the fish. It was because Jack flushed it. And that flush cost money.

A (5:36)

Oh, my goodness. It's the most grand thing I've ever heard. Well, back to the matter at hand here. Do you really think second mortgages are America's number one wealth killer?

C (5:44)

I wouldn't say it's the number one wealth killer, but it is dangerous. It raises your overhead costs and I think it's very easy to get out of control because oftentimes a lot of lenders will give you a large line of credit and it could be dangerous if you don't know how to properly handle that. I personally, I wouldn't recommend it.

A (6:02)

He had a point. Personally, I don't even know that many people who have taken out a second mortgage. I needed some data, some hard numbers, and I knew exactly who to ask. This episode is brought to you in part by Tello, a mobile service provider designed to be affordable so you can use your money for what really matters to you. Telo offers the same high speed nationwide coverage you get from one of the big three providers. They have plans as affordable as $5 a month. And you can get unlimited everything for just $25 a month. I know that's unlimited everything for not very much. There's no contracts, no sneaky fees. And you can also upgrade or change plans whenever you want. Check out Tello today and see how much you could save. Get an extra $5 off the unlimited data plan during your first month of service by going to tello.comgeorge or by using the link in the description. That's tello.comgeorge. this episode is also brought to you by online bank Laurel Road with their High Yield Savings account. Your money earns top tier apy. Right now, that's a butt ton of apy. Pardon my French. Other perks include no Minimum balance requirements, FDIC insured deposits, and no monthly maintenance fees. Pretty great. I know. And thanks to their premium care team, you can talk to a real living human being. If you need help, so make your money work harder for you. Go to LaurelRoad.com George or click the link in the description to get started. That's LaurelRoad.com George. Okay, back to the show. Okay, so at this point, I'm realizing I don't even know that many people who have taken out a second mortgage, which led me to assume it's not very common. But I needed some data, some real numbers, and I knew exactly who to ask. Hey, Siri, how many homes in the US have second mortgages? Here's what I found. Read it to me. This page is not set up for me to read. Okay, so Siri wasn't going to be much help, so I Googled it instead. 5.76 million. That's how many homes in the US have second mortgages. And that's a lot of people and a lot of homes. I mean, more people have car payments than second mortgages. But noted, it's a lot of people taking on a lot of debt. And it's hard to build wealth when a huge chunk of your paycheck is going to debt payments. So yeah, this is clearly a wealth killer. But is it number one? And if second mortgages are so bad, wouldn't people realize this and just stop doing it?

D (8:17)

Well, here's the deal. Behavior is a language. So if you're taking out a second mortgage, that speaks volumes.

A (8:25)

That's Dr. John Deloney. He's a mental health expert, he's got a PhD in counseling, and he's a national best selling author. And fun fact, he's a failed actor with an IMDb page featuring this show. He's also my best friend.

D (8:36)

We're not friends at all.

A (8:37)

So, John, are you saying there's a direct correlation between second mortgages and narcissists?

D (8:42)

God, no. That's. It's not, it's not what I'm saying at all. Even remotely close.

A (8:49)

Okay, so we weren't quite on the same page, but he got me thinking. If behavior is a language, what are you saying when you take out a second mortgage? But before I could ask, he had a question for me.

D (9:02)

I feel like we're, we're slowly going down a toilet drain. Do you have an ending for this?

A (9:08)

Of course I have an ending. We're going to come to an ending today. It's just throughout this process, I'll have Moments where I come to a conclusion in my mind and then I find out a new piece of information and I'm upended. Information like this from the Consumer Financial Protection Bureau. Apparently there are these second mortgages that people thought were forgiven or satisfied long ago, and they're reappearing like they're back from the dead and collectors are threatening to foreclose on their homes. They're calling them zombie mortgages. Scary, I know. So where does this leave us? After all this searching, all this digging, I've come to realization there's no point in trying to come up with a number one wealth killer. Because you could come up with 100 wealth killers. And so what? Bereft of more facts, more data, even the soberest, most likely culprit holds no more water than the most harebrained. In the search for America's number one wealth killer, all speculation is equally speculative. But here's what we do. Second mortgages are debt. And more debt equals more risk. We also know a lot of people have them. While we don't know the full impact this has on those individual homes and families, what we do know is that those people are collectively paying a butt ton of interest. Pardon my French. And that's money they could be using to invest and build wealth. But instead, these second mortgages are squeezing the middle class and artificially propping up a life they can't afford. So if you ask me, tapping into your home equity is not the move. If you need money for home improvements, vacations, cars or education, you'd be much better off saving up until you can pay cash. I know it takes time, but it's better than being slowly crushed under the weight of crippling debt. Well, we may not know for sure what the number one wealth killer is, but if this episode helps even one person avoid getting a second mortgage, it was all worth it. Serial Numbers is a production of this American wealth Killer and the Ramsey Network. Special thanks to Graham Stephan, Rachel Cruz, Siri, and my best friend, Dr. John Deloney. I'm George Camel. Thanks for joining us.

D (11:09)

I'm not your best friend.