Category Archives: Real Estate

Foreclosure 101 from LA Times: Link and Thoughts

February 15, 2009 – 7:33 pm

Given the widespread nature of our current economic troubles and the number of people having issues making their mortgage payment, there are a lot of players in the market who are trying to help consumers. Some of these players are legitimate and well-intentioned…and unfortunately, some are not. When in doubt, I always prefer to direct people to government, government supported, or non-profit resources (i.e., free resources).

Here is an LA Times article that provides good information on the foreclosure issue, including contact information for government/non-profit resources available to homeowners in trouble in the Los Angeles area.

One key and obvious issue the article mentions and which I’d like to re-iterate is this: we can debate many aspects of how to best act when you are unable to make your mortgage payments in full and on time, but one thing we should not debate is this: avoiding the problem and not doing anything is the wrong answer. Unfortunately, too many homeowners do just this – avoid addressing the issue until it’s too late. If you don’t feel comfortable calling your Bank/servicer, contact one of these independent resources and try to be proactive in addressing the issue.

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Real Estate

Mission and Vision for HausAngeles

February 12, 2009 – 8:39 pm

A recent blog introduced you to “HausAngeles” and described what we do, the geographies we serve, what’s unique about our approach and who’s on the team. If you missed that blog and related newsletter, please click here to check it out: Introducing HausAngeles. Now, I’d share with you our mission and vision for HausAngeles. You can listen to me describing this live or read the text below:

Foundation: HausAngeles – and it’s vision and mission – are grounded in who we (the co-founders of HausAngeles) are as people and what we’re trying to accomplish in life. Here are the key drivers:

1. Our Passions and Interests: AV and I have the following key passions and interests (which are reflected in both our educational and professional experiences to date): Public Policy/Economics, Problem Solving, Business/Marketing, Architecture/Design and Technology. We plan to create a business that “connects these dots” in a way that could sustain our family consistent with our values.
2. Our Values and Principles: We are building a business that reflects who we are as people in 2 key ways: (a) It’s not just about making money, but in a significant way about giving back and helping others; (b) We always do what we believe is right, no matter what
3. Our Family and Life Goals: We are highly family oriented and love Los Angeles (where we live). We want to create a business that is local and doesn’t require regular travel.

Mission: With a foundation in the above principles/goals, our mission at HausAngeles is to:

1. Solve real problems on the ground: As we all know, there are plenty of problems in the real estate market right now particularly in the area of foreclosures and foreclosure prevention
2. Improve the practice of real estate: In particular, we see a need and opportunity to:
a. Better educate and inform consumers on the market situation and also the real estate/mortgage process. This includes everyone given how complex the mortgage and real estate process is, but particularly those that are less educated and looking for homes in the lower priced ranges.
b. Improve the level of professionalism and ethics practiced in real estate
3. Help people and create opportunities: We are passionate about helping those less fortunate than us. As founders of a private company, we can make our company anything we want and so we decided to become social entrepreneurs by:
a. Donating 10% of our earnings – before either AV or I get paid – to help people in need or to create opportunities for those that lack them such as the kids that live in public housing developments
b. Donating more when we make more: For transactions over $1million, we will increase the above number to 15% and for transactions over $2million, we will increase it to 20%

Vision: Based on the above as well as the reality on the ground in Los Angeles real estate, here is vision and focus at HausAngeles:

1. Foreclosure Prevention and Loss Mitigation: Design and implement innovative programs to help consumers, prevent foreclosures, reduce lender losses, and help the housing market find its bottom. We have developed a short (3 pages total) vision on this topic, which is published on this blog. We will be working with key lenders/servicers to design, pilot, refine and widely share (with an open source philosophy) programs consistent with this vision. Stay tuned for an announcement on a key foreclosure prevention program pilot we are slated to launch in the next 30 or so days – in the area of lender assisted short sales.
2. Affordable housing/First Time Home Buyers: In real estate, those generally less educated, less informed consumers who are looking for lower priced “affordable” homes (say in the $200,000 to 400,000 range) and need education/information on the mortgage and real estate process the most….unfortunately receive the worst quality real estate support and education. We think this makes no sense, and will be focusing on supporting this key market with high quality, education driven first time home buyer/affordable housing programs.
3. Investments: We believe it is likely the current down housing market will represent some of the best real estate investment opportunities in our lifetimes. Certainly, we plan to personally “double down” in real estate during this cycle. We will be working with investors, as individuals and in groups, to help them identify and execute on real estate investment opportunities.

