Stated Income Loans…I told you so

I’ve read several stories today in the news of “victims” of foreclosure as a result of taking on mortgage loans that could not be paid for. As a longtime expert in this residential industry, I’d like to pull back the curtain on part of the problem so that you can better understand what goes on behind the scenes. How do these loans get originated in the first place? Who’s to blame?

First of all, allow me to say that there are at least 3 guilty parties in the origination of such loans. The ones that are the most common are known as “stated income loans.” Mind you that such loans are very, very difficult to come by now, but prior to the meltdown an individual who had a high enough score was able to merely “state” their income instead of providing tax returns, bank statements etc, and be approved for financing.

The initial problem was with the lenders themselves though. For example, the stated income program was originally created to be less burdensome to self-employed income earners. However, in their greed, lenders began to make such programs available to wage earners who could easily manifest pay stubs instead of stating their income, as well as fixed income earners, who could easily manifest their awards letters. Should either of these income groups also be self-employed, I see this stated program as an asset. However, if the borrower was merely a wage earner or living on fixed income, the approval of such borrowers on a stated income program was ripe for fraud.

As a wholesale account representative and as the owner of a retail loan origination business, I took a lot of flack from my clients (other residential mortgage brokers) and my own employees (licensed mortgage brokers) when I took the hard line stance that I would not approve or accept any stated income loans in which I knew the income stated was to be fraudulent, unreasonable, or just plain wrong. Too many times I heard the so-called professionals in my business call these “liar loans.” I would always retort that stated income loans were for one purpose and one purpose only—to eliminate the hassle of manifesting all of the documentation that would support the claimed income. Too often I had submissions from residential loan officers without any income stated whatsoever. Their plan being that as the wholesale account rep, I would join them in their fraudulent actions and tell them what the stated income amount needed to be in order to get their loan approved. Instead I would turn down the loan or approve it as a “No Documentation” loan which would carry with it a higher interest rate due to the higher risk. I would often tell the brokers “it’s called a stated income loan because the income is supposed to be STATED…not made up, not fabricated, not estimated." It’s to be a statement of fact.

In most cases I either lost the deals in my wholesale days because of this stance, or the broker would get wise and never send me a blank loan application again, ensuring that the income was “properly stated.” On one deal in particular with a broker...we'll call him Brian, who now owns a commercial loan origination company out of TX, swore up and down to me that his client really made the income she stated on the loan application. Unfortunately, not only did this woman not make the money stated on the application, but she missed her very first mortgage payment to our company and claimed that she had never stated any such income on her loan application. (Ironically, this same "Brian" spent time in jail shortly after this incidence for manslaughter (in MO) as he killed someone while driving drunk—in spite of the fact that his license was suspended due to other DUI violations. Guess when you break one law without the consideration of consequences, it’s easy to break others).

I lost many residential loan officers at my retail operation as well because of this. When the loan officer couldn’t get a “stated” loan approved in my shop because I turned it down from being submitted due to overinflated income, inevitably some wholesale account reps would tell my loan officers where they could work elsewhere for a less “unreasonable” person and get the deal through with no problem. Individuals who worked for me saw no problem finding the right people to work for who would look the other way and provide such perilous funding in spite of the facts. The deception was they were such nice and enjoyable people to work with otherwise. They simply saw no problem in falsifying the income in order to obtain the largest amount of financing their borrower would ever be responsible for.

While this blog may sound unintentionally bitter, it is as a result of the headlines and news stories I read today. The domino effect of so many of these “liar loans” being put into market is so huge today that there’s no longer any refuge for these individuals who would commit the crime in the first place of lying about income. Plus, there’s no respite for those homeowners who would take on a loan for a mortgage that they could not pay. Fortunately for the homeowners, it looks as if there is enough dirt on the hands of the lenders that many may end up getting out of foreclosure proceedings in spite of their illegal applications. Unfortunately, the big picture is as a result of the nefarious actions of many an entire nation now suffers an economic collapse of historical proportions.

The little acts of deception do add up folks. And in this instance it’s crumbling our entire nation financially. I believe in “opposition in all things.” If the little bits of deception add up, then certainly can’t the minor acts of honesty, heroism, and proactive efforts for good? I certainly hope so. In fact, I’m banking on it.

