This is what will be coming out in the world in a few yearsAugust 22nd, 2014 at 9:22:51 pm
College Freshmen say some weird things, but this one I never heard a player say before.
"This is called free odds and is the best bet in the casino as it has no edge."
"Is there a way to bet evens?"
Asking a square for a square but not the square the square thought..........June 28th, 2014 at 12:42:48 pm
I know I'm a square, but.......
So I'm by the garage with my dad, ladder on the house, getting ready to cut a board board for a shelf for an A/C unit. This black girl is walking down the alley and asks, "do you have a square?"
Immediately I think she is talking about a carpenter's square, as is my dad. She quickly senses we didn't get it and said "cigarette." I politely replied we didn't smoke and she moved on.
Now, I do know what it meant. But my thought is a person on the street is asking about a carpentry tool.
Am I that big a square?
Blackjack at a Prom, 2014April 28th, 2014 at 10:59:10 am
"Blackjack" was spelled out vs the initials "BJ" to avoid any confusion like last year.
The kid says, "I just realized this is our Prom and we are sitting here playing Blackjack."
So I am thinking to myself, "and????????"
Assuming the powers that be kept booze out, and no reason to think otherwise, it is the most I have seen non-drunks hit on 18, soft or hard. For some time this would drive me nuts, but lately I have found some kind of Zen at the table and simply DUAD.
Mortgage Greed? Part II--Mortgage Fees and the "greedy" people they supportSeptember 24th, 2013 at 1:13:36 pm
There is always talk of banks and the "fees" associated with getting a mortgage. A residential mortgage will run you about $3,000 or so in fees, more if you pay points to buy down your rate and maybe some "paid outside closing" fees, which you often have to pay even if you do not close.
Lets look at all this "greed" more closely and who the money goes to.
Your first step is to apply for the loan. There may or may not be a fee here. When there is, people often complain about paying $20-50 just to apply then pay more fees and interest. While this might smart, the fact is a mortgage application is not the same as an auto or credit card application. Pulling credit alone can cost $7. The application takes some time to enter, and if it needs to be looked at by an underwriter that person must be paid. The chances that a person will never close the loan are great, so all of this sunk cost may be lost. $50 is probably the real cost to just get your loan moving.
Your appraisal, processing, and underwriting will cost on the order of $200-450 each. $400 for an appraisal? $400 to process the loan? That money must be going to some greedy, overpaid person--right?
Well lets look at things. The appraiser by law cannot be directly chosen by the lender anymore. So he or she is giving a fair chunk of that $400 to the service that hired them. This appraiser is going to be an independent contractor. This means car, gas, license, health insurance, error insurance, and G&A all comes out of their kick. There is no paid vacation and no paid days off. You do not work you do not eat. And there is no steady supply. This week may be booming and next week dead. And while they may just spend an hour at your home taking photos there is another 2+ hours getting comps and preparing the report. More than one appointment has canceled at the door. When work is not steady you simply have to score more when the work is there, and when you are not hiring steady you have to pay rack rate.
The processor does not have life much better. Same deal with feast or famine. The processor may work for the bank as a real employee or may be an indie as well. If they are an employee they need to generate $400+ per day to cover their wages and other costs. If they are an indie they need to have a home office and as the abstractor they must provide everything for themselves with no time off. Realistically they need to generate almost the same $400 per day. One file a day finished day after day is not easy. And they only get paid when the file closes! All the work to get to final underwriting but to be declined is wasted effort and materials.
At every step this repeats. Abstractors and signing agents need to make $75-100 per order because they may only be able to do 2-3 orders a day. And they like all the rest only get paid when they get work. Yes, the life was chosen even if they "backed into" it. This does not change what they need to earn to make a living.
Then there is the salesperson who got the process moving. A very good salesperson gets 3-5 deals a month. This person needs to hold licenses and take ongoing training. 1/8 of a point may lose a deal.
