Paper Avalanche, In The News

 

From the New York Times today:

June 29, 2009

Paper Avalanche Buries Plan to Stem Foreclosures

By PETER S. GOODMAN

LOS ANGELES — Somewhere on earth, there must be a more difficult task than this: persuading American mortgage companies to lower payments for homeowners who can no longer afford their loans. But as Karina Montenegro struggles to accomplish this feat for a troubled borrower, she strains to imagine a more futile pursuit.

Ms. Montenegro, an intern at a local company that seeks loan modifications, dials Washington Mutual to check on the status of an application for a homeowner whose income has plummeted. She endures a Muzak-scored purgatory while on hold. Syrupy-voiced customer service representatives chide her for landing in the wrong department. She learns that the documents her company sent in have simply vanished — for the third time since November.

“I don’t know what happened,” says a customer service officer who identifies himself as Chris. “I don’t know if there was a glitch in the system, whether it was transferred from one call center to the other.”

Think of the documents as being part of a pile massing inside the bank, Chris suggests. “This pile is not going to be moved forward at any point in time.”

Ms. Montenegro and her colleagues suffer these sorts of excruciating exchanges all day long. It is a potent indication of the difficulties afflicting the $75 billion taxpayer-financed program created by the Obama administration in an effort to avoid foreclosure for as many as four million distressed homeowners.

Under the plan, the government offers mortgage companies $1,000 for each loan they agree to modify, then another $1,000 a year for up to three years.

Hanging in the balance is more than the fate of individual homeowners. The administration portrays its mortgage program as a crucial piece of its broader effort to restore vigor to the economy. If the effort fails, foreclosures will continue to surge and home prices will probably keep falling, sowing fresh losses in the financial system and threatening to crimp credit anew for businesses and households.

Yet in the four months since the Treasury Department announced the program, millions of new homeowners have slipped into delinquency and foreclosure. For now, progress is constrained by the limited capacities of mortgage servicing companies, said Michael S. Barr, the assistant Treasury secretary for financial institutions. He offered the first signs of the administration’s impatience with the institutions that control home loans.

“They need to do a much better job on the basic management and operational side of their firms,” Mr. Barr said. “What we’ve been pushing the servicers to do is improve their infrastructure to make sure their call centers are doing a better job. The level of training is not there yet.”

The administration still does not know how many mortgages have been modified under the program. In a recent interview, Mr. Barr estimated the number at “over 50,000,” explaining that precise figures must wait for a soon-to-be-completed tracking system.

By the end of August, the program should produce 20,000 loan modifications a week, he said.

Tom Kelly, a spokesman for JPMorgan Chase, which now owns Washington Mutual, affirmed the administration’s criticism.

“We’ve done a lot,” he said, noting that the bank has added 950 loan counselors since the beginning of the year, bringing the total to 3,500. “But we’ve got a lot more to do.”

Two days in Los Angeles — where a loan modification company allowed a reporter to listen as its agents contacted mortgage servicers provided the firm not be named — starkly illustrated the problems.

The company charges homeowners $3,000, typically upfront, as it seeks to persuade lenders to rewrite loan documents so as to lower monthly payments. The company says it refunds the money when it fails to secure a modification.

For Ms. Montenegro, a college student at the University of Southern California, her summer job makes for fitting symmetry. In high school, she worked as a clerk at a Washington Mutual branch in Downey, Calif., which specialized in mortgages that invited customers to make such tiny payments that their balances increased.

Many homeowners did not understand the terms: Once they owed a lot more than their house was worth, their payments spiked. Now, that day has come, and Ms. Montenegro is working the other side. She calls WaMu, as the bank is known, trying to cut deals.

Among her clients is Vladimir Vishmid, who owes $490,000 on the mortgage for his three-bedroom home in the Sherman Oaks section of Los Angeles. Mr. Vishmid’s income as a self-employed computer engineer has plummeted, making it hard for him to make his $2,542 monthly payments. He is current on his loan, he says, but behind on his car insurance and utilities.

Software on Ms. Montenegro’s computer logs the details of the three applications her company has submitted for Mr. Vishmid. Chris, the WaMu representative, is telling her to send in No. 4.

“Personally, I’d submit a new file,” Chris counsels. “I’m telling you honestly, anything over 30 days is a new submission for us.”

For Ms. Montenegro, “honestly” is one of those words marinated in so much irony that her eyes roll. Two weeks earlier, she called the bank to check on the file and was told it was being reviewed. Now, it has disappeared.

“So, if I wouldn’t have called, we wouldn’t have known?” Ms. Montenegro scolds.