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Foreclosure Prevention & Housing Market Stabilization: Thoughts from the Ground Level

February 5, 2009 – 6:30 pm

Please find below a brief proposal I have put together on the issue of foreclosure prevention and housing market stabilization based on what I and the team at HausAngeles as well as our colleagues, clients and strategic partners are actually seeing (and not seeing) on the ground in Los Angeles/Southern California. I and we do not claim to have all the answers on this “massive issue”. Nor do we claim all of the ideas below are mine or ours (please see footnote 1: acknowledgements). However, refining and executing on some or all of these ideas will be a key focus for me and the team at HausAngeles for the foreseeable future and until the housing market stabilizes. Our primary geographic focus is Los Angeles, but we plan to share learnings and information widely and freely to maximize impact at the ground level.

Preventing Foreclosures, Helping Consumers and Accelerating the Stabilization of the US Housing Market

Background and Context

I am the former Chief People/Administrative Officer and CEO Chief of Staff of Indymac Bank, who found herself at the epicenter of the mortgage and housing crisis since mid-2007. I resigned from Indymac after the FDIC placed the company into conservatorship, but decided to continue to focus on the housing/real estate sector where I saw and continue to see tremendous opportunity for positive impact, both personal and professional.

As I have gotten deeper into the real estate market and understood the reality on the ground on foreclosures[1], I have discovered numerous untapped and under-tapped opportunities to better help consumers manage their financial issues/life transitions, prevent foreclosures, reduce lender/investor losses, and help the housing market “find its bottom”. I strongly believe the housing market reaching bottom (or close to it) will mark a crucial turning point in our economic recovery.

Two interesting and important characteristics that I believe many of these opportunities share are:

1. Many (if not most) of the proposed initiatives actually help consumers, lenders/investors and the US economy. This alignment of interests is historic as these stakeholders often have competing objectives, especially in times of crisis;
2. Many of these opportunities require government coordination and support to work effectively and expediently, as key implementation challenges are common across industry players and/or require government support/regulatory changes.

Untapped and Under-tapped Opportunities to Help Consumers, Reduce Loan Losses and Accelerate the Bottoming of the Housing Market:

1. Ensure every homeowner in trouble who can realistically afford to continue to own their home with a modified loan, gets one as soon as possible

* One of the big reasons a large percentage of borrowers in trouble currently don’t get timely help via a loan modification is literally because they don’t respond to letters from their Bank. It’s not difficult to understand this behavior: consumers delinquent on payments are scared to open/respond to letters from the very organization that they owe money to (which they are not sure they can pay back as promised).
* On the other hand, there are thousands (likely millions) of licensed professionals (e.g., realtors, financial advisors/planners) already living in the same communities as the borrowers in trouble…who are not being leveraged to solve this communication problem.
* So let’s leverage these licensed professionals on the ground to ensure we have evaluated every borrower who is behind on their mortgage to see if there’s a way to realistically help them retain ownership of their home[2].

2. Turn more owners into renters:

* In times of crisis, it’s critical to prioritize what’s most important. My belief is that safety and family are more important for homeowners in trouble than ownership, given the seriousness of the crisis we are facing.
* As a result, I believe we should implement programs that turn some current homeowners into renters without making them move e.g., by transferring ownership of the homes they are living in and love to investors who are looking for income earning assets.

3. Implement systematic, lender supported short sales:

* Where it is not possible for the current homeowner to continue to own their home, we should avoid the foreclosure process (which is painful, time consuming and expensive) and instead facilitate the sale of the home with the borrower and lender working as partners instead of adversaries.
* As someone in the real estate business I can tell you that getting a short sale executed right now is nightmarish. There are no industry standards and most lenders are not set up internally to properly approve/manage short sales. Yet short sales nip the foreclosure process in the bud and are better for homeowners (who would have the opportunity to adjust their housing reality to their economic reality and prospects with greater dignity and respect), lenders and the US economy[3].
* Since systematic, lender assisted short sales are a lower cost option to foreclosure, it may be possible to divert some of the cost savings back to consumers to help them with their life transition (e.g., for relocation and/or other expenses related to their move/life change)

4. Implement rent to own programs to expand demand
* For families who do not have enough saved to make a down payment or qualify for a conventional mortgage but who have jobs/steady monthly income there is an opportunity to create future home ownership opportunities through creative rent to own program designs

