Monday, April 21, 2008

Amy passed!

Amy passed her Series 7 test today!! She got an 80% of 250 questions!

She passed! She passed!

She was so worried. She studied and prepared night and day for three months.

She did it!

Friday, April 18, 2008


A 5.2 magnitude earthquake (originally a 5.4 but they downgraded it several hours later) hit southern Illinois today at about 4:37 am.

It did shake me, however, I thought it was our darn cat scratching at the end of the bed again. I did not put it together until I saw the news. There was no real shaking or damage that we noticed at all.

Mostly this is because I went through a bigger earthquake in February 2000 in Washington. That was a 6.8--I was at work on Bainbridge Island and remember the shaking, the feeling of moving through the wave. Amy had it worse--she was actually driving on the Tacoma Narrows Bridge just as it hit, scaring the hell out of her and bringing up memories of Galloping Gertie.

I have heard news reports of 14 aftershocks although I haven't felt any. And they say it could get worse.

Tuesday, April 15, 2008

The things they do behind your back

This is my classroom:

Hilariously, this is exactly what kids do when your back is turned.

On Fridays, we have a late start so that the teachers can have some common planning time and have staff meetings and such. While first period doesn't start until 9 am, the kids still arrive at school right around 8 am--they can't change the bus route to accommodate for the time. I almost always have my classroom door locked. The kids usually just wander the halls or stay in the cafeteria. They always hate it because they just want to put their books in the room and sit down. I left it open on this Friday featured here in this video for some odd reason.

The funny part was that when I came back and caught them, the first thing I said was "This is exactly why this door is locked on Friday mornings."

Weber & Karfunkel

One of the students at Midland is quite a good musician. He is folk rock and really dives into the roots of Simon & Garfunkel, hence the name.

Everyone simply must listen to these songs.

Wednesday, April 09, 2008

My Perspective on The Mortgage Crisis

I was employed in the mortgage industry from 1997 to 2001. I was a loan processor. The funny thing was that I was never supposed to be there.

I was an out-of-work road construction laborer, waiting way too long for a new gig. That spring, I signed up at a Temp agency to get some kind of money in my pocket. One day, about 11 am, they called to see if I could go answer phones at Paradigm Financial Services that same afternoon. Reluctantly, I went. It was already 11--I wouldn't get there until 12--for only a few hours work. I still had to go for the money.

Anyway, I got there, got asked to come back the next day, and wound up staying with the company for two years, before moving out to Washington in the summer of '99. I started out at reception and filing, moved to loan processing, and ended up in charge of the entire closing department. I created all the final loan papers that people had to sign. That's right, all those documents, sometimes 50 pages worth. For years, I created docs. I know what they have to sign inside and out because I would have to create the disclosures, especially applicable to individual loan programs in accordance with the lenders that Paradigm sold the loans to. I know the docs.

I also was there at the beginning of the internet effect on mortgages. Fannie Mae and Freddie Mac had their individual loan programs that you could run a borrower through. If you could get an approval, you packaged up the paperwork and sent it in for underwriter approval. And if you could prove what was run through the loan program, they couldn't deny it or change their minds. You just had to prove what was being run through. Sometimes, I could brag about getting people approved at an almost 50% back-end ratio. That's debt-to-income. That's before groceries, insurance, gas, etc. I know what it takes to get a borrower approved past this system.

That's why I have no patience for this current mortgage "crisis."

These borrowers all know what they are getting into. Every single borrower on the loan reads and signs the paperwork that explains in detail exactly what happens.

Some loan programs had borrowers receive grant money for the downpayment. Some loans seriously had Zero down, with no savings. Some loans were ARMs. That's where it gets really messy. They don't have to approve it at the worst possible scenario.

I know what the loan officers say to these clients. I have heard it hundreds of times. They tell these borrowers who, like voters, sometimes have no idea what they are doing, that the initial interest rate is great. "You can refinance it out in just a couple of years." "Yeah, that's the interest rate cap, but that's just worst case scenario. The rates will never get that high."

These are salesmen remember. They sell stuff. In this case, they are selling a loan package. They get their money for it. I knew a guy that could make about 5% of the loan in commissions because of certain deals and programs. And if they can put the borrower into a certain program, they get bonuses. They quote higher rates above the par price to make extra. What really gets me about all of this is that individual loan officers are not licensed.