“It would have just sat in the queue and nothing would have happened,” Chris says. “I wish I had a better explanation.”

In the same office, Ms. Montenegro’s colleague, Sean Milotta, has run into a problem on a loan billed by American Home Mortgage Servicing. Though the borrower appears eligible for the Obama administration plan, the company refuses to take an application because the loan is owned by an investor who is unwilling to absorb a loss.

In another office down the hall, Ramin Lavi, 27, has picked up the file of Alice Descovich, who is seeking to shave down the $708,000 she owes on a mortgage serviced by WaMu for her home in Alameda, Calif. As the interest rates reset in coming months, it will become even harder for her to make the payments, which are now $4,400 a month.

A note in the system shows that the bank confirmed receiving documents on April 29 — pay stubs, tax returns, a letter disclosing her hardship, bank statements. Since then, the company has been waiting for WaMu to review the file.

But when Mr. Lavi calls, a representative coolly discloses that the application has been rejected because one document, a proof-of-insurance form, is missing. He must start over.

“The file had been submitted properly, and you didn’t put the pieces together,” Mr. Lavi says, his body quivering with anger. “I’m not going to stand in line again for another six months.”

He demands to speak to a supervisor, but the representative says none is free. He hangs up and redials, hoping to land in a different call center. Eventually, he reaches Chase’s executive offices, where Becky takes over the call.

“We’re not taking cases now,” she says calmly.

“Why was I transferred to you?” Mr. Lavi asks. Becky does not know. He implores her to keep the file open while he faxes in the lone missing document.

“Impossible,” she says, warning of “the sheer amount of papers coming in.”

Another agent, Lee Wasser, props his feet on an adjacent desk chair as he waits on hold for more than 20 minutes to speak with GMAC Mortgage.

His clients, Dean and Nancy Piercy, owe $380,000 on the loan for their home in Shasta Lake, Calif. A logger, Mr. Piercy has lost work hours, making it hard for them keep up with their $2,048 monthly payment — soon set to rise.

Mr. Wasser has already negotiated a solution: GMAC will accept only $270,000 in repayment, allowing the couple to get a fixed rate mortgage from another bank.

But that suddenly is in disarray. The Piercys have been making their payments, but GMAC has been putting their checks aside, holding the money as “loss mitigation fees,” until their application is completed. It has notified credit bureaus that their loan is more than 90 days delinquent, which has lowered their credit score, disqualifying them for the next mortgage.

Mr. Wasser reaches GMAC’s loss mitigation department. He asks for the delinquency to be removed from their status. But that must be handled by a different department: customer service. He is transferred there, where Jessica picks up the call.

“We are not going to amend,” she says, after a strained back and forth. If Mr. Wasser wants it otherwise, he will have to talk to loss mitigation.

“I just talked to them five minutes ago,” he tells Jessica.

“No, you didn’t.”

“Are you accusing me of lying?”

Mr. Wasser asks for Jessica’s employee identification number, but the line goes dead. Jessica has apparently hung up.

Mike Beutow’s Blog

Mike blogged on information from an Asian source back on June 4th:

“Consumer electronics is rebounding in Taiwan, Korea, China and Japan. But, that bit of good news is tempered …by constrained capacity — so many companies cut inventories and took down production lines, they now face material, component and labor shortages.

“The result, is material price spikes.

This is true. The bills are due up-front for the materials and labor, but payment for the finished good doesn’t come until everything’s delivered.

“Several case studies have shown as many companies exit an industry in recovery as do leave during a downturn. They get caught in the cash flow trap, where the upfront costs and associated risk to running the business outweigh the margin.”

Lest I seem like I’m focusing only on the downside of things, I’d much rather point out that this seems like a bit of good news to me. When the bottom fell out last year, the pendulum swung from Go-Go to over-capacity VERY quickly. Electronics manufacturers complaining about the current situation can only happen because work now exceeds capacity… at least for a little while, we should pause and be thankful.

 

http://circuitsassembly.com/blog/?p=329

US Cities May Have to be Bulldozed to Survive?

This article comes from the UK newspaper The Telegraph [link]

Dozens of US cities may have entire neighbourhoods bulldozed as part of drastic "shrink to survive" proposals being considered by the Obama administration to tackle economic decline.

The government looking at expanding a pioneering scheme in Flint, one of the poorest US cities, which involves razing entire districts and returning the land to nature.

Local politicians believe the city must contract by as much as 40 per cent, concentrating the dwindling population and local services into a more viable area.

The radical experiment is the brainchild of Dan Kildee, treasurer of Genesee County, which includes Flint.