5. Expand the nation’s affordable housing stock:
* In many cities across the country there is currently an acute shortage of affordable housing and the existing affordable housing stock is in poor condition. In Los Angeles (where I am personally involved), as an example, we are embarking on a 25 year plan to redevelop our ~10,000 public housing units. Such redevelopment and development programs will take decades and cost billions.
* Why embark on that costly and time consuming process, when we have an excess supply of housing nationwide already? Instead, let’s turn some of these currently empty/lender owned properties into affordable housing and bring hope to those that sit at the bottom rung of the economic ladder in our society.
* I believe Fannie Mae and Freddie Mac REO’s (which are currently being held on these entities’ balance sheets due to recent foreclosure moratoriums), or a significant portion of them, are likely best suited for this purpose. Some of this newly created affordable housing could be transferred to public housing authorities across the nation for management/administration, while some could be sold to investors as income-earning Section 8 or other affordable housing.[4]

Thoughts on Implementation

Given the seriousness of the current housing and economic crisis and my view that housing reaching a bottom will mark a crucial turning point in our economic recovery, I believe a cross-functional, multi-agency, multi-lender task force/team should be put together with a goal of clearing the market of the current total inventory of bank/lender/investor owned single family properties over the next 12 months.

In other words, let’s do whatever we can (after agreeing on some basic principles and philosophies) to try to have the housing market bottom by the end of 2009/early 2010. Once the current inventory has been cleared, we can focus on efficiently clearing the market only of new inventory (which should hopefully be at lower levels with the help of the President’s job creation plan and the effect of some of the above described programs).

Concluding Thoughts

I believe there are 2 key flaws in our current approaches on foreclosure prevention and clearing the market of troubled real estate inventory. First, foreclosure moratoriums, although well intentioned, only “push the ball down the road” to be dealt with at a later time i.e., these moratoriums are reducing supply today and are likely to prolong the duration of home price declines. Second, I believe there is an excessive focus on home ownership as a primary goal, whereas I believe we are ‘beyond ownership’ as a country. Dealing with the housing crisis should be about safety and family, and about reflecting American families’ actual economic reality in their housing reality (as gracefully and kindly as possible). These core principles are a foundation of this proposal.

[1] My views/ideas on foreclosures, REO’s and the real estate market reflect key input and insights from: Tony Ebers, Chief Operating Officer (Indymac), Eric Friedman, SVP Default Management (Indymac), John Olinski, EVP (Indymac), Ron Bergum (CEO, Prospect Mortgage), and Ron Garber, CEO, shortsaleplan.com

[2] Note: The Hope Now alliance does not include individuals including licensed professionals

[3]For example: Short sales result in an ~2year credit impact for homeowners in CA vs. ~5 years for a foreclosure. Also, short sales are significantly less expensive than foreclosures (e.g., legal fees, home damage) and don’t have the reputational stain of foreclosures. Finally, short sales in a declining home price environment result in significantly less loan losses by accelerating the timing of asset sale

[4] I should note that I believe any new affordable housing created should come “with strings” i.e., individuals and families should be committed to learning and earning their way out of government subsidized housing within a defined period of 3-5 years to be eligible to move into the new housing.

Tags foreclosure prevention, foreclosures, housing bottom, housing crisis, housing market crisis, housing market stabilization, loan modifications, short sales | Comments (4)

Business Life Los angeles Real Estate

Introducing HausAngeles

January 27, 2009 – 12:24 am

On November 2, 2008 (which was Diwali, an important national festival in India), I officially decided to “double down” into the real estate market as an entrepreneur. I have wanted to be an entrepreneur for a long time (I even studied Entrepreneurship as an MBA student at Northwestern University in the late 1990′s), and decided if I was ever going to “take the plunge”, the time was now.

I saw and continue to see tremendous opportunity for impact and value creation in the real estate market and am inspired by the immensity of the opportunities in front of us. In the weeks and months since the decision was made, I have co-founded a company we have called “HausAngeles”.

Here is a link to our first newsletter for 2009….which introduces the company:

http://www.hausangeles.com/newsletters/HA_011909.html

Tags avantika, avantika shahi, hausangeles, los angeles real estate, ray mathoda, rayman mathoda | Comment (0)

Business Life Los angeles People Public Policy Real Estate World World Affairs

A Roof Over Every American’s Head: Addressing the Core of our Current Crisis of Confidence

January 12, 2009 – 4:50 pm

What is the #1 worry that most Americans have when they get laid off? I believe it is that they might lose the roof over their and their families’ heads in a worst case scenario (i.e., if they are unable to find adequate alternate sources of income).

