Friday, September 24, 2010

My Own Mortgage Story

It has been a while since I blogged.  I guess, I just got bored and took a break.  A couple of conversations in the recent past brought me back here.

 

I met a friend who works in the banking industry who told me over a dinner conversation that my experience with my house in Michigan is so far removed from what they talk about in their corporate meetings on the housing crisis.  My advice to them is to drive through the neighborhoods in Michigan and talk to a few homeowners.

 

Not that my experience is very atypical, the usual – bought a house in Michigan in 2003, paid a little more than what we should have, but nothing too pricey.  We moved from Michigan in 2009, could not sell the house and therefore rented it out to a family. The tenants are in bankruptcy but pay our rent on time, except for a few hiccups now and then.  We are just hoping that once the 3 year lease is over we can rent it back to them again or find someone reliable.  We have little hope of selling the house at a price that will cover our mortgage dues.

 

Well anyways, the story si that when we put up our house for rent in 2009, we had a deluge of applications.  However, most of the applicants were either bankrupt and/or did not have a regular job or were large famil.ies living on government support.  I finally decided on our current tenants because they were a dual income couple with three children and seemed generally nice and reliable.  They have been pretty good so far, they take care of our house and do not cause any trouble. So whenever they tell me they will be late in paying the rent by a month or two I don’t give them a hard time. I can wait if they promise me that they will pay eventually.

 

To spice up the story, my mortgage is on a 5 year ARM that is going to end in October of next year.  At the current rate, even if the interest rates reset I will be paying  a rate lower than my current rate.  My state in Oct 11 will depend on what the Fed does with the interest rates. 

 

I recently called Chase, the lender to find out if I qualify for any loan modification or refinance assistance.  Here’s the transcript:

 

 

After a lot of punching of digits to get to the right place:

 

Agent: Hi, Whom Am I speaking with?

 

Me: Girish Mallapragada

 

The agent follows up with a lot of security questions and verifies my identity. Then..

 

Agent: How can I help you Sir?

 

Me: I would like to know if I qualify for any refinance assistance.

 

Agent: Let me check….she takes a while, looks up the value of my house..

 

Sir, your house is valued at X..and your mortgage is Y. The loan to mortgage ratio is 130%.  It has to be below 125% for us to move on.

 

Me: I am ready to pay down some of the mortgage principal if I qualify for a refinance.

 

Agent: Let me check.  Sir,…actually even if you pay down we cannot proceed. 

 

Me: Could you please explain to me why I do not qualify?

 

Agent: Your loan is not guaranteed by Fannie or Freddie.

 

Me: I don’t know what that means.  Did I do anything during the loan process that lead to this situation?

 

 (I was pretending to see what she wud say)

 

Agent: No Sir, actually not.  See, Chase packaged loans into bundles of say, 1000 loans and sold it to investors. Some of these were bought by Fannie and Freddie. If your loan was in a package that Fannie and Freddie took from us then you would have been covered.

 

I was actually surprised that an agent would even give me that explanation. Usually, they have no clue what not qualifying means.

 

Me:  So you are telling me that I don’t qualify because of something that you did.

 

Agent: I wouldn’t put it that way Sir.  There is little we can do to help you now refinance, unless you opt for a traditional refinance.

 

Me: And, what do I need for that.

 

Agent:  Your loan value should be less than 85% of your house value.

 

Me:  That’s not going to be the case for another ten years.  Well, I guess that is it then.. thank you for helping me out.

 

Agent: Is there anything I can help you with?

 

Me: No, thanks. Bye bye.

 

Wednesday, March 03, 2010

Pramati leads the way with Qontext

I admire Pramati Technologies not because I worked there a decade ago, but because of its incessant focus on innovation. A decade ago Pramati was a enterprise platform software vendor with a focus on products.  Today, it has transformed itself into a enterprise solution provider without losing its focus on innovation.

Of particular attention is its drive into social media technology.  Qontext, a new offering from the Pramati stable is an enterprise wide social media platform that is offered as a service. With Qontext, Pramati takes the power of social media into the enterprise.

There is ample evidence that implicit knowledge resides in a distributed, disconnected for, in the many silos of organizations. Although traditional knowledge management systems capture such tacit knowledge, they are not good at capturing the interconnectivity in the processes that lead to such knowledge. An enterprise wide social media platform solves this problem by creating a foundation for the various connected conversations in the organization to play out.  Being able to access such knowledge and act on it can be a competitive advantage in a world where there is increasing data deluge.

Way to go, Pramati!

Tuesday, February 23, 2010

Causality and the Toyota Recall

Toyota has been under fire lately with its never ending recall notices.  The President of the company commented today saying,

We pursued growth over the speed at which we were able to develop our people and our organization, and we should sincerely be mindful of that

 I cannot figure out what that means.  I think what they are saying is that the recalls are because of Toyota's speedy growth. However, the real truth is that Toyota failed to stick to its quality standards and messed up.  There is no universal rule which says quality needs to suffer with an increase in size.  Toyota flinched from its legendary focus on engineering and design and probably sought to keep its costs low.  

Further, it is also clear from the memos that came out yesterday that its North American executives were more intent on misleading NHTSA over negotiating recalls rather than focusing on their core values - good engineering and reliability.  I am sure a bunch of lawyers also made money convincing Toyota's leadership that money can be saved by "convincing" NHTSA rather than try and address a design problem.

Toyota's case will probably be unique in automotive history. It stands naked and no longer invincible - not because it could not make quality cars, but because it chose not to.