Having outlined his strategy to Barack Obama during the election campaign, Mr Kildee has now been approached by the US government and a group of charities who want him to apply what he has learnt to the rest of the country.

Mr Kildee said he will concentrate on 50 cities, identified in a recent study by the Brookings Institution, an influential Washington think-tank, as potentially needing to shrink substantially to cope with their declining fortunes.

Most are former industrial cities in the "rust belt" of America's Mid-West and North East. They include Detroit, Philadelphia, Pittsburgh, Baltimore and Memphis.

“The real question is not whether these cities shrink – we're all shrinking – but whether we let it happen in a destructive or sustainable way," said Mr Kildee. "Decline is a fact of life in Flint. Resisting it is like resisting gravity."

Camping – Troop 22 Family Camp

This year’s Troop 22 Family Camp was this last weekend. We missed it last year, because we were in Disneyland. So this was the Typhoon’s first chance to go on a Family Camp. And given that we currently on a sort of hospice for our aging Akita, Akiko, we made sure to take her along for what is perhaps our last campout with the family dog.

Paulina Lake, inside the Newberry Crater, is a gorgeous alpine lake nestled into a collapsed volcanic caldera south of Bend, Oregon. Full of interesting geologic features, gorgeous views and a thriving trout population, it was a great choice for a family campout.

Last Fall, we picked up an expedition tent from Next Adventure. Not one of those classic heavy, canvas expeditions, this one (pictured below) is nylon, utilizing a tent/rainfly construction and based on four huge poles that create a cavernous barrel-shaped interior. From end-to-end, this tent is over twenty feet long and divided into two sections. The smaller front section is called a ‘porch’. Lots of windows and a panorama view would make for a great place to hang out bug-free. The larger, more private section has room to sleep all four of us, plus the dog.

So, its a nice tent for comfortable car camping. Ideal for Badasht and for the family camp.  Sharp-eyed readers will notice that the rain fly does not completely shade the ends of the tent. Not a problem for summer showers and the like, but a design weakness for prolonged rain.

Now, central Oregon in June is predictably pleasant. Campers can expect sunny weather interrupted maybe by a thundershower. So the irony should be evident that it came to pass that we experienced a series of thundershowers, followed by a weather front that rained about an inch on us between Friday dinner and early Sunday morning. The rain wasn’t constant, but it did indeed rain more than not.

Saturday morning, while it rained a bit, R had the first Board of Review of his scouting career. For those who don’t know, a Board of Review (BoR) is the last step to achieving a new rank in scouting. Three adults hold an interview with the scout, verify not only that he both accomplished each requirement, but also to test his understanding of what he did, and his overall poise. Pass the BoR, and the scout advances in rank. Fail the BoR, and the scout must wait a short period of time and try again. R went into his first BoR with a rank of Scout (lowest). His BoR simultaneously passed him on Tenderfoot and Second Class ranks….two ranks in one sitting. Nice!

So the Typhoon was in high spirits mid-day, when the weather broke enough for the troop to hike one-mile from the campground to an impressive lava flow chock-full of Obsidian. This photo gives a lay of the land.

Paulina Lake is on the extreme left of the photo; with East lake in the background. Our campsite would be on the closest edge of Paulina Lake, just at the edge of the photo. The lava flow is the gray region throughout the center.

About the time we got back to the campsite, it started raining again, with that steady pelt-pelt of a rainstorm that doesn’t plan to end any time soon. So we had made good use of the break in the weather for the side trip.

Afternoon play activities did NOT stop for the rain. There was just no sensible way to keep those boys and their siblings cooped up in their respective tents while it rained. A pack of 25 rain-soaked kids was a foregone conclusion. No big deal as long as there’s one dry set of clothing and a dry tent to return to…

Saturday night’s social activity was a troop wide chili cook-off. We all had a lot of fun with that, and the chili all turned out wonderfully. Lots of good team-building and bonding took place. Of course part of the bonding was because we all had to huddle under the cooking fly shelters to escape the heavy rain from the weather front that settled over us.

Everyone ate, everyone got wet, some were soaked. Typhoon children were among the soaked. I was somewhere in the middle of helping with kitchen cleanup, when C let me know that her after-dinner tent inspection showed significant leaks from the zippers and seams on both ends of our tent. While we didn’t have water running through our tent area (drainage rivulets had started to appear all over camp by now), there was definitely a steady drip-drip-drip onto the floor. The rainfly was doing its job; the leaks were only from the uncovered ends of the tent. So that was a good news / bad news situation. Seam sealer would fix the leaks, but we’d have to get through tonight without it.

