Letter Never Sent

Back when I was sixteen years old and bussing tables at “The Hungry Farmer Steakhouse”, I had a sure-fired way to let people know we were closing. When closing time came around I just started sweeping the dining room and putting the chairs up on the empty tables. If you were still eating, you got the hint. We wanted to go home. If you didn’t get the hint, I might lean on my broom and glare at you.

Tonight, I was up at the local library here in Lewisville and they had a novel way to tell me it was time to go home. Now, most libraries have an intercom system to tell patrons it’s closing time, but Lewisville Public Library adds a nice touch to it. At 30 minutes to closing, they play a recorded message that the library is soon closing. Then at 15 minutes till they announce again and start playing mellow classical music. It’s not jarring, but it’s different from the usual silence so you feel something about the library has changed. It’s enough that you are mindful of the need to leave. Then at 10 minutes to closing they announce one more time and the music changes to a bubbly jazz music as if to say in a friendly way, “Bounce up and dance on out of here. We’ll see you the next time around.” I wasn’t bold enough to see what happened after that.

I was startled when my 18 year old cousin told me to “email” him on MySpace. I asked, “No, what is your email address? So, I can actually send you an email.” Email = MySpace? Since I’m not a user of MySpace’s closed garden, basic old-fashioned open-protocol email is how I get in touch with people. He had a Hotmail account, but couldn’t remember it. I was really surprised that he contacts his friends solely via MySpace and the cellphone. But, my guess is a lot of other people his age are the same way. After all, on MySpace only your friends can message you, right?

It just seems like a strange way to do things. I have a feeling a lot of kids these days are comfortable using the Internet, but that maybe they find aspects of it a little complicated so MySpace and Facebook have a natural appeal. It’s easy. No need to manage multiple accounts for blogging, photos, messaging, etc. Just sign up for whichever social network is hot and go crazy.

I take it for granted that not everyone enjoys the challenges that come with some stuff on the Internet. So, I get it now. I think. Social networks make the Internet easy by keeping everything all in one place. It’s like AOL, but not old-skool AOL, which is for old people. Is that it?

I have this tendency to draw weird looking creatures. More alien than monster, but nonetheless. I guess it’s more difficult to draw real people. More difficult and maybe more boring.

Recently I’ve started seeing Elvis Presley everywhere. In just one week, I spotted him on a car window shade in the CVS parking lot and on a trio of limited edition Pez dispensers at Wal-mart. I knew that his estate sold his likeness and merchandising rights a few years ago and I guess this is the fruit of the deal. I’m no big Elvis fan, but there is something morbid and distasteful about the use of dead celebrities to sell stupid crap like candy and sunshades. You are not buying memorabilia, you’re just buying a piece of plastic shaped to look like a guy who died on the toilet. In our lazy consumer culture, buying junk to stick on our car is the closest we come to an expression of reverence.

On a side note, in researching the merchandising deal, I saw that Elvis’ estate sold the rights to his likeness and merchandising rights for $100 million back in 2004. These rights brought in $49 million this year alone, so it looks like the Presley family sold too low. It might have been a better move to lease the rights.

Why is financial literacy missing from a standard public education? I started thinking about this because I recently heard about this down-payment “gift” program targeted at low-income home buyers run by a biblical-sounding “non-profit” organization known as the “Nehemiah Corporation of America“. As far as I understand it, this is how it works:

Let’s assume I’m a single mother making $15 an hour and I want to purchase a home. I might be able to swing a mortgage payment, but there’s no way I’m going to be able to save up the 10% or so down payment that is usually required to secure affordable financing for a home. I go to the Nehemiah Corporation, they talk to their friends who are looking to sell some overpriced houses with higher interest loans to borrowers with poor credit in areas without a lot of buyers. Nehemiah gets the seller to give up 2-3% on the purchase price (which they probably would have done anyway during real negotiations) and they use this to fund the down payment, which is provided by Nehemiah until the sale is complete. After the deal is closed, Nehemiah receives its money back in addition to a $500 processing fee that is built into the buyer’s loan. Basically, in this situation the buyer is financing the 2-3% down payment in a very short-term manner for a $500 fee. If I’m buying a home for $150,000 the 2-3% FHA required down payment is $3000-$4500. As I only need the loan long enough to close the deal in a week or two, my effective interest rate based on the $500 fee to Nehemiah is 11% to 16.7%. That’s not horrible except that your effective loan term is zero.

