Friends Who Live in the Real World
Those among us who indulge a wild passion for some sort of eclectic or specialized pursuit or interest are sometimes confronted with the uncomfortable need to identify a certain friend as either a fellow who shares our own particular passion or a companion with whom we enjoy other activities. For some years, I've referred rather awkwardly to my "Tolkien-friends" and my "regular friends." But now, thanks to my friend Barbara, I have a much better description for those of my friends who don't love fantasy fiction. They are: "Friends Who Live in the Real World."
Real Estate's Woes Spread Throughout Economy
Three recent news stories add additional anecdotal support to my argument that real estate's downturn negatively affects the broader U.S. economy:
- A real estate brokerage in Phoenix shut down all of its 13 offices. The company's closure put 350 Realtors and 20 other employees out of work.
- A federal agency forecast that economic growth in Manhattan will slow in 2008 as a result of Wall Street's subprime mortgage crisis. Local business owners now feel a "creeping sense" of uncertainty about the future, according to a newspaper report.
- Tribune Co., which owns the Los Angeles Times and other media properties, reported that revenue from real estate classified ads dropped nearly 40 percent year-over-year in the four-week period that ended Nov. 25, 2007.
Ouch.
Three Plagues Attack Los Angeles Home
At the risk of considerable embarassment since this blog is indisputably a public forum, I'm ready to admit on the record that my cozy and usually quite clean house in Los Angeles has suffered both an infestation of fleas and an attack of termites this winter. And now, a pest control inspector has found--horror of horrors!--an actual rat that's living in my attic and tearing up the insulation that covers the heating-ventilation-and-air-conditioning system ducts. I've disposed of the fleas in a massive housecleaning that featured multiple vaccuum runs, eight loans of laundry in one day and a trip to the drycleaners. Now I await the exterminators to deal with the termites and the--ahem--other unmentionable intruder. But I have to wonder: What's next? Frogs? Lice? Boils? Locusts? Writer's block?
A Long-Awaited Announcement: Peter Jackson to Produce Hobbit Movie
Fantasy fandom is in an absolute uproar today over the news that Peter Jackson and New Line Cinema have resolved their differences over royalties from the three movies based on J.R.R. Tolkien's "The Lord of the Rings" at least to the extent that the studio has tapped the director to act as executive producer of a much-anticipated film adaptation of Tolkien's beloved children's story "The Hobbit" and a second Hobbit-related film, the basis of which isn't clear at this time.
Whatever else happens, the news of the two new films being green-lighted by the studio and of Jackson's involvement is sadly certain to reignite the intense animosity between the hardcore film fans who passionately adore Jackson's adaptation of "The Lord of the Rings" and the equally hardcore book fans who just as passionately abhor Jackson's films.
Those of us who greatly admire both Tolkien's books and Jackson's interpretive films are no doubt in for another onslaught of rotten tomatoes from both sides. I'll be trying to keep my costume, which is a replica of Eowyn's white gown from Jackson's second movie, safely out of the line of fire.
Whatever else happens, the news of the two new films being green-lighted by the studio and of Jackson's involvement is sadly certain to reignite the intense animosity between the hardcore film fans who passionately adore Jackson's adaptation of "The Lord of the Rings" and the equally hardcore book fans who just as passionately abhor Jackson's films.
Those of us who greatly admire both Tolkien's books and Jackson's interpretive films are no doubt in for another onslaught of rotten tomatoes from both sides. I'll be trying to keep my costume, which is a replica of Eowyn's white gown from Jackson's second movie, safely out of the line of fire.
Recommended Fantasies
My recent discoveries in the fantasy realm include two movies, "Enchanted" and "The Golden Compass," both now in theaters, and one television series, "Stargate Atlantis," now on DVD:
- "Enchanted" is about a fairy tale princess who falls into modern-day New York City. The traditional princess-and-the-prince themes are delightfully updated, yet still faithful to the source material.