Now imagine if the government of this country was able to promise all of its lawful citizens this: “No matter what, you and your family will always have a roof over your head. We know we are in the middle of the greatest economic downturn since the 1930’s and we also know that there has been overbuilding in the housing sector. We have put these two realities together to make a unique promise to all Americans today so that you may feel secure and confident about their family’s safety.”

Do you think the above promise would help the nation stabilize (and possibly even start an economic recovery)? I believe it might because it addresses the very heart of the problem in America today: a lack of confidence in our future and a deep worry (almost and actually a panic in many people) about what this future will bring.

Now, I am not one who believes that every American can and should own a home (even though I do strongly believe in the societal and familial benefits of home ownership). Nor do I believe that we should subsidize home ownership for current home owners any more than we would subsidize it for new homeowners. But we do have plenty of housing available in America today….and the government can and should do more to help those Americans who suddenly find themselves in an economically precarious situation.

The US government already provides rent subsidy at varying levels to the lowest income in our society…primarily through the Section 8 and public housing programs (Disclosure: I am on the Board of the Los Angeles Public Housing Authority, which owns/administers both programs in Los Angeles). So why not expand this concept to stabilize our families in a manner that is sensible, fair and proactive? This might just be the type of bold action we need given the times we are experiencing currently.

Tags crisis of confidence, economic crisis, economic recovery, foreclosures, housing crisis | Comment (1)

Business Life People Public Policy Real Estate

Untapped and Under-tapped Foreclosure Prevention Strategies: “Let a Hundred Flowers Bloom”

December 16, 2008 – 8:39 pm

There is widespread agreement among key national political, economic and housing stakeholders (the government and regulators, consumers and Banks among others) on the need to help prevent foreclosures, keep as many people as possible in their homes, and “clear the housing market” of troubled assets quickly and fairly. This would help the housing market find a bottom more quickly – which housing market bottom will mark a turning point in our nations’ economic recovery.

In the spirit of Barney Frank’s statement “Let a Hundred Flowers Bloom”, I have put together this foreclosure prevention vision (including feedback and insight from Ron Garber, CEO of Short Sale Plan and Eric Friedman, SVP of Loss MItigation at Indymac Bank).

The housing market and economy are facing problems larger than any individual or organization….and it is in this spirit that I am publicly sharing this vision. I would welcome feedback from anyone who has experience in foreclosure prevention and any of the related strategies/areas.

I will be pursuing some or all of these strategies for Los Angeles and perhaps nationally in my capacity as CEO of HausAngeles, and in partnership with Ron Garber, who has spent the last 2 years developing and refining systematic short sales knowledge, education/training, processes/documentation and infrastructure….believing that they are the preferred alternative to foreclosures for all parties involved.

Tags foreclosure prevention, foreclosures, housing crisis, housing market bottom, rent to own, short sales | Comment (0)

Los angeles Real Estate

Buying foreclosed homes…a lot beneath the surface

November 10, 2008 – 10:51 pm

I just read this great article from this weekend’s LA Times describing the reporter’s experience purchasing a foreclosed home. I have seen/heard many similar stories from my business partner Avantika, a top performing realtor in LA who has bid on and sold several foreclosed properties recently….so thought I’d post this article. Call or email her (av@avantika.com) if you want to ask a question, buy/sell a home, or know someone who is buying or selling and could use a top notch real estate agent….in Los Angeles. ray

How I bought a foreclosed home

There were pitfalls on the the way, but an L.A. Times reporter found that research, strategy and being free of loan baggage helped.

By Peter Y. Hong
November 9, 2008

I did not set out to buy a foreclosed house. ¶ Earlier this year, I wrote about selling my condominium unit in 2005 to rent, rejecting the hyped promise of an always-rising real estate market. Now I’ve purchased a foreclosed home — but that doesn’t mean I’ve bought into the new wave of hype in real estate, the idea that cheap, repossessed houses are a sure bet. ¶ There’s usually good reason many foreclosed houses languish with no buyers. They may be badly damaged or situated in places that seemed attractive only in the frenzy of a real estate bubble. ¶ The foreclosure inventory is loaded with properties far from job centers, stripped or even vandalized by previous owners or in abandoned developments with no parks, schools or even neighbors nearby. ¶ As a result, finding a decent house amid the wreckage of the real estate crash can be a long, tedious process. Then, actually buying one can also be tricky. When a foreclosed house in good shape and in a desirable location gets to market, it often attracts multiple offers, even in this struggling real estate market.