Copyright 2009 Kellene Bishop. All rights reserved. You are welcome to repost this information so long as it is credited to Kellene Bishop.

New Number One Killer in America

I’ve recently read several studies which claim that heart disease and cancer are the number 2 causes of death in the United States. Unfortunately both of these numbers have not earned their respective positions as the number one and number two killer in the U.S.

The Institute of Medicine brought the travesty of the killings of American citizens to light. In the 1999 report To Err is Human: Building a Safer Health System put the annual death toll due to hospital care 44,000 to 98,000. However, other reports including on study published by Jama put the deaths at 225,000! Dr. Milt Hammerly MD assesses the annual body count at 204,000-301,000 killed by medical treatment each year. In other words, medical malpractice kills more American citizens each year than does heart disease or cancer.

Based on the fact that most institutions under-report their errors, Hammerly believes his estimate may be conservative. The high end estimate, developed in a 2003 report led by long-time nutrition-activist Gary Null, PhD, concludes that the annual mortalities due to medical intervention are between 783,000 and 999,000. The report, based on compilations of published studies of others (in addition to those in the JAMA article), concludes that medical intervention is the Nation's #1 killer.

Only half of NHS trusts fully comply with all the safety standards that they are expected to meet, and they do not always have effective systems in place to understand risk, properly report incidents or learn from them, the commission said.

Do you wonder why these deadly incidences aren’t improved? It comes down to good old fashioned ego.

Undoubtedly the healthcare industry hasn't been able to respond as swiftly to this problem as the airline industry did when it was confronted with serious problems two decades ago. The reason is a common scenario in which a pharmacist, or a nurse, notices something problematic in a patient's chart or prescription history. When one suggests a change, "the doctor gets huffy, indignant that the nurse or pharmacist is moving into his authority area."

In 2003, approximately $40 billion was spent on homeland security to prevent another terrorist attack like 9/11. If even a fraction of this effort had been spent on reducing preventable medical errors in hospitals the outcome would be monumental. The reality is that there has been no national collective will to change the deadly statistics. According to the follow-up 2005 IOM report, there has been little change in reducing preventable hospital tragedies since the 1999 IOM report. Why isn’t more done by oversight organizations to alter this deadly path? Money and denial.

Given the state of the economy at present, no doubt if hospitals were required to implement certain safety and management procedures additional costs would be involved. This would undoubtedly lead to the healthcare industry requesting their own bail out money. Yes, once again we have a situation of “we’ve screwed up, so can you pay us to undo our mess?” On the other hand there is a sizeable force of experts who continually claim that such a problem is not significant enough to require sweeping changes to the industry. Apparently they deem the number of deaths in ratio to the number of patients treated as a tolerable status.

Funny. You hear of one single solitary death as the result of someone misusing a gun and all of the 2nd Amendment Haters start opening their mouths and their pocket books to fight against Americans using firearms to protect themselves. (There are a total of 1500 accidental gun related deaths each year) And yet these same haters would leave us helpless and subject to the evident lack of expertise and integrity in the medical industry. In the meantime, malpractice insurance rates go up, so medical care costs go up in an effort offset the costs, and our insurance costs go up to prohibitively large premiums. And yet so much could be avoided if more professionals focused on mastering their chosen craft.

You have the right to protect yourself from all harm. If any medical advice to you doesn’t sound right, clear, or logical then ask for clarification or second opinions. Just because the doctor only planned on spending two minutes with you doesn’t mean that’s all you’re entitled to.

Copyright 2009 Kellene Bishop. All rights reserved. You are welcome to repost this information so long as it is credited to Kellene Bishop.

Where’s Jack Bauer When You Need Him?

This morning’s headline reads that our future Attorney General, Eric Holder, submits his opinion that waterboarding is considered torture. As I read this questionably newsworthy headline, I wondered what the military and other justice officials are allowed to use to coerce their prisoners into providing information necessary for the defense and expedition of justice in our country.

I firmly believe that the majority of the viewers of the popular “24” series are in part wrapped up in the show because of the common sense justice that seems to be dispatched regularly by “the good guys.” Today that kind of justice is an enviable fantasy for many military and law enforcement professionals. Many of us have a longing for what seems to be common sense justice because so many of us seemed to be robbed of it lately.

