The Big Bang Theory

Speaking of quotes - this exchange is amazing:

Leonard: Do you want to join us for Thai food and a Superman movie marathon?
Penny: Wow, a marathon, how many Superman movies are there?
Sheldon: You're kidding, right?
Penny: You know, I do like the one where Lois Lane falls from the helicopter and Superman swooshes down and catches her. Which one was that?
Leonard Sheldon Wolowitz: One [Raj holds up one finger]
Sheldon: You know that scene was rife with scientific inaccuracies?
Penny: Yes, I know men can't fly...
Sheldon: No, no, let's assume that they can...Lois Lane is falling, accelerating at an initial rate of 32 feet per second per second...Superman swoops down to save her by reaching out two arms of steel...Miss Lane, who is know traveling at approximately 120 miles an hour, hits them and is immediately sliced into three equal pieces.
Leonard: Unless Superman matches her speed and decelerates.
Sheldon: In what space, sir, in what space? She's two feet above the ground. Frankly, if he really loved her, he'd let her hit the pavement. It'd be a more merciful death.
Leonard: Well, excuse me! Your entire argument is predicated on the assumption that Superman's flight is a feat of strength.
Sheldon: Are you listening to yourself? It is well established that Superman's flight is a feat of strength. It is an extension of his ability to leap tall buildings, an ability he derives from Earth's yellow sun!
Wolowitz: And you don't have a problem with that? How does he fly at night?
Sheldon: Uh, a combination of the Moon's solar reflection, and the energy storage capacity of Kryptonian skin cells.
Leonard: I have 26 hundred comic books in there; I challenge you to find one reference to "Kryptonian skin cells".
Sheldon: Challenge accepted.

Science of Superman - watch the clip here.

Leonard: Do you realize that if Penny wakes up there is no reasonable explanation as to why we're here.
Sheldon: I just gave you a reasonable explanation.
Leonard: No you just gave me an explanation; it's reasonableness will be determined by a jury of your peers.
Sheldon: Don't be ridiculous...I have no peers.

A friend of mine has some close associations with the producers and the creative team behind the show. She got me hooked on the show - and now I can't stop. It airs on CBS on Monday's at 8pm. Please watch!!!

My Jukebox III...

I have spent a lot of time listening to my iPhone the last few days. I spent a large portion of the day on Tuesday and Friday traveling. Therefore, many different themes emerged as I was thinking about the songs that I like to listen to. As well as a lot of thoughts in general...

1. Why are there no Brian McKnight songs in my iTunes yet?
2. When did I start listening to so much Country music?
3. What does Taylor Swift say about...forget it...

Themes...

1. All sappy songs I love
2. All 80s songs that I love
3. All Boyz II Men songs that I love
4. All Sugarland songs...
5. All Kenny Chesney (3 time Entertainer of the Year - CMAs)...

Anyway - I digress - those things will have to happen on another day or post. My new 8 songs:

1. American Pie - Don McLean

I remember being a kid - driving to my grandparents house in the summer - my dad listening to the radio (KRTH 101.1) and this song coming over the speakers. I guess I like reminiscing!

2. Smack That - Akon feat. Eminem

Sign you have seen a movie too many times. When you try to offer an explanation for why you like a song by Akon with Eminem and the only thing that pops into your brain is the following exchange from Superbad.

Mindy: Kinda looked like Eminem.
Officer Michaels: Ah, an M&M...
Officer Slater: M&M, so he was like circular...
Mindy: Marshall Mathers. Eminem, the rapper, Eminem.
Officer Michaels: He looked like this? I'm an amateur.
Officer Slater: 'Cause that kinda looks like an M&M.
Officer Michaels: Longer face? Bigger nose? Would you say his mouth was wider? Open? A gap?

3. Just A Dream - Carrie Underwood

I love the emotion that she sings this song with. Huge Carrie fan - she will be mentioned her a lot.

