What’s in Your Wallet!

Credit Card I’ve never been a big fan of credit cards. Check that. I’m a big fan of credit cards just not a big fan of credit card companies. I use my credit card quite frequently mainly to track my family’s spending habits. It helps us plan our budget each month. As a side bonus, I get points to use on hotel rooms or airlines tickets. Before I signed up for Opt Out Prescreen, the stream of credit card solicitations I received in the mail was endless. The worst offender year after year was Capital One.

You’ve all seen their commercials - Barbarians, Goths, Vandals, Vikings, et. al. are seen pillaging and ransacking until someone “whips out” their Capitol One credit card. The aforementioned savages are tamed at the sight of the credit card. Far fetched? Sure. Catchy? Definitely! Those commercials never sold me on Capitol One. Moreover, the hassle of signing up for a credit card and having to read the fine print swayed me from getting their “No Hassle” credit card.

Art sometimes imitates life. According to Business Week’s article A big lender’s credit card trap, Capitol One has pillaged and ransacked their clients with fees and penalties.

What’s in your wallet?

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Working with the Enemy

Yahoo is one of the best websites when it comes to consolidating articles. Want news of Lindsay Lohan’s rehab, they’ve got it. Want news on Kobe Bryant desire to be traded, they’ve got it. Want news on , they’ve got it.

Today there was an article entitled: Mortgage Brokers: Friends or Foes?

The article discusses the fiduciary (a person who occupies a position of special trust and confidence) responsibility of mortgage brokers.

According to the article:

Borrowers often see brokers as their allies, searching far and wide for just the right at an attractively low price.

Yet the article discusses the inherent flaw of the mortgage broker:

Often the broker’s incentives run counter to the borrower’s interests. Lenders pay YSP to the broker when the borrower is paying a higher interest rate than the best he or she could qualify for, which makes the loan more profitable for the lender. The higher the , the higher the payment to the broker. (Some lenders put a ceiling on YSP.) Lenders may also pay brokers a bonus for loans with penalties, which make it expensive for borrowers to within the first few years.

To counter this flaw, the article advocates :

To protect yourself, one strategy is to shop for a directly at a few lenders and then see whether a broker can find a better deal. When choosing a broker, borrowers should ask tough questions first. Among them: In searching for loans, do you feel obliged to put my interests ahead of yours? Exactly how much will you earn on this loan? And how many lenders do you check regularly for rates and terms?

Are Brokers the Enemy? The answer is NO.

There are no enemies in the game of life. People will only take advantage of you if you let them. The only true way to protect yourself is through knowledge. Learn as much as you can about getting a mortgage. It’s a pretty simple process but it’s cluttered with confusing terms and complex arithmetic. Where can you learn about getting a ? For $12 you can get Mortgages for Dummies. It’s the book I got when I bought my first place 10 years ago.

Chances are you’ll need a broker if your loan doesn’t meet Fannie Mac or Freddie Mac guidelines. In other words, if you’re loan is somewhat unorthodox, you need a broker.

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JD POWER Awards: Mortgage Companies

Here are some rankings from JD POWER with respect to companies:

Home Mortgage Service Satisfaction Ratings: USAA FEDERAL SAVINGS BANK

Mortgage Servicers are companies that receive your payments. They may or may not have originated the loan.

Primary Mortgage Origination Ratings: SUNTRUST

Mortgage Originators are companies that initially bought the loan from either a mortgage broker or correspondent lender. They may or may not service the loan.

Home Equity Line/Loan Origination Ratings: WACHOVIA

Home Equity Lines are typically the variable rate second mortgages tied to the . Loan origination companies may or may not service the loan.

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Debt and the American Family

Has the meltdown brought an awareness to how people especially the borrower handle money?

The answer is NO. Instead the media and just about anyone who has an opinion has decided to blame the and professionals who put them in mortgages and homes they couldn’t afford.

If you really want to understand how the average American family handles money especially , read this article by the New York Times entitled Couple Learn the High Price of Easy Credit. (Login required)

Rather than summarize the article, here are some of the interesting snippets:

“The Sears one is 32.24 percent,” Ms. Moellering said, reading a credit card statement with a balance of $5,955, including $155 in monthly finance charges. The high interest took her by surprise. “That’s nice,” she said sarcastically.

Their debt escalated when they decided to get married. They paid for rings, a reception, a honeymoon and a new bathroom — about $50,000 in a seven-month stretch. “In such a short period of time, there’s no way to do it other than credit card ,” Mr. Moellering said.

“It’s been almost two weeks since we’ve had time to sit down and go over the bills,” Ms. Moellering said. “You can’t do it every day because we both work full time. I’ve got two kids; they want all our attention; they haven’t seen us all day. We’re trying to cook dinner. We have to do the dishes, fold the laundry. We’re exhausted. And on the weekends the kids want our attention, and we want to spend time with them; we don’t want to spend time going through the bills.”

Is this how your family handles ?