On “24” you can forget the gratuitous fighting in hand to hand combat style. If the bad guys pull a gun on Jack Bauer, he merely finishes things with an appropriate shot to the head. (Reminds me of a classic scene in one of the Raiders of the Lost Ark Series in which Indiana Jones is confronted by a display of a long fancy sword display, only to have Indi appropriately just pull out his gun and shoot the bad guy. I recall a loud roar of approval in the theatre during that scene.)

I have a really good friend who is a high level agent for the DEA. He has periodically bemoaned the way that their hands are tied in appropriately defending themselves against strung out, maniacal drug traffickers in the name of justice.

While I’m not saying I’m an advocate of waterboarding — I’d have to research it more — I wonder where the line will be drawn when it comes to worthwhile interrogation? Frankly, the mere act of an interrogator making vicious threats to a prisoner in order to get information could be considered “torture” if the case was made that the suspect/terrorist truly believed the threats to be true. I can just hear some attorney now claiming emotional duress. Putting a perpetrator in a four-walled concrete cell having to do “his business” in plain sight could be considered torture because it’s not “humane.” Making Paris Hilton wear prison garb could be considered a form of torture. When my mother was first married and still learning the domestic ropes, my father claims that having to eat her cooking was a form of torture. Recently in the news, a prison inmate claimed the chicken he had to eat from the prison cafeteria was a form of torture. Where do torture claims end and the ability to do a critical job for our nation’s security begin? It’s really beginning to appear today that the criminals have more rights and privileges than law abiding U.S. citizens. We certainly are proving that theory in other aspects of our nation’s operations.

There are actions and there are consequences of those who elect to compromise the democracy, virtue and freedoms of another. There’s torture and there’s effective coercion. There’s inhuman treatment and there’s protecting our freedom. I hope that we don’t lose sight of effective operations at the cost of our souls or our freedoms.

Copyright 2009 Kellene Bishop. All rights reserved. You are welcome to repost this information so long as it is credited to Kellene Bishop.

Our Nations Unemployment Rate: The Manifestation of a Sleeping Giant

Statistically, small business owners provide the largest percentage of jobs in the U.S. — yes an even larger percentage of jobs than all of those bail-out “worthy” industries. In spite of all of the bail out monies that were supposed to loosen up the purse strings of banks in order to strengthen small businesses in extremely tough times, small businesses have become ignored and have nothing to show for any of the so-called efforts on their behalf. In fact, even without the economic crisis that is truly upon us, historically small businesses get very, very little considerations, tax breaks, or other incentives to operate their businesses. As a result, the economic drain our nation is experiencing is merely a manifestation of a long time attitude apathy towards what really makes this country healthy. Is it any wonder that the job loss in the last 12 months has been the worst it’s been since the World War II era? Over 250,000,000 jobs were lost in 2008 and that doesn’t take into account the millions of individuals who were forced from full-time employment to part-time, nor does it take into account the self-employed individuals who have had to hang up their dreams and stand in the unemployment line with millions of others. In my opinion, the economic crisis could have been averted long ago, and even the Wall Street and mortgage disaster impact lessened had national and state leaders paid more attention to the needs of small business owners.

When a CEO runs a company into the ground, it’s an innocuous entity. The CEO is merely losing his regular pay check and other corporate perks. But when a true small business is run into the ground, chances are high that the life savings of the business owner, customers they’ve become friends with, and long-time employees they’ve connected with personally suffer through the carnage of such an event. By the time the doors are finally shut on a small business, great sacrifices have already been for its survival. Great personal financial risks such as mortgaging personal homes to the hilt, stripping it of all available equity only to find the value dropping far below the lien amount months later, and cashing in retirement and savings accounts just to last as long as possible in hopes that a life preserver will come their way. And yet for all of this sweat, tears and sacrifice, small business owners can’t lay claim to appropriate health insurance tax deductions, can’t get access to the same affordable health care packages that large corporations enjoy, and are inundated with paper work requirements while their larger counterparts have enormous legal and accounting teams to deceive their shareholders.

When a small business owner sees fit to terminate an employee who steals from them or conducts themselves inappropriately, the state still requires them to pay unemployment benefits unless such an infraction is specifically outlined in some kind of written form that the employee has manifested the receipt of.