- "The Golden Compass" is the first of Philip Pullman's three-book series about two children on a voyage through a parallel world. The film is marred by a too-fast pace, intrusive score and truncated dialogue, but is still enjoyable and essentially faithful to the original. Nicole Kidman is terrific as the bewitching Mrs. Coulter, and yes, that IS Derek Jacoby as the head of the Magisterium.
- "Stargate Atlantis" is about a crew of explorers and scientists who find a lost city that was inhabited 10,000 years ago by a philosophically and technologically advanced civilization known as the Ancients. Some of the story lines are too militaristic for the small screen, but the dialogue is clever, the characters are compelling and the universal themes are thoughtfully presented.
Mortgage Bailout is Big Buzz
The Bush Administration's plan to bail out borrowers who can't afford the reset interest rates on their subprime adjustable-rate mortgages has triggered a massive amount of buzz and not just within the Beltway or the mortgage industry. The man on the street, in the person of my friendly neighborhood dry cleaner, was not only aware of the plan yesterday afternoon, but was also quite outspoken about the obvious inequities of artificially low interest rates for people who borrowed money with too little income or an inadequate down payment to handle the risk. "When we went to borrow the money years ago," he declared, "the bank wouldn't even talk to us if we didn't have 20 percent for a down payment!"
News from a N.A.R. #2: Trade Show Gets Old-Hat
The National Association of Realtors' convention trade show has shrunk in square footage from mind-bogglingly gigantic to merely large. That may be a consequence of this year's weak housing markets or a sign that the concept of a trade show itself has become out-moded in the Internet age. The too-bright artificial lighting, junk food and temporary booths complete with cheesy games, chinzy giveaways and always-on-their-toes salespeople seem old-fashioned in comparison with the advances of technology. Yet the show goes on in all its lavish excess. One exception this year was Google, which had only a modest-sized booth in a relatively far-back location. But that modest presence was belied by the mob of Realtors who congregated around the booth.
News from a N.A.R. #1: Upbeat Mood
Now that this year's National Association of Realtors convention has packed up and left Las Vegas, real estate industry watchers are engaged in their annual back-at-the-office post-N.A.R. conversations of the "s0-what-did-you-think?" variety.
My first observation is that the mood at N.A.R.'s event was not nearly as downbeat as might have been expected given the state of many housing markets around the country.
That enthusiasm may reflect a disconnect between the trade group's perennially rosy outlooks and reality or the fact that Realtors as a group tend to project a professional bias toward optimism.
The happy-talk also could reflect the makeup of N.A.R. convention-goers in that Realtors who are truly feeling the pain of weak housing markets have neither the time or money to spend a week at a convention in Las Vegas while those who are able to attend are more likely to be part of N.A.R.'s massive leadership structure or well-established regulars who rely on N.A.R. events as an opportunity to combine networking with a tax-deductible vacation.
My first observation is that the mood at N.A.R.'s event was not nearly as downbeat as might have been expected given the state of many housing markets around the country.
That enthusiasm may reflect a disconnect between the trade group's perennially rosy outlooks and reality or the fact that Realtors as a group tend to project a professional bias toward optimism.
The happy-talk also could reflect the makeup of N.A.R. convention-goers in that Realtors who are truly feeling the pain of weak housing markets have neither the time or money to spend a week at a convention in Las Vegas while those who are able to attend are more likely to be part of N.A.R.'s massive leadership structure or well-established regulars who rely on N.A.R. events as an opportunity to combine networking with a tax-deductible vacation.
It's All About Real Estate
Two recent news stories lend new support to my earlier argument that real estate IS the U.S. economy:
Gallery Corp., a Southern California-based chain of 52 mattress stores, has filed for bankruptcy protection with assets of $15 million and debts of $20 million on its books, and Williams-Sonoma, a San Francisco-based nationwide chain of gourmet-cookware stores, has posted a 7% drop in its quarterly net income on a year-to-year comparison basis. Both companies cited weakness in the housing markets as one factor in their results.