4. Come On, Let's Go - Ritchie Valens

Ok, so this guy had 6 hits including a couple of # 1s in his career. A career that began in May of 1958 and ended with his death in February 1959 - 8 months! Oh, did I mention that he was 16/17 years old...amazing!!!!

5. Lying Is The Most Fun A Girl Can Have Without Taking Her Clothes Off - Panic! At The Disco

How long is this title? Add it to the group name and it is almost unbearable - but I am a big fan! I guess I have a little Seth Cohen in me too. These guys are way emo!!!

6. Regulators - Warren G feat. Nate Dogg

When this song came out, my buddy Daniel and I would record songs off the radio. When this song came out, my buddy Daniel and I left school after 2nd period to get the CD. Regulators, mount up - I love this song!

7. When I'm Gone - 3 Doors Down

No story...just a kick butt song!

8. God Only Knows - The Beach Boys

My dad owned a drywall company when I was a kid - Alpine Drywall. My memories of that company are this - we would work on one job, and throughout the day we would drive to the other jobs to check on them. We would drive his 1989 Toyota pickup truck. He would buy me a 16 oz glass bottle Dr. Pepper (the only perfect way to enjoy a Dr. Pepper). We would chew sunflower seeds and listen to one of the these: Alleluia (a compilation of testimonies and hymns), sports talk radio (The Loose Cannons or Lee "Hacksaw" Hamilton), an old Alabama cassette (more on this later) or an old Beach Boys cassette. God Only Knows why I think about these things...

Foreclosure Lists - updated!!!

Corona
Norco
Mira Loma
Riverside

Optimists, look away now....

...is the subtle beginning to a small 4 paragraph article that appears in The Economists. I had an open mic last week and I ranted and raved about the "option ARM", "pick-a-pay", or "negative amortization loan". And this week I come across a disturbing - albeit old article (8.14.08) - from The Economist.

Here are the high(low)lights of the article:

1. 1.4 million households have the "option ARM"
2. Most of them are in California
3. Delinquencies have risen from .49% in Q4 2007 to 3.91% in Q2 of 2008
4. Most payments will surge between 60-80% when the loan recasts
5. These loans account for 45% of Wachovia's portfolio (remember I said watch Wachovia)
6. These loans account for $500 billion dollars in loans
7. The majority of these loans will begin to recast in 2010 to 2011

Commentary - 2007 and 2008 were just the beginning of what is to come. I don't know if the bailout can stem the tide that is coming, but the worst is on it's way. The horizon has more foreclosures and more bank failings.

If you want - you can read the article for yourself - option ARM!

Amazing things you see...

A few weeks back a friend of mine asked me if I could help his sister buy a house. Ever since the first time we went out looking at homes we have seen some of the most amazing things. We have been in 20-30 homes and in at least 25 homes there has been extensive remodeling or additions.

Most phones have cameras on them, and most of the time I don't think to use my camera. However, these 3 pictures I could not help but snap. Please remember - I am not a photographer.



Yes - this is a restaurant booth in a house!



In case you are not sure what this is - it is a toilet in the coat closet! They installed a working toilet in the coat closet!!!!!



This is a kitchen off the master bedroom! The house had 3 working kitchens!



I love this sink - how often do you see a sink like this????

Good Luck!

More Banks on the Brink...

Pomona First Federal and Downey Savings are the newest members of the bank meltdown of '08. Here are some facts:

1. 22 banks have failed in 2008
2. 2 huge banks (including the biggest ever - WaMu) have collapsed
3. The biggest may still be yet to come - Citi

I completely understand why WaMu and Downey failed. Both of these institutions promoted and wildly sold the 'option ARM' home loan. This loan literally turned your house into a credit card. The borrower was basically allowed to make a chose as to which payment the wanted to make.