Large corporations have money and staff to handle these items. Many such monies derived by secret government contract negotiations, unfair labor practices, political connections, and international outsource savings. In contract, small business owners are beat up every which way they turn. They pay sales taxes when they purchase items to make their businesses run better, or make their jobs easier, and then they are assessed additional taxes by their cities on those same items merely because they possess them.

Long ignored is the fact that small businesses historically pay better average wages than big corporations, and discounted is the fact that employees are typically more satisfied working for a smaller business. There is absolutely nothing done to throw a rope for small businesses in spite of their obvious strength to the economy which has been historically present for over a century!

We’ve heard the saying “money talks.” The current economic crisis is not as a result of Wall Street collapsing, a residential mortgage scandal, or the ineptness of the Federal Reserve. It’s an inevitable manifestation of ignoring the goose the lays the golden eggs. I wonder how much worse things have to get before the REAL talking money gets listened to.

Copyright 2009 Kellene Bishop. All rights reserved. You are welcome to repost this information so long as it is credited to Kellene Bishop.

Wake up Wal-Mart

The recent drop of Wal-Mart stock proves that you just can’t entice people enough to put up with your shenanigans, even if you’re big box Wal-Mart. If Wal-Mart couldn’t win out over the Christmas holiday with everyone’s pocketbooks strapped, then you have to see that there’s a problem far worse than pricing at this big boxed embarrassment.

The worst thing the big box chain, or any business for that matter, can do is to be oblivious for the reasons behind the drop. Wal-Mart blames their 8% drop in stock value on “inclement weather, poor international numbers, and higher expenses.” Have they not read the astronomical customer complaints that their stores are receiving in record numbers nowadays?

“100% Disabled War Veteran was required to unload his disability cart and reload his purchases into a regular cart in order to take the items out of the store.”

“Customer slipped on water. Customer was scolded by the store manager for not being more careful.”

“Customer returned item due to its malfunction. Item was a replacement for previous malfunctioning item. Wal-Mart employee questioned the customer out loud, in front of large group of customers, as to the proper use of the item. The item? Bed sheets which were missing the elastic around the edges so that they could be put on the bed.

“Customer was called a “liar” by a Wal-Mart employee upon returning 30 minutes later with a bottle of Biotin due to the seal under the lid being broken. Customer had to drive over 20 minutes just to exchange a $7 item and be called a liar in front of other customer service guests.”
“Customer Service” at Wal-Mart has now been deemed broadly on the internet as Customer Torture. In my opinion, sales at Wal-Mart should have dropped more dramatically, but you had so many Wal-Mart customers who didn’t want to fight with the CS reps with a return or exchange so they just ate the money lost and went to Target to buy it instead.

There is a very good reason why Wal-Mart is now a verb, intended to mean a step down from quality ie: “We didn’t have the money to replace it, so we just “wallied” it for now.”

The ineptness runs uphill as well. Tens of thousands of customer complaints can be found on numerous websites including government business sites, and regularly include the accomplice of an incompetent manager or assistant manager. It’s bad enough that these stores bring such strife to the communities, leave behind big empty boxes, and train the consumer to accept the minimum in quality and customer abuse. But there seems to be absolutely NO respite when these valid problems arise either. It just adds insult to injury. Guess it’s high time for the stock prices to wake them up as well. May they continue to fall in accordance to their level of service… after the everyday customers get their money out of the stock, of course.

May Target and other big box stores take their cues from the Wallie Catastrophe and ensure that they do not end up on the same path. If you do, I assure you that you will be dealing with many more smiling customers instead of snarling ones—which by the way makes your employment to your community much more attractive as well.

Copyright 2009 Kellene Bishop. All rights reserved. You are welcome to repost this information so long as it is credited to Kellene Bishop.

Seeds of Preparedness

Many individuals I speak with about emergency preparedness are concerned of the cost of getting prepared and the amount of space they have to store everything. Today’s blog is just one way you can be successful at improving your state of preparedness without being paralyzed by cost or space.

In the fall, garden seeds are typically marked down dramatically. Are these safe to buy and store without immediately planting them in the ground? Well, usually, the answer is yes. I’ll clarify in a moment. Obviously, paying 70% off the original price of seeds is a bargain most can’t walk away from, and the space necessary to store seeds isn’t cumbersome even in a New York City apartment.

