They were so poor that....

...they ended up living in a rolled up newspaper at the bottom of a septic tank. It would be funny if it wasn't true for the 1.5 million Americans who may lose their homes to foreclosure this year.

Pop Quiz: Which of these products do you think makes sense?

(a) The "balloon mortgage," in which the borrower pays only interest for 10 years before a big lump-sum payment is due.

(b) The "liar loan," in which the borrower is asked merely to state his annual income, without presenting any documentation.

(c) The "option ARM" loan, in which the borrower can pay less than the agreed-upon interest and principal payment, simply by adding to the outstanding balance of the loan.

(d) The "piggyback loan," in which a combination of a first and second mortgage eliminates the need for any down payment.

(e) The "teaser loan," which qualifies a borrower for a loan based on an artificially low initial interest rate, even though he or she doesn't have sufficient income to make the monthly payments when the interest rate is reset in two years.

(f) The "stretch loan," in which the borrower has to commit more than 50 percent of gross income to make the monthly payments.

(g) All of the above.

If you answered (g), congratulations! Not only do you qualify for a job as a mortgage banker, but you may also have a future as a Wall Street investment banker and a bank regulator.

One cheeky lender went so far as to advertise what it dubbed its "NINJA" loan -- NINJA standing for "No Income, No Job and No Assets."

In fact, these innovative products are now so commonplace, they have been the driving force in the boom in the housing industry at least since 2005. They help explain why outstanding mortgage debt has increased by $9.5 trillion in the past four years. And they are, unquestionably, a big factor behind the incredible run-up in home prices.

This information is from a Washington Post article by Steven Pearlstein that explains all too well, why 1.5 million Americans may lose their homes to foreclosure and soon will be living in a rolled up newpaper at the bottom of the road. At least they won't have to worry about how they will afford to fix it, if the roof springs a leak.

Subprime Panick Attack

Latest count of major US mortgage lenders that have croaked since late 2006: 50 and counting

AKA: Why I am no longer employed.

Things to do with a card board box

1. Throw it in the garbage
2. Send it to the waste-recyclers
3. Turn it into a solar box cooker
4. Use it as an oven to bake potatoes
5. Turn it into a composter that finally composts itself
6. Feed it to compost worms
7. Make a garden and grow vegetables in it
8. Make an incubator - Hatch eggs in it
9. Make an armchair
10. Live in it

My conversation with Henry this morning after I picked him up from Dad's:

Me: So Henry, did Daddy tell you what happened with my job Thursday? (I thought he'd use the opportunity to diss me for sure)
Hen: No, Mummy. What happened?
Me: I lost it. I got laid off.
Henry: Gasp... What?
Me: Oh Henry, don't worry we are totally fine!
Henry: No we are not! When people lose their jobs, they have to live in a cardboard box.
Me: Seriously, we are fine! I have been with the company for 10 years. I got a great severance package!
Henry: Never mind about that. Will we have a library? A basement? Wireless internet in our box? I'll need it for my laptop!

Me: Hen-Hen, you have been reading Calvin and Hobbes again haven't you?

The best present for a little mogul.

You may have read in a previous post that Henry intends to grow up and become a wealthy real estate tycoon.

He now has everything he needs to make his dreams come true, thanks to the best birthday present ever for a little up-and-coming mogul.

Real-Estate-Tycoon-In-A-Box. (Cute little assistant in the background not included.)
1. Business Cards and Holder
2. Personalized Purchase Contracts
3. For Sale Signs
4. A Coffee Mug - for the Starbucks run
5. A Calculator - to calculate his HUGE commissions
6. A Good Pen
7. A Camera and Film - to take pictures of his Real Estate holdings.
8. A Note Pad - to take notes during meetings with clients
9. A Real Estate License.

This perfect birthday gift was given to Henry by his school mate Jordan and his clever mom Mia.
He was over the moon when he opened it. Before you could say "Entrepreneur" Henry had an office set up, ready for business, complete with a bright smile and new advertising signs. All he needed were clients, which he found in his more-than-willing parents, sister and brother-in-law. He made "WE'RE OPEN" and "NEXT" signs, and one at a time, called his new clients into his office. He interviewed each and wrote down exactly what features they were looking for in their next house, and then calculated the price range.

The next day he insisted we move the furniture in his room
around so that his desk (currently up against the wall) was placed in
such a way that 2 clients could sit across from him at a time. He
framed his license, made a few signs and was open for business.
Look for calendar door hangers in your neighborhood soon.