- minimum amount due
- interest only
- 30 year amortized
- 15 year amortized

Let me illustrate a little further. You went to buy a house for $300,000. The prevailing interest rates are (hypothetically) 6%. The 30 year fixed rate payment would be $1,798.65 principle and interest. The 5 year interest only payment would be $1,500.00. However, the 'option ARM' payment coupon would look like this:

$964.86 - minimum (based on 1% amortized 'start rate')
$1,325.00 - interest only
$1,665.91 - 30 year amortized
$2,419.51 - 15 year amortized

The last 3 were based on the 'current interest rates' for the option ARM. The rates for the option ARM were calculated by adding a margin (bank profit) to an index (MTA, COFI, COSI, CODI, LIBOR). All of these indices were operating at unbelievably low rates during '03, '04, '05 and parts of '06. However, the dirty little secret of the option ARM was that the interest rate was adjusting EVERY month. It was only moving inches at a time, but over 2 or 3 years inches become a mile.

Ok, we haven't gotten all of the nuances of this loan out yet. Probably the most dangerous part of the option ARM was the promise that the loan payment would NEVER increase by more than 7.5% per year. How does that work? Well, it simply means that the minimum payment on our above hypothetical will look like this...

$964.86 - year 1
$1,037.22 - year 2
$1,115.01 - year 3
$1,198.64 - year 4
$1,288.54 - year 5

Also, the difference from the minimum due and the interest only option was added to the back of this loan. Meaning any money you did not pay each month was added to your principle balance.

Lastly, after 5 years this loan recast itself. Meaning that it became a 'regular' loan from that point on. By regular I mean, you had to start paying it back! So, how does this effect our example above?

First, let's assume that interest rates stayed flat for 5 years. Second, we are going to assume that the buyer makes the minimum payment option (c'mon this is America). So, we are going to come up with the 'best case scenario' for this buyer.

$4,321.68 - deferred year 1
$3,453.36 - deferred year 2
$2,519.88 - deferred year 3
$1,516.32 - deferred year 4
$437.52 - deferred year 5
$12,248.76 total deferred

So, now our buyer is getting their loan recast. But, instead of it being $300,000 - it is $312,248.76. And, instead of it being 30 years, it is 25 years. So the new monthly payment is - $2,011.83. Meaning that their payment is approximately $750.00 per month more in month 61 than it was in month 60. To compound matters the real estate market is tanking (the house they owe $312,248 for is worth $200,000) and interest rates are up (LIBOR was 1.339 in January of 2003, it was 3.9091 in January 2008).

The last bit of bad news about this is that most Americans did not buy the $300,000 house. They bought the $600,000 house because they could afford the minimum payment and could for the next 5 years - because their loan officer could show them the 'fixed' minimum payment for 5 years.

This is just one of the "toxic debt" instruments that is weighing down the financial institutions in America (and the world). Alan Greenspan actually supported this loan during his tenure as the head of the FED but it may turn out being the loan that brings this country to our knees. Wachovia may be the next big bank to fall because they actually started this loan when they were World Savings.

Updated Repo List

Ok, sorry about the list changing. My superiors at Zip keep changing the area that I service. The area that I used to cover was a huge rectangle from Corona to Redlands to Moreno Valley to Hemet to Temecula - ok, that was a huge area!!! So, they changed it to Corona to Riverside to Chino Hills to Ontario...ok, so that is still pretty big! So, they changed it again.

These 4 cities constitute my current area that Zip wants me to work. I have 6 months to help all of you that are not in my current area. This is great timing since it will coincide perfectly with ending of the First Time Home Buyer Tax Credit - errr, Interest Free Loan.

Anyway, please email me and I will add your city to my blog!

My Jukebox II...

Here is my iPhone playlist for this week...

1. All Summer Long - Kid Rock

Ok, credit Kenny Chesney with this song - I am big fan of his song Summertime and this jam by Kid Rock reminds me of that song. Plus, it sounds like something from the 70s and 80s.

2. Far Away - Nickelback

Didn't I say that I was sappy about these types of songs?

3. Don't Think I Don't Think About It - Darius Rucker

Ok, I am a closet Hootie and the Blowfish fan...