So how do you know when the seeds you buy off-season are going to do you any good in years to come, you ask? Ask the store supervisors how the seeds were stored. If they were displayed all summer out in the hot sun, then you’ll need to move on to another bargain. However, if they were stored in the store, or in the store greenhouse area the majority of the time, then you can be safe to purchase and store them for at least another 5 to 10 years. Even better is if you can store them individually packaged but in a larger container to prolong freshness. The key is for you to store them in a cool, dark and dry place. It was a way of life for our ancestors – they stored and traveled with seeds regularly. “Hey honey, be sure to grab the kids and the seeds. The mammoth is leaving soon.” Don’t let the modernization of a greenhouse throw you off your instincts.

Seeds are full of great nutrition as sprouts. An added bonus with this practice is if your seeds do sprout, then you know they are good and nutritious. In fact, in some cases, the sprouted seeds are MORE nutritious sprouted than as full grown plants, though perhaps not as enjoyable to eat. So, if you’re in doubt, prior to planting seeds in the typical manner, take a few and sprout them in doors. Sprouting typically involves water, some cheesecloth, and a small mason jar. Think about it – in an emergency, you’re not exactly going to have time to plant your seeds and then wait for the harvest if you’re starving and other food supplies are cut off. Some seeds take only 24 to 48 hours to sprout. As long as you have water (see my last blog) you’ll be able to survive that long without food while you’re waiting for the sprouts to develop.

And while I’m on the topic of sprouts, even though it’s a bit off topic of saving space, dried legumes and wheat grains are EXCELLENT sprouting resources. They are also quite easy to sprout and their nutritional value is dramatically compounded in this state. Additionally, wheat grains and dried legumes store for extremely long periods of time in a cool, dry, dark space, and the sprouting is virtually effortless. (In fact, my husband and I accidentally sprouted some lentils in our basement when we didn’t completely clean up a spill. Some the seeds had fallen down a drain pipe next to the water heater and sprouted soon after with nothing but moisture — no light.)

So I say take advantage of the seed sales you get at the end of the summer and in early fall. They are typically every bit as good and will store quite well. Whether you want edible vegetables and flowers, or showy foliage, go ahead and save a bundle of money! The space you save on “food storage” is great as well.

Copyright 2009 Kellene Bishop. All rights reserved. You are welcome to repost this information so long as it is credited to Kellene Bishop.

“For Mature Adults Only”

I recently received a marketing book which had a blurb on the cover that warned me that the subject matter was not exactly something that one would share at church. While it certainly was not pornographic at all, several of the marketing highlights had to do with sales tactics used by a former “Madame” in New York City. While I appreciate a warning that something may be offensive to some persons, I take stronger offense to the term “Mature adult content” instead. Who in the world ever decided that one’s ability to tolerate raunch, foul language, and inappropriate conversations was an act of maturity??

I looked up the definition of “mature” with my good friend, Webster, and there is nothing noted in the official definition that would denote the word “mature” as meaning “less sensitive to offensive vocabulary,” “tolerant of a broad range of views,” “apathetic to societal indecencies,” etc. In fact, the word mature relates to “coming to a condition of full development” or “having attained a final or desired state.”

I’m sorry, but when I hear someone ridiculously use the “F” bomb I don’t automatically think, “Oh, this person has attained their desired state.” Instead I feel sorry for the person who clearly has no broader repertoire of vocabulary to choose from and wonder what school district they attended, etc.

When I overhear a vulgar conversation about things which I feel should be kept private or even sacred, I don’t envy the “mature” conversation that is taking place without me and I don’t find myself thinking “Wow, these adults have ‘come to a full development’.” Instead, I cringe at the obvious lack of tact and social graces these individuals are displaying at their present state of lowness and silently pray that they wake up some day to a more worthwhile part of themselves.

I don’t see vulgar, offensive, raunchy, or questionable actions or words as a sign of maturity or intelligence--in fact quite the opposite. I see it as an indicator of one’s lack of ability to think for themselves instead of joining the dumbed-down, apathetic masses. I see a lack of intelligence. I see a lack of beauty. I see an erosion of society and the worth of our human race. Ironically, one of the definitions of “mature” as noted by Webster is “belonging to the middle portion of erosion.” Now that, I believe, is a more fitting definition that I hope to remember the next time I’m “Warned” of “mature content.”

Copyright 2009 Kellene Bishop. All rights reserved. You are welcome to repost this information so long as it is credited to Kellene Bishop.