It's possible that housing was really just a handy excuse for management missteps at these companies. Yet either way, the news reinforces the perception that what happens in real estate doesn't stay in real estate, but instead spills over into the broader economy. The argument that real estate is an island still doesn't hold water.
Gallery Corp., a Southern California-based chain of 52 mattress stores, has filed for bankruptcy protection with assets of $15 million and debts of $20 million on its books, and Williams-Sonoma, a San Francisco-based nationwide chain of gourmet-cookware stores, has posted a 7% drop in its quarterly net income on a year-to-year comparison basis. Both companies cited weakness in the housing markets as one factor in their results.
It's possible that housing was really just a handy excuse for management missteps at these companies. Yet either way, the news reinforces the perception that what happens in real estate doesn't stay in real estate, but instead spills over into the broader economy. The argument that real estate is an island still doesn't hold water.
Food Poisoning at Flamingo Hotel
Earth is not an entirely safe place to live. But among the many dire and worrisome threats that our planet faces is one that merits much more concern than is usual granted: That is, the toxicity of our modern food supply.
The thought is occasioned by a cup of artichoke soup that I purchased last Friday from a vendor at the Flamingo Hotel in Las Vegas. This soup was so toxic that I became severely ill. Unable to return home on my own, I was heroically rescued by my father, who boarded an airplane Saturday morning and then drove my car back to Los Angeles Saturday afternoon while I suffered in the back seat from extreme dehydration and a 101 F fever.
The lesson here is that hungry travelers should be extremely cautious in any place such as a hotel or airport that serves massive quantities of inexpensive food to a highly captive and transitory population as these conditions create no incentive to ensure repeat customers.
During this week of Thanksgiving in the U.S., I'll be grateful for any opportunity to purchase, prepare and partake of food that is not toxic, but rather wholesome, nutritious and safe.
The thought is occasioned by a cup of artichoke soup that I purchased last Friday from a vendor at the Flamingo Hotel in Las Vegas. This soup was so toxic that I became severely ill. Unable to return home on my own, I was heroically rescued by my father, who boarded an airplane Saturday morning and then drove my car back to Los Angeles Saturday afternoon while I suffered in the back seat from extreme dehydration and a 101 F fever.
The lesson here is that hungry travelers should be extremely cautious in any place such as a hotel or airport that serves massive quantities of inexpensive food to a highly captive and transitory population as these conditions create no incentive to ensure repeat customers.
During this week of Thanksgiving in the U.S., I'll be grateful for any opportunity to purchase, prepare and partake of food that is not toxic, but rather wholesome, nutritious and safe.
Realtors Gear Up for National Convention
Realtors may be the ultimate optimists. But can their indefatigable goodwill hold true in a housing market characterized by bad vibes and diminished opportunities? The answer may be found at the National Association of Realtors' annual convention to be held this week in Las Vegas. The venue seems particular apt this year since the gambling mecca suggests a metaphor for today's housing markets: Legions of homeowners try to undo their losing bets on adjustable-rate mortgages while swarms of Realtors pound the pavement in search of evermore elusive buyers and sellers.
Ya Gotta Luv This Real Estate Ad
Somewhere in Los Angeles or beyond is a real estate broker who recently listed a four-bedroom, four-bathroom home along the Venice canals (that's Venice, Calif., not Venice, Italy) for sale at $3.125 million, or $3,125,000 in round numbers.
The owners of this property may indeed tremble in horror when they read the classified ad for their home that appeared in last Sunday's Los Angeles Times. And I quote: "...Full amenities. Green house. Maids rm. roof deck w/spa. Gabled ceilings. Clerestories. Shudders. wood & limestone floors. Master w/closet/study & steam shower."
Full marks for "Clerestories," but "Shudders"?
The owners of this property may indeed tremble in horror when they read the classified ad for their home that appeared in last Sunday's Los Angeles Times. And I quote: "...Full amenities. Green house. Maids rm. roof deck w/spa. Gabled ceilings. Clerestories. Shudders. wood & limestone floors. Master w/closet/study & steam shower."