4. How Do You Want It - Tupac feat. K-Ci and JoJo

I love Pac - I Get Around is one of my favorite songs of all-time. Jodeci is one of my favorite bands of all-time - so I love their collaboration!

5. Better As A Memory - Kenny Chesney

This song is about a guy telling a girl - I am not a guy for the long haul. I am better as a memory than I am in real life. Sometimes, I feel like this...

6. Now That We're Done - 112

I just love the blend of these guys voices...did I mention that I am a huge R&B fan? Boyz II Men are #3 on my list of favorite artists - Kenny Chesney and Sugarland are #1 and #2 respectively.


7. Photograph - Def Leppard

I am a sucker for 80s rock. This could have been any song from Hysteria...

8. She Goes All The Way - Rascal Flatts feat. Jaime Foxx

Very interesting blend of vocals - Gary and Jaime make some really good sound together. The content may be a little questionable, but that may be true of all of these songs...

Foreclosure Lists - update!

Corona
Norco
Mira Loma
Chino Hills
Chino
Ontario
Riverside
Crestline
Lake Arrowhead - none added!
Running Springs
Big Bear

Tax Credit

There has been a lot of talk about the tax credit for "first-time homebuyers". Here are a few of the details.

1. First-time homebuyer
2. Home must be purchased between April 9, 2008 - July 1, 2009.
3. Must be a principal residence

The credit is equal to 10% of the home purchase price capping out at $7,500. This "credit" is essentially an interest free loan from the government. I say that because it MUST be re-payed over the next 15 years. You pay it back either from your refund or by paying more taxes ($500 per year). There are also some income restrictions. If you make more than $95,000 (single) or $170,000 (married), then you get no credit at all. At $75,000 (single) and $150,000 (married) the tax credit begins to decrease. All of this is based on your modified adjusted gross income.

Please check out this link for a lot more information about this tax credit.

You gotta love this market...

I pick up my phone a few days ago in an effort to keep myself on task. I see my next call is a listing agent that I am waiting to hear from about an offer I have submitted for my client.

Here is the backdrop...we submitted an offer for a home in South Corona last Monday. The home is owned by GMAC and they required their own lender to approve the buyer. My client calls the lender, sends their documentation and we wait. On Friday we receive the pre-approval letter and notice that our offer has finally been submitted to the bank. Monday I left the listing agent a message attempting to find out the status of our offer. On Tuesday, they call me back.

"We have a counter for your buyer," the agent says. They rattle off the terms of the counter and tell us to get back to them.

The next morning I call the agent (after discussing things with my client) accepting the terms.

Now, we are caught up to this morning. I call the agent. "Do we have addendum's for the property," is my question to them. "Oh, your client didn't get the house," is their response.

At the end of the day the other agent negotiates with more than one buyer without telling anyone that there are multiple offers in on the property. They sit on our offer for 10 days before they get back to us with a rejection.

Obviously, my clients are very disappointed...you get a counter offer in this market that isn't "highest and best" and you feel good about your chances. You agree to the terms that the bank sets out for you and you like your chances.

The only problem is unethical agents who do not know how to negotiate in good faith! Good luck to this particular agent once the REO market dries up...I predict he is going to have a VERY hard time finding agents who will work with him.

Repo Lists

Corona
Norco
Mira Loma
Chino
Chino Hills
Ontario
Riverside
Crestline
Lake Arrowhead
Running Springs - no data available!
Big Bear - no data available!

My Jukebox...

So I was listening to the radio today and the guys were talking about the songs on their iPod. Well, I thought it might be interesting to blog about the songs that are currently "in" my iPhone...since I don't own an iPod. By "in" I mean the 8 songs that I am listening to this week while I run. I try to run 35 minues a day and that usually translates to about 8 songs.

Without any further ado...

1.) Don't Stop Believin' Journey

I don't know when I started liking Journey or when I started liking this song but it rocks. It might be because Ryan Atwood liked Journey. Who knows?

2.) Best of You Foo Fighters

Thank Pete Carroll for this song. Just asks a simple question...is something getting the "best of you"? Is my job, my family, my run...God...getting the "best of me"?