But a foreclosed house might still be an easier way to get what you want than trying to get stubborn individual sellers to lower their list prices. In both my day job covering the housing market and my own search for a house, I’ve seen what has worked for many buyers of foreclosed homes.

This is what worked for me.

Click here for the full article:

http://www.latimes.com/business/la-fi-cover9-2008nov09,0,2623620.story?page=1

Tags avantika, foreclosure, los angeles foreclosures, los angeles realtor, real estate | Comment (0)

Business Real Estate

Real Estate Construction Costs: Deflated in LA

November 9, 2008 – 11:59 pm

There has been a constant ‘inflation’ in real estate construction costs over the past few years driven by the usual suspects: high commodity prices and a tight labor/talent market (with high demand for construction labor driving labor costs higher and higher over time).

So recently, I was pleasantly surprised to hear one of our clients (who is involved with redeveloping 2 properties they recently purchased) tell us about their ongoing experience with construction costs. 2 key points to note:

1. The price of development was great i.e., lower than expectations! They had a solid bid to get their work done for about $80 per square foot. Note that the numbers one generally sees for construction costs are in the $150-$250 (or higher) per square foot range. So this is amazing…and the key reason this was possible was due to the really slow labor market right now. People have lost jobs and can’t find work as real estate development has slowed tremendously…so they are taking whatever work they can get, and reducing their rates to “win work”.

2. They actually got a fixed bid on their project! Wow….just a few years ago, no contractor would take on that risk.

I guess in some ways the above should be no surprise. This is how the market works. In a down cycle, things get cheaper…and in some cases much cheaper. However, I don’t think most people realize what a great time it is to construct right now. Good time to buy a fixer-upper (which is already much cheaper than it was a few years ago) and then further add value by improving the property.

PS: I’m talking Los Angeles

Tags construction, construction costs, fixer upper, Los angeles, property construction, property development, real estate | Comment (0)

Real Estate

Elusive Search for the Bottom: Housing Market Update

November 3, 2008 – 10:36 pm

A lot of people around me, especially those focused on buying real estate as an investment in this historically challenging real estate market, are obsessed with when US home prices will “bottom out”. I believe people sometimes focus on finding the lowest home price at the expense of other equally important economic factors such as the cost of construction/”fixing the place” and financing costs…both of which are at historic lows right now, and thought I’d share some of the latest news/information relevant to this topic:

1. The general consensus of economists (this is available from several media sources) is that home prices, which have already tumbled 20% from their peak three years ago, will probably sink another 10% before stabilizing.

2. Per a Wall Street Journal article on October 29, 2008 (see below for an excerpt, and a link to the article), the consensus at a National Association of Home Builders conference recently was that “home prices will bottom out as early as the middle of next year (2009)”.

3. Finally, there were several articles this past week discussing the troubled mortgage modification plan the FDIC has implemented at Indymac since they took management control in July. The FDIC is proposing implementing this type of plan at a much broader level nationally to reduce the total number of foreclosures in the future. I agree that foreclosures are generally bad for everyone involved (including the homeowner and the lender)….and the more that’s done to avoid them systematically, the better. I also believe addressing this issue will help home prices “find their bottom”. While the White House has not made a decision on the FDIC backed proposal yet (and likely won’t till we have a new President), JP Morgan announced over the weekend that it is launching a similar program which should help prevent foreclosure for about 400,000 homeowners. All this is good news from a housing finding its bottom standpoint.

I won’t take an official position on when the market will bottom as I believe it’s already a great time for folks with a long term investment horizon to invest in real estate. And as a wise person once said: “you only know the market bottomed once it’s too late (i.e., once it’s started rising again). But here’s some thoughts on what the above could mean for you:

Selling: If you’re a current homeowner….this is generally not a good time to sell….so unless you believe you must sell for financial or other life reasons (e.g., job change), hold off on selling the real estate you own currently. The key caveat here is if you think you’re going to need to sell in the next 24 months or so. If this is the case, I would consider selling now as you’ll likely maximize your home value by selling today vs. in the near future.