Add it up and of that $3,000 the bank has $1600+ in labor without the salesperson. They may make $1,000 on the front end of the deal, but this is still 1-2% margin only. How many businesses have margins that low?
Mortgage Greed? Part II--Mortgage Modifications and why they are not working as plannedSeptember 12th, 2013 at 5:50:24 am
A California City has taken steps to seize underwater mortgages. This comes amid several years of asking why the "greedy banks" will not help keep people in their homes. But lets examine what is involved, what really happens, and why it rarely works out.
First how we got here.
In 2001 the USA was it the beginnings of a natural recession due to the end of a long boom and collapse of the "what were we thinking" dot-com bubble. While high by today's standards, mortgage rates were a historically average 6-8% or so. Then 12 years ago yesterday, the shock of all shocks came and scared the nation about everything.
The Fed cut its discount rate immediately after 9-11 and the era of cheap money started. With the fall in mortgage rates that followed it, housing became more and more affordable. Home buyers are "payment buyers" and instead of pocketing the savings most people bought more house. More and newer. Anecdotally I remember noticing that just about everyone else my age was buying new homes, not older stock. Either custom built or in a new plan. They wound hardly consider anything else. Many new mortgage products from 80/20 to neg-am popped up, being used incorrectly 98% of the time.
Those that owned homes saw their value increase a great deal. The Home Equity Loan industry never saw, and may never again, such good days. Debt was piled on, and everyone simply expected the"prime" rate on their loan. I processed many loans at prime or below. But by 2006 the Fed decided, correctly, that the economy was doing well again and it was time to get back to more normal rates. This was called "taking away the punch bowl." The prime rate went from 4-6%. People were so shook up that I had to explain to my boss' boss that what we were seeing were "normal" rates and late in 1999 the prime rate was about 9%.
But what happened was when mortgage rates went up by 1% the payments on a $100,000 home went up by almost $100 per month. Not only could the average home buyer not buy as much house, the speculators had a harder time carrying the loan. Housing demand proved to be very elastic, and prices declined in some places while crashing in others.
So here we are. Now the call is "keep people in their homes!" But this is the wrong answer. The better answer is "find a way to get them out and into something they can afford." Here is why. Individually there is call to "modify" the mortgages. Jerry Homeowner is six months behind on his mortgage, the bank cannot take partial payment for various reasons, and he is unable to catch up. So he calls the loss mitigation department to work things out.
Most of Jerry's payment is interest and escrow. The bank cannot forgive the escrow, this is money owed in taxes and insurance. Likewise, the mortgage has been sold, as we saw yesterday, so the interest is not the bank's to forgive. But it can all be "recapitalized" and paid in a new loan.
The bank will add up all the interest, taxes, and insurance in arrears from the payments. They take the total and add it to principal owed. The new amount is then recorded with the county and often Jerry will be given a competitive rate at today's pricing. Sounds good? Not to me!
First, Jerry is a deadbeat but is being given among the best rates on his loan. Second, Jerry now probably owes more on the home than he bought it for! I have seen many times where the "new' mortgage is 110%+ the sale price of the home! Finally, Jerry is still in a home he cannot afford! Perhaps he lost his job as an exec at his trucking company, perhaps he never could afford the place. It does not matter. All the other costs of ownership are still there. With his other debts, Jerry can be one flat tire from disaster.
Now, to the city thinking they can just seize underwater mortgages and make a better deal with the homeowners. There is a word for this, "communism." The homeowners made a deal, now they think because it was bad they should be able to change it. If you were a banker, would you ever loan money for a house in this town again? What would stop them from doing it a second time. A
And it is just not right. Banks are people. Would you accept going to the ATM and seeing 1/3 of your funds gone to pay for this? Because if you support it that is what you are asking someone, somewhere to do.
Five years in and still a mess. If we let the foreclosures happen yes, people would have to move. There would be disruption. But I guarantee there would be lines of people waiting to buy the foreclosed units, and make it all productive.
Greedy banks? Not here.