Mortgage Meltdown - Top Ten Reason Housing Bubble Burst

President Obama has formed the Residential Mortgage-Backed Securities Working Group to get to the bottom of the mortgage meltdown and to determine if there were laws broken or fraudulent behavior that until now has not been charged.  There can be little doubt that there was plenty of fraud and undoubtedly laws were broken during the wild upswing in the housing market bubble, and then again as the CYA took place at every level during the housing bust.  While it may be appropriate for the federal government to jump in years later to try and unravel the mess, it would really seem to be election year pandering more than any real desire to get the bad guys. 

It might be more interesting to try and take an honest look at what went wrong on every level. Lets start with things that have been well reported and about which there is probably widespread agreement. 

1. Almost all leadership agreed that home ownership was a good thing, and that many families were being left out of the benefits due to race, redlining, and other inappropriate activities.  The "good guys" on both sides of the aisle determined that the answer would be legislation and pressure that would cause banks and mortgage lenders to be more accommodating and "fair" to those who had been left out.  This resulted in banks beginning to make loans that they felt were risky.
2. As lending standards dropped, the potential for fraud by borrowers and lenders became rampant.  People over reported income and under reported expenses, appraisers ginned up prices, and much of this was either encouraged or ignored by lenders for two reasons.  The agents and the lenders didn't much skin in the game, and the potential immediate financial reward was huge compared to the potential loss.  
3. Consumers rushed in to buy, to buy up, or to add on in typical goal rush fashion.  Home became the way to wealth.  This is no surprise.  It happens with stock, commodities, or any other item in limited supply when the public perceives an opportunity to make gains with low risk.
4. Financial entities discovered a new way to generate the needed capital to underwrite all this borrowing.  The new bundling of mortgages into various kinds of instruments was untested, and largely unregulated.  This was an invitation to disaster.
5. Leadership at Fannie and Freddy had no benefit to reign any of this in, and plenty of reward for helping it to accelerate.  They and other public and private agencies charged with properly evaluating the true value of these new instruments, did a horrible, and possibly fraudulent, job of estimating these values.
6. Most elected officials had no benefit from sounding alarms, creating restraints, or investigating agencies or banks.  They were making money on their own investments as were their constituents.  They would risk actually bursting the bubble by talking it down.  That would surely not have been a great way to get reelected. 

What were the elements that don't get talked about at all or that are largely under reported:

1. Massive speculation by investors and everyday folks.  As in any bubble, the longer it goes the less sophisticated the crowd that tries to take advantage.   So, in this case you had millions of homes being flipped by folks who were in way over their head.  They were joined by others who refinanced to add on to their investment vehicle to enhance its value for a future sale.
2.  Huge increase in "household formation."  This was due to reduced household size as kids moved out or roommates went solo.  But it was also due to the unprecedented number of both legal and illegal immigrants.  This increase in household formation resulted in high rents that made the purchase decision a marginally better alternative.
3. The speculation, price increases, rent increases, family formations all led builders to overbuild.
4. Unwinding this mess was unprecedented.  When the stock market or gold or oil or silver or a currency unwind after a bubble, you generally have a sector or two that are effected.  In this case the unwinding would take five years and counting and touch every part of the market world wide. 
   
   The banks, government agencies, and elected officials overreacted by making mortgages almost impossible to get.  The speculators accelerated the downward push on prices as they bailed or just left homes abandoned.  As prices collapsed and building came to an abrupt halt, the economy tanked, leaving new homeowners stranded with high mortgage payments and reduced income.  Household formations fell off a cliff as migration stopped, kids moved back in with parents, and roommates became fashionable again.
   
   The unwinding does what unwindings do.  It fed on itself.  The more prices went down in value the less the underlying financial instruments were worth, and the institutions holding them were now the ones that were underwater on their holdings.  Now it didn't matter whether lenders wanted to lend, they had no ability to lend.
   
   So.  Where do I go wrong or what did I miss?
   
   
   
   
   

A Good Divorce Attorney - Oxymoron or Possible?

At one time in my life I wanted to be one.  A divorce attorney doing good.  My idea was to be both a marriage and family therapist and a lawyer.  Then I could meet with a couple knowing that however things worked out, I would still get paid.  My motives were more pure than that.  The theory was that I would not be focused on the money, since I would get paid no matter what. 