Full marks for "Clerestories," but "Shudders"?
Robert Crais Gets Real Estate
It's no news to real estate reporters that every story is a real estate story. Yet real estate is rarely the subject of crime novels. That's why I was surprised to discover a real estate angle in a recent novel by Robert Crais, who is undisputably one of the best crime writers at work today. In Crais' new bestseller "The Watchman," which is about the betrayals of abusive fathers, an FBI agent investigating a cartel that funnels drug money to terrorists tells our hero Joe Pike: "Everything happening in the world today is about real estate." Well said. And by the way, the book is terrific.
A One-Woman Teeter-Totter
People sometimes me ask how I manage to balance freelancing about real estate and writing a novel. It's not easy, and after three years of this balancing act, I've thought of an explanatory metaphor: It's like riding a teeter-totter up and down by myself. First I ride up and down on the real estate-freelancing seat, then I jump off, run around to the other side of the teeter-totter and ride up and down on the novel-writing seat. It's hard work and it's not exactly efficient, but at least I haven't fallen off yet.
Mystified by 'Junk Mortgages'?
Last week I wrote an editorial for Inman News (subscription required) about the extent to which real estate is now intertwined with Wall Street and the need for both sides to learn more about the inner workings of each others' markets. With that in mind, I'd like to commend and recommend a terrific article: "Junk Mortgages Under the Microscope," in which Allan Sloan, senior editor-at-large of Fortune magazine, demystifies "GSAMP Trust 2006-S3," a package of mortgage-backed securities issued last year. Read on!
Recommended Fantasies
A short list of my recent fantasy book and film discoveries:
- Solstice Wood by Patricia A. McKillip is a lovely story about the boundaries between reality and fantasy. This book won the Mythopoeic Fantasy Award for Adult Literature at Mythcon earlier this year.
- Night at the Museum is a delightful father-and-son film (now on DVD) about a museum that comes to life after dark.
- The Thief Lord is a family-friendly story (also now on DVD) about a band of children who have a magical adventure in Venice, Italy.
Good Ideas for Mortgage Lending
In the debate over how federal government regulators and lawmakers should respond to recent turmoil in mortgage lending, a few good ideas have emerged:
- Mandatory licensing of all mortgage brokers and loan officers. Licensing should be required regardless of whether the individual is self-employed or works for a mortgage brokerage, savings and loan or banking company and should be accompanied by mandatory continuing education and enforcement.
- Prohibition of yield spread premiums, which are commissions or bonus that lenders pay mortgage brokers when they sell borrowers loans at interest rates that are higher than the lowest rate for which the borrower could qualify. Disclosure of YSPs would not be adequate because loan disclosures are already dysfunctional.
- Elimination of the tax liablity on forgiveness of debt in short sales. This relief should be available only for homeowners who have been forced to sell their principal residence due to a severe financial hardship such as a loss of previously steady employment, disability or major illness. State tax authorities should conform to federal law.
Realtors Lack Sparkle of Imagination
The housing market in my Los Angeles neighborhood has held up fairly well price-wise, but the number of transactions has fallen off a cliff, judging by the scarcity of for-sale signs, the lengthy duration of the few signs that pop up and the steady stream of solicitous Realtors who've knocked on my front door. While I sympathize with their plight, I'm not planning to move any time soon, if ever. Nor do I know anyone who wants to move into or out of the neighborhood. Nor am I all that interested in the unvarying information about recent home sales that every Realtor has on offer. But what most disappoints me about these Realtors is not their diligent prospecting, but the sameness of their pitches. If I were planning to move, I'd want a Realtor with a lot more imagination, especially in a market characterized by a slow pace of home sales.
Otay Ranch Woes Not Surprising
Otay Ranch, a 3,500-acre housing development near San Diego, has been among the communities that have been "hit particularly hard" by the recent housing downturn, according to a recent Los Angeles Times story. The news caught my attention since I visited this development in 2003 during a National Association of Real Estate Editors conference. At the time, my impression of the place was largely unfavorable.