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Links: Getting caught short handed

Here are some interesting links from the around the web:

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Donde esta el Burrito!

burrito.jpg If you live in , there’s a usually a Chipotle restaurant a stone throw away from your house or your office. Known for their burritos, Chipotle has been a landmark operation in the area. Their burritos are huge and they’re filling!

I’m analytical by nature which means I usually follow a trend which is a nice way of saying I order the same thing every frickin time - chicken burrito with black beans, rice, mild salsa, and cheese. Ten years ago, me and the boys from work would make a pilgrimage to burrito land at least once a week. Today, I may get a Chipotle burrito once a month.

I often wondered what exactly was I getting nutrition-wise. It’s not readily available on the Chipotle website but thanks to Chipotle fan, you can calculate the nutritional facts based on the burrito you order.

chipotle_facts.JPG

YIKES! That’s a lot of carbs!

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Way off course

wrong_turn.jpgAt first I wanted this blog to be about , Mortgages, and . A blog is supposed to be a book and each posts are supposed to be chapters or sections in that book. I started off with the greatest of intentions but along the way I diverged and went way off course.

Discussing the housing bubble and bubble simply doesn’t interest me. It seems like every print and online publication including blogs have sensationalized the “doom and gloom” in the world. If it bleeds, it leads. Your world turns into what you read and what you discuss.

Rather than make my blog a doom and gloom world, I decided to just pontificate on life. and mortgages will always be part of my life, after all I will always own a house and will more than likely have to pay a . Right now discussing and mortgages just seems mundane.

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What’s the deal with the Nuggets?

Unless you really just don’t give a rip about basketball in , the Nuggets finished April with a 10-1 record. They won game one of the playoffs and have since lost three straight. If they lose tonight, they’ll be out of the first round for four straight years.

Here are some fairly obvious reasons on what plagues the Nuggets:

  • AI is not answer: I’d rather see Carmelo Anthony shoot a jumper in the 4th quarter than Allen Iverson drive to the basket and miss a layup and then complain to the refs that he was fouled meanwhile the Spurs are racing down at the other end and scoring a quick basket.
  • Inexperience at the point: Steve Blake is a decent backup point guard. He lacks experience in the post season and it shows especially in the 4th quarter.
  • Marcus Camby: I’m a huge Knicks fan. When Camby was with the Knicks, they played for the Championship in 1999 against the Spurs. Tim Duncan abused Camby then and he continues to abuse him now.
  • George Karl:He’s a great coach. However, he’s the Marty Shottenheimer of the NBA. He does well in the regular season but doesn’t do jack in the post season.
  • Long Distance: Where the heck is Voshon Leonard? The Nuggets can’t shoot the 3, yet they jack it up at least 10 times a game. Linas Kleiza and JR Smith need to find their range quick.
  • George Karl: The coach makes the list twice. Every time the camera pans to George Karl he’s chewing on something. What he’s chewing on is anyone’s guess.
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Getting ripped off, not really

There’s only two major cities in the Philippines, Cebu and Manila. I’m more comfortable in Cebu mainly because I lived there for several years. Although it’s been over 25 years since I left and looks nothing like it did when I was a kid (the city has transformed into a sprawling metropolis) it still really feels like home.

We spent equal time (4 days) in Cebu and Manila and found them to be worlds apart:

Cebu is more laid back. The people are more friendly. Not as many good restaurants. The taxi drivers were more honest.

Manila is more hectic. The people weren’t as friendly. Lots of good restaurants. The cab drivers were less honest.

jeepney.jpg In the Philippines the Jeepney is the best way to get around. The people in the Philippines were quite clever. They took the remnants of the Jeeps leftover from World War II and converted them into small busses. However, in 90 degree heat with 90 percent humidity, we opted for AIR-CON (short for air conditioned) taxis.

In Cebu the taxi drivers didn’t even try to rip us off. They simply told us the fare based on what appeared on their meters. In Manila, it was a much different story. A 4 kilometer taxi ride that should’ve cost us 100 pesos (approximately $2) cost us anywhere from 100 pesos to 400 pesos or $2 to $8.

We were getting ripped off but we really weren’t.

The taxi drivers that charged up to 400 pesos spoke English and loved to chat. They gave suggestions on things to do and places to see. They played American music (Bon Jovi is played regularly). Their cars were nicer. They dressed nicer. They also drove with a much more calm demeanor; they didn’t drive crazy. In other words they provided a higher level of service.

The taxi drivers that charged us 100 pesos, didn’t speak a lick of English, drove like they were in a NASCAR race, had cars that were looked like they ready for the junk heap any day, wore flip flops instead of shoes, didn’t know the first thing about personal hygiene, and last but not least didn’t even want a tip.

We preferred the 100 peso taxi. While the service was less than stellar, we kind of liked the adventure.

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My trip by the numbers

My wife and I said our trip to the Philippines was eerily like Planes, Trains, and Automobiles except we used boats instead of trains. Here is our trip by the numbers of travel methods we used:

Number of Taxi Rides: 10
Number of Flights: 7
Number of Airlines: 3
Number of Boat Rides: 3
Number of Van Rides: 1

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