3.) Wishing Sugarland

I know I am pretty sappy...but there is something about ballads and Jennifer Nettles voice that gets me everytime!

4.) Stronger Kayne West

"work it, make it, do it, makes us
Harder, Better, Faster, Stronger"

Makes me want to be stronger!

5.) Humps for the Blvd Rodney O & Joe Cooley

This songs just kind of amps me up...it is music (loose use of the word) that my wife hates. It is over the top, but it reminds me of high school...and a much more athletic time of my life.

6.) He Stopped Loving Her Today George Jones

Ok, I am all over the place. I love Country music and George Jones is one of the bests ever! This song is sad, but I love listening to his soothing voice.

7.) Just As I Am Nichole Nordeman

"What kind of love in injury's place,
would leave instead the stain of grace?
So I come in sorrow and I come in shame.
I come to the cross with my pain."

These lyrics are amazing and Nichole's voice is great. I know that you should never mix business with Religion but this is who I am.

8.) Camisado Panic! at the Disco

"Can't take the kid from the fight
take the fight from the kid
Sit back, relax
Sit back, relapse again
Can't take the kid from the fight
take the fight from the kid
Just sit back, just sit back"

I have no idea what the song is really talking about...but this section really keeps me going through the last 1/2 mile to the end of my run.

Small diversion! Here are some things you can write down...our next look at my iPhone will definitely contain some Kenny Chesney and Brian McKnight...my hands down favorite two singers.

Back to real estate and financial planning and economics and politics...ok the last 2 I haven't been hitting on them yet, but they are coming soon!

Economics

Ok, so I read this today and absolutely love it. Read it...let me know any thoughts that you have!!!!

Bar Stool Economics

Suppose that every day, ten men go out for beer and the bill for all ten
comes to $100. If they paid their bill the way we pay our taxes, it would
go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest ) would pay $59.

So, that's what they decided to do. The ten men drank in the bar every day
and seemed quite happy with the arrangement, until one day, the owner
threw them a curve. 'Since you are all such good customers, he said , 'I'm
going to reduce the cost of your daily beer by $20. Drinks for the ten now
cost just $80.? The group still wanted to pay their bill the way we pay
our taxes so the first four men were unaffected. They would still drink
for free. But what about the other six men - the paying customers? How
could they divide the $20 windfall so that everyone would get his 'fair
share?' They realized that $20 divided by six is $3.33. But if they
subtracted that from everybody's share, then the fifth man and the sixth
man would each end up being paid to drink his beer. So, the bar owner
suggested that it would be fair to reduce each man's bill by roughly the
same amount, and he proceeded to work out the amounts each should pay.!?
And so:

The fifth man, like the first four, now paid nothing (100% savings). The
sixth now paid $2 instead of $3 (33%savings).
The seventh now paid $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued
to drink for free. But once outside the restaurant, the men began to
compare their savings. 'I only got a dollar out of the $20,'declared the
sixth man. He pointed to the tenth man,' but he got $10!' 'Yeah, that's
right,' exclaimed the fifth man.? 'I only saved a dollar, too. It's unfair
that he got ten times more than I!'? 'That's true!!' shouted the seventh
man. 'Why should he get $10 back when I got only two? The wealthy get all
the breaks!' 'Wait a minute,' yelled the first four men in unison. 'We
didn't get anything at all. The system exploits the poor!'? The nine men
surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat
down and had beers without him. But when it came time to pay the bill,
they discovered something important. They didn't have enough money between
all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our
tax system works. The people who pay the highest taxes get the most
benefit from a tax reduction.? Tax them too much, attack them for being
wealthy, and they just may not show up anymore. In fact, they might start
drinking overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.
Professor of Economics, University of Georgia
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.

Foreclosure List

Corona
Norco
Mira Loma
Chino
Chino Hills
Riverside
Ontario
Crestline
Lake Arrowhead
Running Springs - none available!
Big Bear