Otay Ranch was being touted as a model of "smart growth" with "native habitat neighborhood parks, protection of biologically sensitive areas, traffic calming roundabouts, walk-through cul-de-sacs, pedestrian walkways and bridges, recreational areas and mixed-use buildings," according to a story I wrote for Inman News.
But the development had a high density of eight dwellings per acre and many of the houses were "boxy two-story structures squished into small lots." The development has no doubt changed over the last four years, but in 2003, I described it as being characterized by "an almost oppressive feeling of sameness on all sides" since all of the houses were painted in slightly different shades of desert brown and the streets were so completely indistinguishable that the developer's representative had to hop off the bus during our tour to glance at a street sign.
Prices were comparable with other communities at that time, but homeowners in Otay Ranch also faced an annual Mello Roos tax of 1 percent of the value of their home for construction of schools, community buildings, transit centers and other infrastructure and association fees of $756 annually for street maintenance, manned gated entrances and upkeep of the landscaping and parks in addition to state property taxes.
Given this bit of history, I'm not surprised at Otay Ranch's current woes. Even smart growth and good intentions don't necessarily produce a community that's an attractive and affordable place to live.
Otay Ranch was being touted as a model of "smart growth" with "native habitat neighborhood parks, protection of biologically sensitive areas, traffic calming roundabouts, walk-through cul-de-sacs, pedestrian walkways and bridges, recreational areas and mixed-use buildings," according to a story I wrote for Inman News.
But the development had a high density of eight dwellings per acre and many of the houses were "boxy two-story structures squished into small lots." The development has no doubt changed over the last four years, but in 2003, I described it as being characterized by "an almost oppressive feeling of sameness on all sides" since all of the houses were painted in slightly different shades of desert brown and the streets were so completely indistinguishable that the developer's representative had to hop off the bus during our tour to glance at a street sign.
Prices were comparable with other communities at that time, but homeowners in Otay Ranch also faced an annual Mello Roos tax of 1 percent of the value of their home for construction of schools, community buildings, transit centers and other infrastructure and association fees of $756 annually for street maintenance, manned gated entrances and upkeep of the landscaping and parks in addition to state property taxes.
Given this bit of history, I'm not surprised at Otay Ranch's current woes. Even smart growth and good intentions don't necessarily produce a community that's an attractive and affordable place to live.
A Sad Day for Real Estate Writers
Inman News today reported the death of Bob Bruss, one of real estate's most prolific and respected writers. I had the privilege of working with Bob when I was employed at Inman News and of meeting him at a National Association of Real Estate Editors' conference some years ago in New Orleans. I know he'll be missed not only for his informative weekly newspaper columns about real estate law, but also for his kindly presence in our midst.
Pirate-Speak
Ahoy, mates! Ter-day be "International Talk Like a Pirate Day," wich be meanin' yer all appose ter yak like ye rule the 7 seas for these 24. And which also be meanin' there ain't no idea too daft to capture the wondrous human imagination. Now if we could just figure out how to say "Arrg!" in Elvish.....
September Reading
Here's a quick list of the books I've added to my reading pile so far this month:
- "Dust," Martha Grimes (unfortunately, I figured out "who-done-it" on page 71)
- "Seven Up," Janet Evanovitch (audiobook)
- "Prince Caspian," C.S. Lewis (audiobook)
- "Solstice Wood," Patricia A. McKillip (this book was an award winner at Mythcon last month)
- "C.S. Lewis and J.R.R. Tolkien as Writers in Community," Diana Pavlac Glyer.
Real Estate IS The Economy
The White House and the Federal Reserve have suggested they'll take a hands-off approach to the worsening crisis in mortgage lending unless the situation appears to threaten the broader U.S. economy. The obvious flaw in this thinking is that housing and lending can't be isolated from the broader economy and that's not just in the U.S., but globally as well. Higher mortgage payments force consumers to stop spending. Car showrooms are empty due to lack of home equity appreciation. New-home builders are stuck with standing inventory. Manufacturers of home products must downsize. Remittances to Mexico dry up as construction laborers are thrown out of work. That's not to say that the federal governement or the Fed should act, but rather that there are consequences for inaction as well.