Buying: If you’re thinking about buying for living or investment purposes, then the key is to have a long time horizon (e.g., 5 years or longer). For folks who fall into this category, I believe it’s a good time to start looking at possible opportunities including foreclosures.

Key Recent Articles:

Economists Predict Home Prices Will Bottom Next Year (WSJ, 10/29/08)
When will housing’s sickening slide stop?
According to economists at the semi-annual National Association of Home Builders forecast conference, not soon—though the end is in sight. The consensus: Home prices will bottom out as early as the middle of next year.
I’ve been attending these conferences for years, and last spring’s was the gloomiest I’d ever attended. The latest conference, held last week, was also downbeat, but with a glimmer of hope—many of the economists seemed optimistic that the government’s bailout plan, which includes buying toxic mortgage debt, will lead to housing’s recovery. More affordable prices, pent-up demand, incentives on new homes, fewer housing starts and expected declines in interest rates for fixed-rate mortgages also should help ease the crisis, said David Seiders, chief economist of the trade group.
For the rest of the article, click here (you may need a WSJ subscription to read the full article): http://online.wsj.com/article/SB122522301876377101.html

Massive Effort to Save Mortgages (WSJ, 11/01/08)
J.P. Morgan Chase & Co. launched an ambitious plan Friday to modify the terms of $70 billion in mortgages for borrowers who are behind on their payments or soon could be.
The move by the New York bank will cover as many as 400,000 borrowers. They’ll be moved into loans carrying lower interest rates, smaller principal amounts or other more-affordable terms.
For the rest of the article, click here (you may need a WSJ subscription to read the full article): http://online.wsj.com/article/SB122549543952589677.html

FDIC Plan Tests Limits of Leniency (WSJ, 11/01/08)
When the Federal Deposit Insurance Corp. seized control of IndyMac Bancorp — the nation’s 10th-largest mortgage lender by loan volume — the agency vowed to ease terms for many of its troubled borrowers. In doing so, the FDIC wanted to show the mortgage industry how it could slash home foreclosures by making decisions both sensible and humane.
For the rest of the article, click here (you may need a WSJ subscription to read the full article): http://online.wsj.com/article/SB122548504641688959.html

Tags Business, home prices, housing market, mortgage finance, real estate | Comment (0)

Real Estate

Speculation and accountability in the real estate market

October 30, 2008 – 10:37 pm

It is a well known fact that most if not all asset bubbles are characterized by significant speculative investment activity (and by this I mean investors with very short investment timeframes and expectations). And this was certainly true of the US housing market (and other overinflated housing markets globally) over the last few years. It’s impossible to know exactly how much of the housing market was driven by speculation, as no agency tracks this issue…and even if they tried, it’s impossible to verify someone’s intent. But I sit back and wonder if our society has gotten too lax on “personal accountability”.

I remember a top Los Angeles real estate agent telling me earlier this year about taking a client to go see a home about to go into foreclosure (the home had been an investment property) and being surprised when the owner’s assistant drove up in an expensive Mercedes with the home keys.

I wondered: if the loan is secured only by the home, it sounds like the owner may be “getting away with something wrong”. He handed his keys to the Bank since the home didn’t make investment sense anymore…but it sounds like he has more than enough money (likely profits from earlier more successful investments) put away for himself…so he will be fine even if his credit gets hit for a while.

And then today, a successful female executive told me what she had viewed as a ‘sign’ of the bubble: a few years ago her maid had purchased a 2nd home for investment purposes!

I’m not an expert on foreclosure law. But it does seem like a lot of people including many walking down Main Street, were unrealistic/foolish with their investments. And I’m not sure our laws and regulations have kept up….so that there is fairness and accountability in the system.

Tags home prices, personal finance, real estate | Comment (0)

Business Education Life Public Policy Real Estate

A suggestion for addressing the root-cause of this financial crisis….from a (humble) Banker who has experienced it firsthand

October 13, 2008 – 10:47 pm

One of the fundamental reforms that is nowhere to be seen on the horizon…that I believe is absolutely critical to addressing one of the key root causes of the current crisis of confidence in the global financial markets is the lack of any significant education on the topic of personal finances and money management in middle/high school and college curriculums worldwide, including in the US.

So here’s my idea Mr. Paulson and (hopefully future) President Obama: add a mandatory requirement that every middle school, high school, and college student in America get a basic education in how to think about personal finances (budgeting, money management, borrowing, net worth, financial ethics etc.). The long term benefits of such an addition to educational standards in the US and other countries would be invaluable.