Except that C’s inspection found that an unspecified child in the family had unzipped some of the covers over the porch screens, opening the windows and letting the rain come in unabated, soaking the dry change of clothes, sleeping pads and the feet of the childrens’ sleeping bags.

Ugh.

So it came as no surprise that, at this very moment, both children appeared, overwhelmed suddenly by the cold wet condition of their clothes, near tears, begging for us parents to suddenly make them warm, dry and happy again.

There is just no good way to break the news to two soaked, shivering children that they’d been a bit negligent with the tent and, as a result, the dry and warm belongings they were depending upon were now wet and cold. It wasn’t a pretty exchange. There was some discussion of breaking camp right then. I said a firm ‘no’. We weren’t the only family having that talk at about that time. One family did leave then; their backpacking-style tents were leaking significantly and all their belongings were dripping-wet soaked.

The mitigation process took some coordinated teamwork . C directed the re-arranging of the tent’s insides, while I stood in the rain, protected by my Gore-tex rain coat, holding shoes and clothes up to the fire until the drying process reached an equilibrium with the rain still falling on the wet items. When we’d finished, we had four functional sleeping bags, two kids in dry pajamas inside those bags, and a merely damp dog lying on her dog bed covered by a dry car blanket.

For most of her life, the idea of putting a blanket over Aki was just plain impractical. That night, however, it was different. The moment I put that blanket over Aki, she gave me a look of appreciation like none I’ve ever seen before. Normally she moves around overnight, finding a couple places to sleep besides on her dog bed. This time, she stayed put. Seven hours later, the blanket was still in place with just her muzzle poking out. Just as I left her; she didn’t move a muscle.

Once we finally got everyont tucked into bed, it was M who was the first to fall asleep. C and I spent an hour or so with R, the new Second Class scout, listening to the rain outside, debriefing everything that went on during the day. It turned out that he was the one who left the tent windows open. He felt terrible about it. We talked about learning lessons the hard way. Both C and I had camping-in-the-rain stories to tell that out-did R’s lessons of the day. It made him feel better to know that we didn’t judge him harshly for his mistakes, and it helped him better understand that the guidance we give him on how to be successful is based upon our own personal experience. He’s increasingly learning that listening to experienced elders will save him the discomfort of learning the painful lesson for himself.

Everyone slept okay. Nobody was uncomfortably cold overnight. The rain stopped sometime after midnight, leaving us a damp, misty Sunday morning with raindrops still dripping from the trees overhead. At 7am revile, half the camp was already packed up. Everyone was uncomfortable and ready to get warm. Not a single person seemed inclined to linger longer than needed. The big-event Sunday breakfast was cancelled and by 8:30am, we were on the road. We had a soaked tent, a 30 gallon trashbag full of soaked clothes, a damp dog, and two cold kids as we rolled out, heater going full blast. As quickly as we got packed up and on the road, we weren’t the first family out. Others skedaddled like they were running from a forest fire.

Half an hour of drying time in the car, and everyone’s spirits were on the rise. We stopped for a big hot breakfast at the Black Bear Diner in Madras. Full stomachs finished off the recovery.

By 2pm, we were home and unpacking the car.

By 4PM, sleeping bags were already fluffed dry. The tent was set up in the backyard, ready for seam sealer.

By dinner time Sunday, the sun had dried the tent, and R and I had applied five tubes worth of seam sealer to the miles of stitches in our massive cathedral of a tent.  It’s going to be dry in the future, I can tell you that.

So it was quite a trip. A lot of lessons learned. I’m glad we went.

End of School Recap

I posted back on June 2 about our end of school schedule craziness.So, how’s it going so far? Let’s see…

• Girl Scout Overnight Camp – Successful. Uneventful. Check.
• Ballet School Tea party – Missed it. Girl Scout camp ran just too long getting home to enable a mad dash to the tea party.
• Pet Day at School – Neko wouldn’t go, disappeared when he saw the cat carrier; Shadow went instead. Pet Day was cancelled just prior to the 9:30am start for any animals with fur or feathers, due to multiple children suffering serious pet allergies and being taken to the school nurse. Result:  no payoff; all the same effort.
• Ruhi class – completed. Even though it took us a YEAR to cover about six weeks’ work. Result: success
• Ballet Performance – successful. The girls attended, had a great time. Result: success. 
• Robotics Class – attended last session of the summer. Result: success.
• Piano Lesson – made it. Result: success.
• Troop Court of Honor – we attended. R got his awards. Result: success.
• Fencing & Gymnastics – made all sessions to-date. Result: success.