Copyright Scofflaws
Blatent disregard for U.S. copyright law has become so notorious and widespread on the Internet that some of my real estate articles have been cut and pasted onto other people's Web sites hundreds of times without my permission or payment. What most astonishes me about this complete disrespect of my work is the utter shamelessness of these people (most of whom, I'm sorry to say, are Realtors) who try to argue that their free use of my articles is somehow supposed to be in my interest. If you broke into my home and stole my belongings, how would that benefit me? If I used your services and then refused to pay you, how would that benefit you? If you're not willing to pay for my articles, please don't put them on your Web site.
All Over the Map Indeed
A fascinating map in today's Los Angeles Times shows the August 2006-to-August 2007 rises and falls in median home prices across the Southland, a region that encompasses Ventura, Los Angeles, San Bernardino, Riverside and San Diego counties. What's most striking about the map--apart from the washed-out pink and green colors and its prominence above the fold on page 1--is the degree to which the housing market's gains and pains vary from one ZIP code to the next.
Median prices that top $1 million rose dramatically in such luxury communities as Encino, Pasadena, Bel-Air, Fullerton, Newport Beach and San Juan Capistrano while median prices in the low-$200,000s and mid-$400,000 declined significantly in outlying places like Oxnard, Lancaster and San Berdoo. In between were communities such as Arcadia, which posted a 23% decline in its $739,000 median price, and Riverside, which posted a comparable gain in its $525,000 median.
In my neighborhood, the median price rose 2.1% to $832,500. Wow.
Median prices that top $1 million rose dramatically in such luxury communities as Encino, Pasadena, Bel-Air, Fullerton, Newport Beach and San Juan Capistrano while median prices in the low-$200,000s and mid-$400,000 declined significantly in outlying places like Oxnard, Lancaster and San Berdoo. In between were communities such as Arcadia, which posted a 23% decline in its $739,000 median price, and Riverside, which posted a comparable gain in its $525,000 median.
In my neighborhood, the median price rose 2.1% to $832,500. Wow.
Highly Recommended: "Death At a Funeral"
Don't miss Death at a Funeral. This new film is a genuine farce packed with coincidental, preposterous, irreverent and hilarious story lines that achieves a consistency of laugh-out-loud jokes even with no sex, no violence and a welcome absence of offensive slurs. Plus a memorable turn by Serenity veteran Alan Tudyk. Also highly recommended is Stardust, a lovely fantasy based on Neil Gaiman's novel about a boy who finds a fallen star incarnate. Avoid The Bourne Ultimatum, a tedious mess burdened with headache-inducing camera angles and a plot that's impossible to follow even for those who paid attention during Bourne 1 and 2.
Mortgage Crisis: Foolish Risks and Fraudsters
Many people have asked me about the subprime mortgage crisis, so here's my opinion:
Most of the homeowners who are in trouble with their mortgage either (1) knowingly accepted the risk of an adjustable-rate, interest-only or payment-option mortgage so they could buy a more expensive home or (2) were the victims of fraud, often in form of repeated ill-advised refinancings urged upon them by mortgage brokers.
Those who knowingly took the risk need to suffer the consequences of their short-term thinking. They had the benefit of those super-cheap mortgages and now they need to either pay the going rate or get out of the homes they can't afford to own.
A government bailout would trigger an understandable backlash from homeowners who chose fixed-rate mortgages and renters who declined to accept the financial risk of the new mortgages. A bailout also would teach those who are in trouble (and their children) that there are no adverse consequences for their decisions, a false lesson indeed.
Those who were victimized should have the right to sue lenders and mortgages brokers who committed fraud. There should be an investigation into loan applications that included mysterious phantom income at closing when it was all but too late for the victims to walk away.