I am regularly amazed by how little formal or informal education any of us receive (unless we have very diligent and focused parents with good personal financial habits…a rarity) on the topic of money. Yet, understanding money and making/managing it (in whatever quantities “work” for each individual) is critical for the achievement of personal success and happiness.

Tags Education, financial crisis, money management, obama, personal finance, Politics, Public Policy | Comment (0)

Business Life People Politics Public Policy Real Estate World World Affairs

If you don’t know it, you can’t fix it? Unsexy but critical: Data/Metrics

November 15, 2005 – 10:58 pm

I was reading an article about the french riots and the core liberal philosophy underlying french society and government. The french believe (rightly) that all people are equal and that race, color, ethnicity shouldn’t matter. As a result, they don’t measure any of their social outcomes by race, color or ethnicity.

No data on whether there are particular ethnic or racial segments of society that are having major problems? No way to fix these problems. If you’ve read the papers at all in the last few weeks, you know what I’m talking about.

Not sexy, but true (to me anyways). You achieve what you articulate and focus on. You fix problems you see. You improve metrics you measure and report regularly.

So why the hell is this the subject of a blog? Well, I’m not sure this is going to be a crowd-puller, but I was reading an article my boss sent me from the Wall Street Journal and I’m feeling validated (enough to share anyways!). The article is about Michael Walker, founder of the Fraser institute in Canada. A few snippets from the article which I totally agree with:

“A debate about government policy isn’t likely to be settled around values. But when there is objective measurement, resolution emerges”

“The dirty little secret of Canada’s single payer health system: that care is rationed through time rather than price”

“I firmly believe that you become what you think about, and that is as true for countries as it is for individuals”

Tags Business, data management, economics, measurement, Public Policy | Comment (0)

Business Real Estate World Affairs

Bullish in Baghdad?

October 24, 2005 – 11:00 pm

“A five-bedroom river-view house sold three years ago for $45,000. Two years ago it sold for $80,000. It sold a third time in August for $300,000. Who would have guessed it was in Baghdad? The place is a disaster, and keeps getting worse. Despite the violence, property values have increased close to 1,000% in the past three years in parts of town. Go figure.”

I was struck by the above quote (and information)in a real estate newsletter I recently received.

Besides providing a fascinating peek into an Iraq dynamic I wasn’t aware of, this quote brought to my mind an issue that is popping up more and more for me.

Where does one go for the real story nowadays? The world is globalizing…but the media seems incapable of providing a balanced view of ‘reality’. Is it time for a brand new non-profit, non-political, non-partisan global news organization?

Tags communication, home prices, information access, iraq, media, public affairs, real estate | Comment (0)

Real Estate

Religion/Tradition or Modern Values: Must one win for peace to reign?

July 11, 2005 – 11:18 pm

As I look at the world around me, I see a common theme in many of the major battles, controversies and issues both the world at large and many of us personally are experiencing. This is the battle between the ancient and the modern, and specifically between religious beliefs (as expounded by the religious establishment and religious/cultural communities worldwide) and modern principles (as intuitively adopted by the educated and liberal around the world).

Here are a few examples of the battles and controversies I am talking about, not in order of importance:

1. The rise of Hindu fundamentalism in Indian politics…and the battle of this fundamentalism with secularism (witness the umpteen incidents of hindu-muslim violence in recent years)
2. The religious right in the US trying to keep Terri Schiavo alive…a woman who had been brain dead for years and kept alive in a vegetative state she would have most likely been horrified to choose via a conscious decision
3. The internal struggle my Princeton educated Pakistani friends felt as they experienced a ‘liberal arts education’ and felt guilty about all the sins (a drink?) they felt like experiencing but knew they would regret after dying as they walked on a thin thread over fire
4. Certainly the real war on terrorism…the one in which liberty, freedom and equality are fighting against religious persecution, subjugation of women, and the exploitation of the common muslim by rich Islamic theocrats, oil billionaires and mullahs
5. The battle for gay equality (similar to the already ‘won’ battles for female and black equality) being forcefully fought against by the religious right in the US

Aren’t the fundamental forces behind these battles the same? It certainly feels that way to me. And if they are….doesn’t one have to ‘win’, at least in the legal arena (i.e., international law, national law) for peace to reign?

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rayman mathoda

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