A few decades later, I now see that attorneys in general can't allow themselves to take an impartial look at issues.  They are an advocate.  So my new Encino Divorce Attorney (almost as fancy as Beverly Hills), is working my side of this divorce that I don't even want.  I begin to see how the attorneys must work every angle to make sure they are fully representing the client.  It is up to the client to say "no" if the approach is going to create unwanted long term ramifications. 

I'm sure you can understand that I can't say much here, but I will say "stay married."  No matter how bad you have heard that this process is for everyone involved, it is far worse than that. 

The Consequences of Divorce on Our Children

How utterly selfish is this process we as a society have allowed to flourish.  How ironic that in an age when parents are so overprotective of their children that they allow such destruction of their emotional well being just to satisfy their own lusts and immaturity.

My parents enjoyed 61 years of marriage ending with my father's passing a year ago.  I have no ability to know either of their hearts, but as far as I know, their was never any serious issue of the marriage vows being inviolate.  However, there was a time when my siblings and I were worried that there was such a danger.  And we were very, very anxious about the circumstances. 

Kids need the security of knowing that their parents are BOTH going to be there for them.  When there is even an unsubstantiated fear about that security being interrupted, it play havoc on their emotions.  Merely seeing a divorce play out in the family of a family member or friend is all that is needed to create those doubts.  But statements or actions within the home can drive the insecurity to levels that create emotional trauma.  That trauma can lead to the child taking actions to relieve the stress or lower the pain.

When there is an actual leaving by one parent, then the potential for consequences is even greater.  There are the obvious questions about fault.  "What did I do wrong that caused Mommy to leave?"  There are issues of being left by the other parent.  And, of course all the issues around any loss such as anger, mourning, avoidance of future pain, and so on.

So in a time when we are putting helmets on our kids for skateboarding, carefully selecting the best schools, worried about the best methods of parenting, and involved in endless discussions about this food or that, this video game or that movie, how is it that we individually or as a society are so glib about divorce. 

Prayer Time Interupted - A Death is Imminent

I suppose my prayers this morning are directed at God and heard by God.  But my goal has been to have a balanced prayer life.  I don't want to spend all or almost all of my hour with God dwelling on the imminent death of my family.

In this case, it isn't a doctor giving the death sentence.  The courts say that our family will end in 60 days or less.  Oh, there could be minor changes in that, but the reality is only a miracle can save my family. 

So, as I try to pray about others and their prayer needs and requests; as I try to pray about my childrens' futures; as I try to pray for my own needs and thank God for his provision; as I try to pray for strength and His comfort almost every prayer is tangent to the coming death.  So I am distracted back repeatedly to wondering what life saving approach can be tried.  Is there a cure?  What will be the consequences for individual members of the family?  What should I be doing to provide comfort and leadership to each of them?

The impact of a death of a loved one is pretty significant in the lives of those closest to them.  But the death of a family has a much greater and longer term impact.  Why has our society allowed this scourge to continue?  Some in our culture are all worried about global warming, folks without insurance, or whether animals should have lawyers.  Most of these who care so much about these questions have been impacted far more by a divorce in their family than they will ever be impacted by even crime or war.  When will Western Culture wake up and realize that while they fret about hangnails, the heart is failing.

I suppose with the death so close and so certain, it shouldn't be surprising that today's prayer time is consumed by it.  I pray that I can leave it at the alter today, so that tomorrow's prayer time can be more balanced.

Bible - The Books of the Major Recommendations

Our Bible study class realized as we read through the books of the "law," that God didn't really suggest he was going to create problems for man if he failed to act in accordance with the law, but rather that there were natural consequences of sin.  Do the right things and life will go well for you.  Do the wrong things and you will suffer.

And yet, as every Christian knows, we see those who are sinning apparently doing well, and those who are living fairly righteously suffering consequences.  While I'm certainly not the first to think of this, I had a new take on the issue during my prayer time.

For the person living outside of God's commands and admonitions, even on their best day they are waiting for the other shoe to drop.  They live in fear, or at least stress over, the likelihood that they will get caught by those who are losing because of their gain, that the gravy train will run out, and they will be reduced to living like the rabble they so judge, or that illness or other consequences (STD's, stress related illnesses, etc.) will create discomfort or even death.