The difficulty is to figure out who acted knowingly, who experienced a genuine hardship deserving of assistance, and who was defrauded.
Most of the homeowners who are in trouble with their mortgage either (1) knowingly accepted the risk of an adjustable-rate, interest-only or payment-option mortgage so they could buy a more expensive home or (2) were the victims of fraud, often in form of repeated ill-advised refinancings urged upon them by mortgage brokers.
Those who knowingly took the risk need to suffer the consequences of their short-term thinking. They had the benefit of those super-cheap mortgages and now they need to either pay the going rate or get out of the homes they can't afford to own.
A government bailout would trigger an understandable backlash from homeowners who chose fixed-rate mortgages and renters who declined to accept the financial risk of the new mortgages. A bailout also would teach those who are in trouble (and their children) that there are no adverse consequences for their decisions, a false lesson indeed.
Those who were victimized should have the right to sue lenders and mortgages brokers who committed fraud. There should be an investigation into loan applications that included mysterious phantom income at closing when it was all but too late for the victims to walk away.
The difficulty is to figure out who acted knowingly, who experienced a genuine hardship deserving of assistance, and who was defrauded.
The Truth About Life's Little Problems
My vegetable steamer, stapler, razor and CD player, all of which operate on electricity or batteries, stopped functioning this week of their own accord, without warning and for their own mysterious reasons. And my refrigerator started to leak water and hum in a frizzy electrical sort of way. Sometimes I wonder why my life is constantly interrupted by these sorts of annoying little problems, which take time away from my work and my writing. Then I have to remind myself once again that these little problems don't interrupt life; they are life and the expectation of a life that's free from such little problems is the true illusion.
Why People Have Lousy Credit
Those of us who are fortunate enough to have good credit may wonder (with a soupcon of immodest superiority) why others of us are so unfortunate as to have serious credit woes. The financial causes of poor credit vary from out-of-control consumption to burdensome medical bills, but these financial problems often contain a psychological component as well. In this case, defeatism--the belief that one's ruined credit is permanently beyond repair--is a typical barrier, according to Robin Chandler at my client LendingTree. For more on this subject, watch Maxed Out, a shocking Michael Moore-style documentary about the tragedies of personal debt.
The Existential Angst of Opportunity
I recently walked away from two business propositions: a real estate book contract and a job relaunching the real estate vertical of a newspaper-run Web site. The real estate book market is highly competitive and the compensation so small as to make the book a vanity project. The job offered a "six-figure" salary (the recruiter refused be specific) and benefits, but required a lengthy commute and the perils of full-time employment at a company that's had multiple rounds of layoffs. Still, I can't help wondering: Have I ruined my career or saved my life? Or both?
Back To Work on Real Estate Projects
Today marks the end of a two-month summer break during which I've been working full-time on my novel to the exclusion of my real estate projects. Despite two intrusions (an attack of tennis elbow and a trip to Real Estate Connect and Mythcon), my novel has advanced from 60 pages to 150 pages drafted, an addition of 90 pages in seven weeks. I'd like to thank my real estate clients because without their support this progress wouldn't have been possible.
Writers Workshop No Cure for Procrastination
Yesterday I received an unsolicitied e-mail invitation to join a writer's group on Yahoo! Curious, I looked up Mike's Writers Workshop in the Yahoo! Groups database and discovered it's an award-winning group of more than 8,000 members who've posted an average of 1,600 messages per month this year. I admit I'm tempted by the organizer's promise of "friendship and camaraderie" (how friendly could 8,000 online buddies be?), but I know from experience that writing is by nature a lonely pursuit and rightly notorious for being prone to procrastination for activities like, say, blogging, which elevates procrastination to an art. Should I join Mike's Writers Workshop so I'll be able to procrastinate about my writing by reading 50 messages per day from other writers? Thanks, but I think I'll just write a blog about it instead.
