This time, though, we were smart enough that we left our charity meeting early, so we could get home and check on Nicholas, whom I was mortally certain was having an appendicitis, because sometimes you get in a groove (or in this case, a rut) and you know what’s coming, no matter how unlikely that particular event is.

Note: The other time in my life I felt like that was when I was a senior in high school in the lower deck of the Rome airport.  I heard a crash and a bang from the deck above me, and I turned to my father and said “that’s a terrorist attack”.  And it was.

When we got home, Nick was in a good deal more pain, and Jeanette called the InstaCare to ask a couple of questions.  The answers made her think I was probably right, and took him over.  They spent about ninety seconds with him and said “get over to the emergency room”.  Having had a fairly mixed experience with American Fork, we went instead to Timpanogos, the next hospital south.

And it was appendicitis.  It hadn’t burst yet, but it was in the neighborhood, so they doped him up on morphine and scheduled the surgery.  Another surgery.  We went 20 years without a single one of any kind for any thing, and then we have two of them in three months.

So they did the laparoscopic procedure, and Nick has a couple of cute scars.  It took a week for him to get even part of the way back, but he rallied thereafter and is doing fine now.  I can’t thank his friends enough.  There were a steady stream of them for days, and that meant a great deal to Nick, to know that they cared about him.

Not life-threatening, then.  But expensive.  Oh, this one is REALLY expensive.  We thought the Gabriel thing was bad.  This one makes that one look like a couple of bucks at the local lemonade stand.  We do not have the entire bill yet, and it’s already twice what Gabriel’s was.

Couple that with the loss of about $4000 a month of steady income, and things could be fairly dire.  But ‘cept, as my sisters used to say, Jeanette and I felt strongly last month that even though we had not paid off all the debt from Gabriel’s broken femur, we needed to get some defense in place in case something else happened.  We really couldn’t afford any sort of insurance, and believe me, we looked.  We still adamantly refuse to accept any federal or state assistance.  But there was one other option, brought to our attention by our good friends the Harmons, called Christian Healthcare Ministries.

Tomorrow, or possibly Wednesday, I’ll  discourse a bit on what insurance is and is not, but this group provides what I would call actual insurance, at a reasonable cost.  There are quite a few of these kinds of groups out there, but most of them will not take Mormons.  Really.  They’re born-again, evangelical groups that think Mormons are essentially worshipping a different God, and therefore exclude us from their cost-sharing program.  CHM thinks differently, Heaven bless them.

The way it works, we negotiate as hard as we can – and at this point, we are getting pretty good at it – and that discount becomes part of our “initial contribution” (for most people, that’s a “deductible”, but this isn’t “insurance”, so it’s called something else).  Then CHM pays the rest, up to a maximum per event per person of $250,000.  Nick is expensive, but not that expensive.  We’ve so far negotiated about $20k of cost reductions (it’s a BIG bill, people), which is way over our $5000 “contribution”, so if this works the way it’s supposed to, we’ll pay…nothing.  Really.

Our monthly cost for the program is $185.

Potentially, then, catastrophe averted.  It will still be hard, because that lost income isn’t coming back any time soon, but we lived pretty well on commissions from mortgages before, and we can do it again, I think, no matter what the market is like.  Thank goodness we didn’t close the Lehi office.

So many of you have written or called or posted to Facebook or what have you, and I’m grateful beyond words.  Thank you.  You make it a lot easier to keep my head up.

Further updates as events warrant.

***************

And because we get asked this about three times a day, let me say that Gabriel is doing really well.  He still refuses to use the potty, but in all other respects he’s just as he was before the accident.  He clearly – based on some of his acrobatics recently – has no memory of the event whatsoever.  That’s a great blessing and we are thankful.

For a long while, this blog has been a kind of catch-all repository of whatever I happen to be thinking about.  Now, though, with events having overtaken both in business and in personal life, I’m going to be moving the mortgage part of this blog elsewhere and concentrating mostly on personal and political things here on these pages.

There happens to be a significant personal and political issue that we’re being confronted with, so that seems like appropriate timing.

You might have subscribed to this page for its mortgage-ness, and if that’s true, then you should move on over to the 1st Response blog at City 1st Mortgage Services, where I’ll be posting those things for the most part.  I have been hired as the director of PR and Strategic Partnerships at City 1st Corporate, so that becomes one of my responsibilities.  Occasionally, I’ll write something incendiary that (being corporately inappropriate) will end up here, but in those cases, the posts will be mortgage/political rather than mortgage/origination.  So if you want actual mortgage information, that over there is the place to be.  Increasingly, you can find my writing for mortgage and real-estate professionals at the Scotsman Guide and the Niche Report.

Starting with my next post, I’ll be talking a lot about a personal issue with our son that happens to have given me some thoughts about the US medical system and what is wrong – and right – with it.  That leads to a discussion of what is probably the salient issue of our time, and that is government’s role in providing to us the services we take for granted, whether it be through unions, as in school, fire and police, or simply by constriction, as in the medical industry.  I don’t know if I have solutions.  I do know that I have ideas.