On the other hand, those of us who humble ourselves and attempt to live righteously will, as Paul points out, prosper even in our loss.  We will be hopeful when we suffer,  see potential good or gain in every loss, not be subject to stress due to anxiousness over our unexposed sins, and worry less about how others may be angry or unhappy with us.

Thus, we inherit the kingdom of God through our being meek now, not later.  We who may be last come in first now, not later.  Our riches lie in our good health ... healthy outlook ... even when our physical or fiscal health is not so good.

Death, Heaven, and Hell

Turned 62 earlier this week.  Kind of hard not to think, from time-to-time, about death.  I'd like to ask my Mom (84 in 6 weeks) what she's thinking about death, or maybe some of the older folks in my church.  But I feel uncomfortable bringing the subject up.  Why is that?  As far as I can tell, nobody ever talks about death.

We don't talk very much about heaven.  Even in the church.  I suspect that's because we have so many goodies here on earth that the prospect of heaven no longer offers much tangible benefit.  Sure, no more tears.  Sure, we get to meet Jesus.  But in an age of plenty and toys that are so cool we couldn't have imagined them even ten years ago, one needs a very good imagination to think of how things will be even more exciting in heaven. 

I actually think about heaven.  I read Randy Alcorn's book on Heaven, and I've read numerous other books and parts of books on the subject.  I'm totally confident that heaven is going to be amazing in every possible way, and beyond anything we could imagine in our wildest dreams.  But, I don't wake up heavenly minded. 

A close friend at church lost her Dad last week.  She does not have the assurance that he knew Jesus.  In fact, if he did, it would have been a foxhole confession in the last week of his life.  But what about hell.  If we don't talk or think about death or heaven very much, we sure don't talk about hell.  No more pastors talking about hell and damnation.  Can't go there.  Too tough.  People might leave.  Hmmm.

Divorce and the Bible - Excommunication

How amazing God is.  Today is 60 days away from the theoretical final date of my divorce from my wife.  I oppose this with every fiber in my body, but in today's world it only takes one.  She is continuing relentlessly towards that outcome. 

Just last week, I switched from listening almost exclusively to Conservative talk on the radio to listening to Christian talk.  Sermons and such.  I'm not a big fan of Frank Pastori, but that is the choice during rush hour.  He had the pastor of a major church on today, of all days, talking about a woman in his church who was leaving her husband without Biblical grounds.  They had tried every thing they could think of to lovingly persuade her to change her direction. 

But she would have none of it.  They decided as a church body to excommunicate her.  Well they have come under all kinds of fire for that.  But why?  We excommunicate gays who act out their desires.  We excommunicate others who sin.  He pointed to the scripture in Matthew that says "turn the person over to the devil."  He pointed out that this passage is not mean spirited but hopeful.  Hopeful that the sinner will come to the end of themselves and repent. 

After Bible study, I turned on one of my favorites, Chuck Swindol.  What is he preaching on.  The sanctity of marriage, and how we as a church are treating divorce as no big deal.  He admonished the church to wake up and realize that divorce is a destructive act that totally flies in the face of God's plan.  He was quick to allow for divorce where there is adultery, abuse, or abandonment.  But other than that, the church needs to get back on the side of righteousness. 

If you are reading this prior to May 17, 2010, pray that the mother of my 4 children and 6.5 grandchildren will get right with Jesus, and restore her family.

Disappointment with God and Others

And I was doing so well.  But for the past two days I've been going back and forth with someone in my life who is far from God, self destructive, and hurting me and my family.  It made it so much harder this morning to get into real intimacy in my prayer time.  Distracted. 

Does that happen to you?

The Lord's Prayer - Thy Will Be Done - Intercession

In a series of sermons on the Lord's prayer, Craig Henson, the pastor of Venice Church where I am a member, was discussing the phrase "Thy will be done, on earth as it is in heaven."  I had always seen this particular request of God as just that.  Please God, would you move the pieces of the chess board around so that people will start doing things on earth as it is in heaven.   Or by including the first few words of the verse "Thy Kingdom come," I thought it might be a request of the Lord that her hurry up with the bring about of His end time plan where things on earth will be like heaven. 

I make no claim to being very good at interpreting scripture.  I am thrilled to have been gifted with a copy of J Vernon McGee's "Thru the Bible" several years ago (Thank you Christian), that is my guide to understanding context and intention.  But I do have my own personal interpretation of this verse. 