So, the Ballet Tea Party and the Pet Day didn’t pan out well, both because of circumstances beyond our control. In both cases, we were there as promised, just unable to make the times work. So, earnest, honest effort on all nine, success on seven of the nine.

We still have some things to wrap up, though:

• Last Day of School – today. In process.
• Evening gymnastics sessions – tomorrow.
• Mandatory team meeting – tomorrow.
• Troop Family campout – this weekend.
• OMSI Hit The Road Camp – all next week.

Summer is starting…

Moody's Likes Oregon To Lead US Out of Recession

Written up in The Oregonian, by RIchard Read:

Oregon, Washington and three other states will lead the nation out of recession as Northwest jobs growth resumes toward the end of this year, Moody's Economy.com predicts.

Strong high-tech industries will help propel the Northwest -- and Idaho and Colorado -- out of the slump first, the research company says. Texas will also join the first wave of U.S. jobs growth, fueled by its energy industries, Moody's says.

"We're optimistic about Washington, Oregon and some of the high-tech areas such as Colorado," says economist Andrew Gledhill of Moody's Economy.com. In the Northwest, he says, "We expect the first quarter of positive jobs growth to be in 2009, quarter four."

Gledhill predicts a second wave of jobs growth during the first quarter of 2010 in seven other states: Alabama, Georgia, Nebraska, New Mexico, North Carolina, North Dakota and South Dakota.

He predicts companies with pent-up demand for high-tech equipment will begin spending. He expects Northwest home sales to pick up due to lower prices and mortgage rates.

Looking Ahead – End of School

I don’t know what it is, but the end of the school year is just as jam-packed with events and galas as the holiday season. It’s rather a nightmare, logistically, I have to admit.

Last weekend, for example, M had: Girl Scouts overnight camp, a Ballet School tea party and an invitation to a friend’s house … all for the same Sunday morning.

Yesterday, the conflicts started early with M’s school science fair. Then, that evening, we had a Boy Scout Court of Honor for R, which conflicted with Fencing lessons AND N’s need to attend a Badasht Camp teleconference (along with other real estate and/or legal obligations I won’t detail here).

Tomorrow, it’s Pet Day at school. M wants to take one of the cats. Fine. The pets are only allowed in the classroom from 9:30-10:30. Fine. Except school starts at 8:30…and school is about a 20 minute drive from home. So… let’s do the math:

8:00 – leave home for school
8:30 – drop kids at school, return home
9:00 – arrive home, retrieve cat
9:30 – arrive at school with cat
10:30 – leave school with cat
11:00 – arrive home to stay… finally

or,

hang out at a nearby coffee shop with a cat in a cat carrier for an hour, before taking the cat to the classroom for an hour, THEN returning home. No time saved, just fewer miles driven.

Oh, but wait! There’s MORE…

On Friday, we’ll negotiate a path through the scheduling collision that is Ruhi class, ballet tickets purchased before there was a Ruhi class, and robotics class.

Saturday we’ll be at Aunt P’s house at dawn to help plant a garden. That process will especially tough for the girls, who will be at the ballet the night before. Ballet traditionally runs late, you see. Only to start some good old-fashioned agriculture work at daybreak.

Monday and Tuesday will see the Troop meetings pause, but Fencing and gymnastics workouts continue.

Then, next Wednesday, June 10, is the last day of school.

Thursday the 11th is the start of evening gymnastics workouts, cancer class, and a mandatory parents’ meeting for the gymnastics team. Another collision; all three are scheduled for the same time.

Friday morning, we leave for a three-day campout with the Boy Scouts – the annual family camp event, returning home Sunday, June 14th.

Just in time, too, because M gets to spend the week of June 15th at OMSI ‘Hit The Road Camp’.

See what I mean? That’s the next three weeks. As busy as the holidays. And I’ll just stick to stating the facts. I know mine is not the only family going through similar drills at the end of school And I know that, if I start adding commentary, I’m guaranteed to inadvertently look ungrateful somehow. I’m certainly NOT ungrateful, so we’ll leave it with this one-word summary:

whew!!!

Design Your Own Shower Curtain

Wishing you could find just the ‘right’ shower curtain to finish off your bathroom? Take charge! Create a photo of  the EXACT image you desire for your shower curtain, then have these guys print it onto the shower curtain for you…

http://www.photoshowercurtain.com/

I’m sure it goes without saying that you should probably choose wisely; you’ll have to ditch the shower curtain if you grow tired of the image. But then again, it’s easier to replace a shower curtain with your girlfriend/boyfriend’s face on it than it is to laser-etch their name off your bicep. I’m just sayin’…I’m not a big tattoo fan.