Let me repeat that: individual loan officers are not licensed.

The mortgage company is licensed, but not the individuals. My wife Amy had to be licensed by the state to be a hairdresser, and loan officers, who handle hundreds of thousands of dollars, are not licensed.

So rate-hiking loan officers put ignorant borrowers into programs that they shouldn't be in. They can't refinance an ARM less than two years later because there is no equity in a house when you don't put any money down. Rates go up. They get stuck.

But the borrowers knew full well the ramifications of the loan. Do not let any of them tell you differently. They just didn't think that the rates would go up, just like I didn't think that gas prices would ever reach $3.30.

Quite possibly, the worst of these new loan programs was the interest only loan. Some lenders offered the option of letting the borrower choose to pay only the interest each month. Theoretically, it is a great idea. For instance, a construction worker can pay only the interest in December, January, and February when he isn't working and make double payments in June and July when the money is really good. Theoretically. But you know what happens when July comes only choose to make the regular payment. Then next month. You have to make so many regular payments a year. If you push it off, you get behind real fast.

Some people can do this with their money. Some can't. That's why for some borrowers I was still setting up an escrow account even though they didn't have to have one. Theoretically, you can make some money in interest for yourself if you put that money away each month. But if you forget, twice a year you have to pay a huge bill for property taxes you haven't saved for. Escrow accounts will save it for you.

Borrowers are to blame. There were some bad loan officers too. Programs were developed that probably never should have been offered. Ultimately, the borrower signed the paperwork. That's why there are 50 pages at a mortgage closing, most of them repeating the same thing over and over. They signed it several times.

Just another practial application of why reading is important.

1984 is more relevant than ever

I started teaching 1984 by George Orwell to the seniors this week. I know they have just over a month of school to go (last day is the 21st of May) but I still find it to be the one book that school teaches that is referenced on a daily basis in the news. I get Yahoo! email alerts every day with some kind of reference to "Big Brother," "Orwellian," or "1984." Every day.

It's now more relevant than ever, especially with the protests going on with the Olympic torch and the Beijing Olympics. Talking about World War II seems way too old for these kids, yet showing them a quick CNN video about Chinese military arresting protestors in Tibet just last week makes it more relevant:

Also, I found a way to specifically show how China blocks web access to its dirty little secrets, effectively erasing history. This is the Wikipedia page on 1989's Tiananmen Square: If you go to this website called Websitepulse at and plug that Wikipedia address into the box, it tests the server from two locations, one in Seattle, one in Shanghai. Guess what? The Shanghai one returns in empty response from inside China. They have effectively erased that piece of history from people within China. Just like 1984.

Then we watched a few cool YouTube videos that came up in my research:

This is the original Macintosh 1984 ad:

This is a new version that portrays Hillary Clinton as Big Brother! Perfect! (Even though I was very careful to mention to the kids that I was just showing how powerful these ideas are, even in present day situations--I never talk about my personal political affiliations in the classroom.) Notice that the end says, although I do not believe this was an official Obama ad--it was probably done by an overzealous Obama supporter.

1984 is probably more relevant today for trying to preventthese types of things from happening than ever before.

On a sidenote, the English Department chair at my first teaching gig at South Kitsap High School always lauded the ubiquitous references in popular culture of Hawthorne's The Scarlet Letter. It was the only single novel that was mandated to be taught in that high school--absolutely no choice in the matter. I personally believe in its power, but perhaps at a later date in life, after kids have lived a bit, kids who have no idea about the permanence of marriage, the concept of adultery, about passion in general. I hated that book in high school, kids still hate the book in high school; however, I absolutely loved it when I reread it at the age of thirty in order to teach it. I personally believe that 1984 is a more appropriate novel to mandate. The political conversations alone that I am getting into with the seniors, all of whom now are at least 18 years of age--voting age, is more completely worthwhile than The Scarlet Letter.

Tuesday, April 01, 2008

Repeat performance

Good news! Remember how nervous I was to present to the other teachers about MAP testing on that teacher inservice day?

Well, they need me to do another repeat performance after the next round of MAP tests in April. The new principal said that it is good information and I did a good job, so do it again.

That's great! Much better than them saying that I stunk and someone else should do it. Definite confidence booster.