Until Your Kingdom comes I pray that my actions would be within Your will so that I might provide evidence of heaven here on earth, and thereby also experience some of what heaven will provide.  This interpretation results in a few important results. 

First, it put the responsibility squarely in my lap.  Jesus was doing the will of His Father.  I am to do the will of my Father.  I have no responsibility for anyone else doing so, nor do I have an control over whether anyone else follows this directive.  To the extent that I do the will of God, it undoubtedly will effect how others act, but my responsibility begins and ends with my own decisions and actions.

Second, I have no control over others anyway.  The only hope I have in helping others to do the will of God here on earth is by example, by prayerful intercession, and by sharing the Word with others.

The Truth About the Bible - How Can Anyone Doubt?

Out of a one small population of nomadic people has grown three religions that represent over three billion followers.  By some amazing coincidence these three groups continue in the 21st Century after the birth of Christ to conform to Biblical descriptions of them laid down between 2000 and 7000 years ago. 

The Jews, probably most remarkably, like no other group on earth, maintain their identity as a "nation" even though they are scattered over and over again throughout history.  They constantly strive to come back to the nation of Israel just as the prophets said they would.  This very small population group has been more reviled and despised than any other group even until today.  They have been destroyed for no other reason but their identity as Jews over and over throughout history, even until today.  And yet they persist.  They neither proselytize nor subjugate anyone into their faith.

The Muslims, which according to the Bible, grew out of the same root as the Jews, but were described by the Bible as being wrong headed, have shown themselves, even until today, to be a religion which grows by fear and subjugation.

The Christians, growing out of the Jewish root, and following the Messiah, Jesus, have almost without exception shown themselves to be an unselfish, forgiving, and peace loving group.  Their growth has come by preaching and conversion through the free will of the individual to choose Christ.

All of this is written and described and has come to pass in a way precisely laid out in the Bible.  The historic elements of the Bible are specific as to names, places, prophesies, and details of both daily life and civilizations.  The potential for non-believing or even believing scholars to find gaping holes in the Biblical account abound due to all of this detail, and yet no such gaping holes are found.  If there could be a major showing of a huge error, hundreds of millions would fall away from the faith. 

How can their be any serious doubt that the Bible is divinely inspired?  If it is the Word of God, how can those who believe it so easily disregard it.  This is the great mystery.

Day -4 - Returning This Blog to Its Original Intent

You can actually watch my life become more secular if you check out the journey of this blog.  Started 5 years ago, it was true to its intent.  The last couple of years, the few postings were much more about me making a living.  If I'm going to change my discipline, then this should be a place of pure intent.

Day - 5 - Christian Discipline: Appreciating the Father in Heaven

Getting up early is not an issue.  I generally wake up before six, and can probably back that down to 5:30 without any difficulty.  I stretched my back, but I'm not ready to work out yet.  I am ready to pray.

When I was in the disciplined mode the last time, I found that using the Lord's prayer as an outline for my time with the Lord was a huge help.  At our church, we are currently studying this very thing.  The teaching that had inspired this approach last time was Could You Not Tarry One Hour?: Learning the Joy of Praying by Larry Lea.  I should probably reread this classic.


What have I learned already on this first morning of getting up out of bed and going to a prayer place to study and pray?  That I am a sinner.  My name should be "selfish."


Like every human being, I am a child of a parent.  Like most, I am a parent to a child.  As I contemplated these roles this morning I found that I am a better parent than I am a child.  Sacrificial, unconditional love comes pretty naturally with regard to your kids.  They are helpless, needy, and you can clearly know that you are responsible for their life.  For most parents I suspect there is plenty of selflessness in their parenting.  One thought I had as I prayed:  how much of our willingness to sacrifice for our kids is based on the fact that we can play god in their lives.  


But the more telling time for me this morning was my recognition that after my parents sacrificed so much for me, shouldn't I be willing, even anxious to return to favor.  Shouldn't our thankfulness for their huge contribution to who we are result in an outpouring of devotion to them, rather than a begrudging sense of duty to call or visit from time-to-time.


Of course we are busy.  Hugely busy raising our own kids, working for a living.  We have other responsibilities to spouses, friends, siblings, brothers and sisters in Christ, hobbies, and God.  Taking an hour a week for Mom and even less for Dad is about all that we can honestly spare.  Let's see.  50 hours a year for the 30 years that you and they are both adults.  1500 hours.  They spent that in the first year of your life.