And there will be a lot of stuff about family, specifically about parenting and how to raise kids these days, from the perspective of a father.  There are surely enough mommy blogs out there; not so much are there daddy blogs, so I’ll join the few, the happy few.

My thanks to all of you for your patience with me and your comments and participation here.  I hope you stick around.

1. A real, physical newspaper for Lehi.  I started one, but have not had the time to continue.  It was worth the investment.  I learned a lot.  I believe it matters.

2. A serious attempt at a local literary revival.  I know a good deal about the mechanics of how to get a book written, published, and sold.  I am also a fierce proponent of the power of locality and community, and, although this runs counter to the conventional wisdom, I believe that the physical is still more powerful than the virtual.  I believe that it is not only possible but highly desirable to have a local press for local writers distributing books through local stores.  I can see the entire thing, how it would all work.  I don’t have time (and likely don’t have the skills) to do it.

3. Hard research on the value of coaching rotation in college football.  I have a theory.  It would be an interesting one – and potentially a valuable one – to any university that was thinking of trying to win a national championship.  Don’t have time to do the research to see if my theory is true.

4. A solid PR campaign for the mortgage/ real-estate industry.  We’ve been savaged over the last few years because of the economic downturn supposedly caused by the greed and fraud of people who do what I do.  The record could use some straightening out, and more than that, the value created by people that do what I do should be and must be highlighted.  Those of us that are really good at what we do provide services that save people millions.  I believe it would be a very good thing if more people understood that.

5. TEDx Lehi.  There are huge numbers of techies in this part of the valley, and more coming all the time.  We’re a creative and interesting bunch.  The TED program is one of the most interesting and inspiring ideas I’ve seen in a long while, and I want to be part of putting one on right here in Utah County.  I don’t have time to do it.

6. Writing Training Trap.  My good friend Glen has a terrific idea for a business book.  It needs to be written.  Not only can I not write it, I don’t even have time to badger him so that HE has time to write it.

That’s depressing enough for one day.

I had a friend ask me if I was going to survive the wreckage of the mortgage industry, if I was worried about being out of business.  There are several stock answers I use to that question (“as long as there’s a mortgage industry, I’ll be working in it,” etc.) , but I decided at that moment on a new one: Hell no.  The second I don’t have a job here I have ten more ready to go.  Give me back the 40+ weekly hours I spend on mortgages, and I probably have time to do three or four of those things above.  If City 1st ever gets rid of me, I won’t even have time to move my desk.

Meantime, if you’re looking around for something to do, I have some suggestions.

On May 1, 2009, Fannie Mae and Freddie Mac agreed to abide by the Home Valuation Code of Conduct (HVCC), which regulated how appraisals could be ordered and performed.  Without going into a detailed analysis of the HVCC and how it spawned (that’s here, if you really want it), let’s just say that the results have been fairly negative for the ground troops in the mortgage/real-estate market.  This is hardly surprising, as there has never been a government regulation that I can think of that has made things better, but still.  Annoying.  Worse than annoying.

Appraisers have hated it, because it’s nearly universal that they are being asked to do more work for less money now.  Realtors hate it, because their purchases don’t fly when appraisals come in lower than the sale price.  Mortgage guys hate that, and also hate that low appraisals kill their refinance deals.  Borrowers hate it because their loans cost more and take longer.  So the experiment has not been a resounding success, has it?

The reaction, being as negative as it is, has caused Congress to act, putting a bill together to impose an 18-month moratorium on HVCC.  Unfortunately for the howling pack, this bill was sponsored by two of the most anonymous members of Congress, and has garnered only 19 co-sponsors (remember, there are 435 Congresspeople).  It is not being supported by the Appraisal Institute.  It has small to zero chance of passage.  The Federal Housing Finance Administration (FHFA) says everything is hunky-dory (no, really, see here).  And I have information out of Washington that the FHA is considering imposing its own version of HVCC, which would effectively make HVCC the national appraisal code for all mortgages.  Depressed yet?

Don’t be.  The HVCC may not be going anywhere, but the good news is that the HVCC is not the problem, at least, it isn’t the problem all by itself.  There are two things that are worse than the HVCC, one of which will fix itself, one of which has to be fixed in the HVCC, neither of which requires an act of Congress.

The first problem is that the market stinks.  Look, there is a huge overabundance of housing stock.  If no houses were built and no more went up for sale than what we have now, it would take nearly a year for us to sell all the ones that are on the market now.  Think that depresses prices?  Estimates are that up to HALF of the mortgages in the US are at risk of default.  Foreclosures are breaking records – one out of 84 houses in the US received a foreclosure notice in the first half of 2009.  More are on the way.  That’s causing huge pressure on the market, and not in a good direction.  When house prices fall like this, it blows up a lot of deals.  A good appraisal just tells you where things are, it doesn’t guarantee you’re going to like the feng shui.  This is NOT the fault of the HVCC.  And there’s nothing you can do about it.  But it will, eventually, go away as the market stabilizes.

The second problem, bad appraisals, long lead time, appraisers being shorted money, all these problems are also being blamed on HVCC.  But these are also not the fault of the HVCC, at least not directly.  How do I know this?  I know it because although like everyone else I am subject to HVCC regulation, I don’t have any of these problems.