So, what’s wrong with all this? The problem is that these down payment “gift” programs allow people to buy homes who should not be buying homes. People who lack the financial discipline or income to put together even the most modest down payment. They also allow sellers to take advantage of federal housing laws and federally guaranteed loans in order to unload over-valued properties to unsophisticated (stupid) borrowers. This is not even taking into account the collusion with appraisers to manipulate appraisal values. With the borrowers putting none of their own money down, they are more likely to enter risky arrangements and to eventually default on these taxpayer-funded loans.

Basically, these so-called non-profits (whose management no doubt make incredible salaries) are masquerading as quasi-religious charities, which end up misleading buyers and defrauding the government when properties enter foreclosure. If you scratched the surface, I would expect to find ghetto real-estate speculators and groups like the Nehemiah Corporation in bed together. This is no surprise here in Dallas where religion and business go together like chocolate and peanut butter.

Nonprofits fight ban on home loan `gifts’: HUD sued in attempt to overturn decision to halt seller-financed down-payment help:

The U.S. Department of Housing and Urban Development granted AmeriDream Inc. and Nehemiah Corporation of America temporary extensions. The organizations are the nation’s largest nonprofits working to arrange down payments for loans backed by the Federal Housing Administration. They are suing HUD over the rule change.

The law forbids sellers from paying down payments for buyers who secure loans through the FHA. Down payments show that borrowers have savings. They also give buyers equity or a stake in the house.

For years, however, sellers have been able to get around the law by forwarding down-payment money through special nonprofits.

The Observer has found a high rate of foreclosure in FHA-backed loans in the Charlotte area, especially when those loans involved an arranged gift from a charity to cover a borrower’s down payment.

The Observer reported in September that FHA loans accounted for almost a quarter of recent foreclosures in Mecklenburg County.

“Loans are twice as likely to go into foreclosure” with seller-financed down-payment assistance programs, said Bill Glavin, special assistant to the Federal Housing Administration commissioner. “People’s lives are at stake.”

He told the Observer that high numbers of foreclosures in FHA-insured loans threaten to bankrupt the system.

“The default rate on those loans was so bad that if they continued, starting this fiscal year, we’d finally start to pay out more than we’d take in,” he said.

HUD Defeated on Down-Payment Assistance:

The decision was heartening, said Scott Syphax, Nehemiah chief executive. “That is not to say that we don’t believe that there are issues that need to be addressed and standards that need to be raised,” he said.

The nonprofit group supports some tougher standards for the programs, such as homeownership education and a requirement that appraisals be done at arm’s length to prevent manipulation, he said. “We continue to hope that a sensible common ground can be achieved.”

Halloween is a holiday like no other. It’s a good entry into the holiday season: light on the symbolism, heavy on the community involvement. Now that I can afford as much candy as I want I’m no longer under the thrall of candy. But when you’re a kid, few things are as compelling as candy. Where does it come from? Why does it taste so good? Why can’t we eat it for dinner?

When I was a kid Halloween was my favorite holiday. It combined many of my interests: free stuff, candy, and grossing people out or being silly. When I was about 11 or 12, I was into “special effects”. I had several different latex masks and an assortment of fake moustaches and books on the subject I had picked up at various places including the Clown Factory in San Antonio. For some reason, San Antonio had a lot of options when it came to Halloween costumes and magic stuff. There was Elbe’s on Broadway with the wooden nickels, and a few other places I am forgetting.

For Halloween I would often make my rounds and then come home, change into another costume, and go out to the same houses for more candy. It was a once a year situation, so you had to make the most of it.