Maybe an hour a week is enough.  Or two or three.  I think the real issue is the begrudging or duty part.  And that's where we get to the God parallel.  Is my hourly time of devotion with my heavenly Daddy going to be a time of duty offered up as a begrudging time when I'd rather be watching TV?  Or getting more sleep in the morning so I can stay up for TV later tonight?


If we believe that God is who He says He is, how can we not want to spend half the day with Him or even more.  The problem should be tearing ourselves away from our time with Him, not finding the time to spend.

 

Day - 6 - My Daily Chrisitan Discipline Plan

If you checked out my insanity blog just below (and if you didn't you should), I am going the almost full immersion route to try and get myself back on track.  So the title above is correct.  I haven't started yet.  Today is day minus 6.  I am starting on Friday, March 12.  My birthday is the 16th, which might have had some sense to it.  I picked Friday because two of my favorite TV shows end their season this week. 

I am winding up (down) toward that day.  More time in prayer this morning.  Only reading Christian literature.  Listening to classic music on the radio, not news. 

Stay tuned if you like.  I'll try to remember to post daily.

Humans Are Stupid, Dumb, Even Insane - Repeat Their Mistakes

Definition of Insanity - Doing the same thing over and over again and expecting a different result.

Back pain, I'm happy to report, is rarely an issue for me.  Chronic back pain even less so.  But a few years ago I did tweak my back in such a way that no amount of rest, heat, vibration, or Motrin seemed to get me any closer to relief.  Then one day I was putting away Diet Pepsi cans on the shelf of my fridge, and I decided not to baby my back.  Instead, I fully stretched my back with each few cans that I lowered to the bottom shelf.  WaLa!  The next day my back felt great. 

Fast forward a couple of years.  The last three weeks (after installing a water heater), my back was not responding to heat, vibration, rest . . . you get the point.  And I have been . . . uhh, babying it.  Has anyone else had a similar experience with their physical issues?

So that those who occasionally stumble across this blog become fully aware of my own insanity, here is a much sadder tale.  In the early '90's I made a decision to seek the face of God through daily devotion and discipline.  I began by immersing myself in the things of God, which by extension, meant divorcing myself from the things of the world.  I stopped listening to news, reading secular magazines or books, and even turned off the TV. 

The results couldn't have been better.  For over ten years my experience with the Lord was nothing short of amazing.  My prayer time was not limited to the hour in the morning, but was rather a constant connection during the day.  My ministries soared as I participated in Men's ministry through Promise Keepers, taught adults, sang on the praise team, wrote a book on teen abstinence, did radio and appeared on the Geraldo show.

Amazingly all of these things were easily accomplished while raising four kids and running a medium sized manufacturing business.  Looking back, it seems impossible.  But I have witnesses.  :  )

One would think that a life that blessed would keep even the dumbest guy on track.  One would be wrong.  Having nothing to do with my work for Jesus, the business began to have troubles in the early '90's.  Many decisions that I made to keep the company from folding were not Godly at all.  But even the desperate and inappropriate decisions were not enough to save the business, and it was sold at fire sale in 2007. 

While conducting myself in a way I knew was not Biblical, I pulled back from ministry.  How could I minister to others while behaving in a way I would never have counseled them to do.  I was pretty sure that God didn't want to help me out or maybe even have much to do with me.  So my prayer time evaporated.  (Of course, I really just didn't want to hear Him tell me to STOP sinning.)

Well, it's now over two years since I sold the business.   I'm not sinning, but my spiritual life reaches about as far as the ceiling (I know.  It isn't original, but it is exactly how it feels.)  But, reaching back to the parallel story about my aching back.  How smart would I have to be to see that I just need to stretch my spiritual muscles and begin to exercise again. 

Are you experiencing anything like this?  Have you fallen into a rut that has a clear answer?  One that has even worked for you before?  But you are plan insane, like me?  I'd love to hear your story.

YouTube - Check Out This Amazing Video (and I didn't create it.)

In the past couple of years I have produced over 200 videos, some of them very successful engines of business for my marketing consulting company and for my clients.  However, I give my first Randy award for excellence in the use of YouTube to promote a product to BestBuyNeonSigns.com.

You have to love this video if you have ever marketed a product.