Death: The 'Gift' of Men
One of the world's most beloved authors, J.R.R. Tolkien, died on this day in 1973. He and his wife Edith Tolkien are buried in a single grave in the Catholic section of a small cemetery in Oxford. The inscription on their headstone includes the names of two of Tolkien's most beloved characters: Beren, a mortal man, and Luthien, an immortal elf who chooses mortality for her love of Beren. Death, which Tolkien described both as the "doom of men" and the "gift of men," is arguably the most important theme in his writings.
I had the privilege of visiting Tolkien's gravesite several years ago during Oxonmoot, an annual event organized by the Tolkien Society. It is a spiritually powerful place, full of memory and imagination.
I had the privilege of visiting Tolkien's gravesite several years ago during Oxonmoot, an annual event organized by the Tolkien Society. It is a spiritually powerful place, full of memory and imagination.
Mortgage Rescue Is Right on the Money
Plenty of people have heard me say that the Bush Administration has never introduced a program, policy or plan that I didn't passionately dislike. But at last, that perfect record of bad ideas has been shattered by, of all things, a Federal Housing Administration loan program.
The proposed FHA Secure loans, which are intended to help some 80,000 homeowners escape from burdensome adjustable-rate mortgages, have a lot of smart elements: Borrowers must have a history of on-time payments and sustained employment, 3% cash or equity, an interest rate reset from June 2005 to December 2009 and most importantly sufficient income to make the new payments. The loan cap, currently $362,790, should be raised, as also has been proposed, to $417,030, the current conforming loan limit at Fannie Mae and Freddie Mac. FHA mortgage insurance may be required.
Now that's smart underwriting: If only federal regulators had imposed those rules on lenders all along, this whole mess--and a lot of heartache--might have been avoided.
The proposed FHA Secure loans, which are intended to help some 80,000 homeowners escape from burdensome adjustable-rate mortgages, have a lot of smart elements: Borrowers must have a history of on-time payments and sustained employment, 3% cash or equity, an interest rate reset from June 2005 to December 2009 and most importantly sufficient income to make the new payments. The loan cap, currently $362,790, should be raised, as also has been proposed, to $417,030, the current conforming loan limit at Fannie Mae and Freddie Mac. FHA mortgage insurance may be required.
Now that's smart underwriting: If only federal regulators had imposed those rules on lenders all along, this whole mess--and a lot of heartache--might have been avoided.
Mortgage Mess Turns Ugly for Jumbo Loans
The Los Angeles Times reported yesterday that borrowers are facing more difficulty getting so-called "jumbo" mortgages -- those that are for loan amounts of more than $417,000, which is the "conforming" loan limit these days at Fannie Mae and Freddie Mac. The difficulty is that investors have abandoned the mortgage market, meaning that lenders have few options to sell off loans. What strikes me as bizzare is that a jumbo loan of $600,000 on a $1 million house has a loan-to-value ratio of 60 percent, which seemingly would be a much safer investment than a $417,000 loan on a $450,000 house, which has an LTV of 92.6 percent. And that's without regard to the creditworthiness of the borrower, which should be a fundamental basis of loan underwriting. The jumbo loan squeeze is particularly worrisome for California, where the median-priced home cost $586,000 in July. To qualify for a conforming loan, the buyer of that house would need a downpayment of $169,000. The LTV would be 29 percent.
Is Invisibility Evil?
Why does the One Ring, a Ring of Power, (cf: "The Lord of the Rings") make its wearer invisible? Because we touch on the edge of evil when we keep secrets and hide our true nature from our ourselves and others.
Summer Reading
Here's a quick list of some of the books I've been reading this month:
- "Doomsday Book," Connie Willis
- "The Two-Minute Rule," Robert Crais (audiobook)
- "Pornified," Pamela Paul
- "Then We Came to the End," Joshua Ferris
- "The Fellowship of the Ring," J.R.R. Tolkien
- "Harry Potter and the Deathly Hallows," J.K. Rowling
- "Wyrd Sisters," Terry Pratchett
Blog Announced
You've hinted. You've asked. You've suggested. And now, in response, here is my Official Blog. Welcome!