It’s a miracle!  It’s like winning the lottery!  Nah.  It’s like any other part of this business.  My title companies do remote closes, even closes more than an hour’s drive away, for no extra charge.  Why?  Because they want my business, and that’s what it takes to get it.  Similarly, my appraisal management company (AMC) gets my orders done fast, and well, and pays their appraisers full fees, because that’s what it takes to get my business.  See, with title companies, I have a choice, so I get what I want.  The same is true with my AMC.

But here’s where the HVCC is screwing things up.  To show you how, let’s go back six months.  Were you happy with your appraiser six months ago?  Why is that?  Probably because he was honest, fast, and knowledgeable.  Did he like you?  Very probably.  Why?  Because you didn’t hassle him and he got paid on time.  The two of you were able to come to this amicable arrangement because each of you were free to choose to go somewhere else if you weren’t happy.  It was, in fact, a violation of the law for a lender to dictate the use of a particular appraiser on a transaction.  Choice and competition always lead to efficiency and improved performance.

Fast forward to the present, and what do you have?  Well, it depends.  If you’re a lender, you probably have an AMC that is a subsidiary of your company, and which you have to use.  If you’re a broker, each of your lenders has an AMC that it requires you use.  These AMCs are contractually bound to the lenders they serve, and their bread is buttered by the lender.  They do what the lender wants.  You, as a loan officer, have no choice but to use them.  If they stink – and ladies and gentlemen, the stench is overwhelming much of the time – it doesn’t matter.  They don’t care and they don’t have to, because you have no choice.  You have to use them.

It’s even worse for the appraisers, who get offered a pittance – 40% less than normal – for the same work.  If they don’t take it, they don’t get more work.  They have no choice, either.  What this means is that the good appraisers just quit.  They’re worth more than they’re being offered, and they know it.  To be true to their standards, they refuse the work.  So new and/or desperate appraisers take the jobs, and they take as many as they can, because they have to do more to make the same money.  Besides, the lender benefits directly when an appraisal is low – it reduces their risk.  Voila!  Lower appraisals, lower quality, longer lead times.  Sound familiar?

One group proves that this isn’t how things have to be – correspondent lenders.  Free to use whichever AMC does the best job, correspondents (my brokerage is one) are free to select AMCs that meet the best standards and do the best work.  Magically, most of the HVCC problems evaporate.  I can testify to this first hand.  In fact, I use my AMC even for FHA loans, even though I don’t have to, because they make my life better.

So while I believe that HVCC is here to stay, and I think that all attempts to get it overturned are doomed to failure, there is a change to the status quo I think is not only necessary but relatively simple to get implemented.  What is needed is a return to the situation that existed before the HVCC went into force, when it was black-letter illegal for a lender to require the use of a specific appraiser.  No lender can demand a specific title company, so why a specific AMC?  Is that not an obvious conflict of interest?  ESPECIALLY when the AMC is owned by the lender itself?!?

All it takes is a regulation that no lender can mandate the use of a specific AMC.  Instantly, we have competition and choice.  My AMC, 1st Choice AMS, which plays fair and does mind-blowing customer service, can take on the First Americans of the world and beat them.  You, loan officer, your problems go away (except for the market, sorry, can’t fix everything).  You, appraiser, can get paid to be good again.  The AMC streamlines the process for everyone.  And presto, the HVCC stops being an obstacle to good business.

The small change proposed above can be handled by administrative rule, not congressional action, can be implemented in a weekend, preserves the integrity of the appraisal process and solves the market problems the current system exacerbates.  Instead of this pointless tilting at windmills in Congress, why not get behind a proposal that has a chance to work, and fixes not only our problems but the industry’s as well?

So I didn’t post.

I meant to post on 9/11 on the tragic and still almost unbelievable loss of that day. The year after I participated in the “Rolling Requiem”, an hour-by hour tribute to the dead through the singing of Mozart’s Requiem mass beginning at 8:17am in every time zone. I’ve not forgotten that day; nor, I suspect, have any of you.

But I didn’t post.

I meant to post on Wednesday the 12th, a day where I passed a test that a few years ago I failed. I hadn’t thought I’d come that far. I also learned several very important things that I want to share, but I didn’t have time when I got home at close to midnight.

And here we are on Thursday and hey! I have time!

The markets are fairly settled. There’s the distinct possibility of a Fed rate cut of as much as .5% next week, which would be a very aggressive move. It would ease the pressure on those that need to refinance out of adjustable rate mortgages (Fed moves directly affect ARMs), and that could help ease the fears in the secondary mortgage markets. Frankly, I can’t tease out how the Fed affects the entire world economy, so I tend to pull for those moves that make it easier for me and my clients to get loans done. That usually means rate cuts. Forgive the bias. But I do think that is what the Fed should do.

In an effort to expand our product range and provide more services to our clients we have developed a couple of new programs that are related to, but are not, mortgage loans. One is a huge undertaking that I’ll have a whole post about relatively soon, and the other is potentially the most useful mortgage add-on that I’ve ever seen. More about those later.