RV News & A Tangent - (Pagosa Springs, CO)

Gaylord Maxwell

On September 20, Gaylord Maxwell, the founder of Life On Wheels RV Conferences, passed away.  We would be remiss if we did not acknowledge his contributions to  RVing.  His book, "Fulltiming: An Introduction To Full-Time RVing", was one of the first we read in our research of the lifestyle.

We had the pleasure of meeting Gaylord in January 2006 at the Tampa RV Show.  We asked if he would allow us to speak on full-timing at the May 2006 Life On Wheels in Bowling Green, KY in exchange for attending the conference for free.  He and Peggy, his right hand and conference coordinator, reviewed our website and agreed.

After teaching one class in Bowling Green, they allowed us to teach two more classes in Iowa later that summer.  That time we got paid a little bit.  :)  From the comments we got from "students" after all our seminars, we knew we were on to something with this full-timing education thing.  :)

We certainly enjoyed the little time we had with Gaylord.  His love of life, his humor, and his pioneering spirit will be missed by the RVing community.

Check out this brief video from a seminar Gaylord presented at age 77.  Don't wait to follow your dream!

Full-timers On Oprah

In another RV-related story, last week we got an email saying that Oprah was looking for full-time RVers or soon-to-be full-time RVers who are concerned about the economy and whether they can actually afford to follow their dream.  They would appear on a show with financial expert Suze Orman.  By the time I got the email, they had already found a couple.

The show, Recession Reality Check, aired yesterday, September 23.  It wasn't about full-time RVing.  It was about how to live in this current economy.

Now, I'm not really a big Suze Orman fan, but she echoed what I said in my "rant" the other day.  She had absolutely no sympathy for a couple that is now $2,000 short a month after the husband got laid off and they have maxed out 29 credit cards.  They didn't consider selling their home because they figured renting would cost just as much.  Suze blasted them and showed them how it was costing them $3,000 a month to live in their house.

The wife used the word "victims" and Suze did not let her get away with that.  Good for you Suze!  She goes on to implore the audience "People, stop living the financial lies that you've been living!"

Uh oh, here comes the tangent.  I didn't want to address this again, but the media keeps egging me on.

I'm tired of hearing how we have to provide relief for the "innocent" people across the country in foreclosure.  I'll say it again.  We've been a society of personal financial irresponsibility (including ourselves for longer than I like to admit) for a long time, and there have never been any guarantees of life-long jobs or wages to continue to cover our poor choices.  We have to be fiscally responsible and be prepared when things don't go exactly as hoped.   

Currently, there will be actual foreclosure on only about 2 - 3% of American homes.  Okay, it may rise to 5% on the high end.  Will someone please stand up and tell me why the other 95% of the people that are struggling, but making it work, should subsidize those relatively few "innocent victims" ?

Even Lou Dobbs, who amuses me for continually taking our current administration, Congress, both parties, and the presidential candidates to task for their complete lack of leadership, talks about the "innocent people on Main Street" and a bailout for them.  Gotta wake up on that point, Lou.

The media keeps hitting us with stats like "foreclosures are up 75%" over last month or last year.  Sure, they have increased, but looking at the total numbers as a percentage of all mortaged homes, it's not a disaster - it's a wake-up call.

Also, you certainly can't believe all the statistics you hear in the media.  Almost every media source quotes RealtyTrac.com for their foreclosure statistics.  RealtyTrac lists foreclosure filings during a foreclosure process from Notice of Default, to Lis Pendens (notice of foreclosure suit), to Notice of Foreclosure Sale, to actual foreclosure and repossession.  They try not to "double count" homes as they go through each step, but I'm not sure how accurate they can be on that.

For 2007 they showed foreclosure filings of only 1% of American households.  BUT, that stat is not actual foreclosures.  It is supposed to be the total of homes somewhere in the foreclosure process, but it many are in the very early stages and might just be in the "notice of default" stage.  Often, borrowers rectify their defaults or re-negotiate their mortgages before it gets to actual foreclosure.  Contrary to what you hear, mortgage lenders prefer to work out mortgages rather than foreclose.

Foreclosures are expensive and the last thing lenders want is to hold real estate inventory.  They don't want to be in the real estate business.

I'm quite informed on that point as we, in that other life, represented several lenders and loan guarantors like the Federal National Morgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac) and Federal Housing Administration (FHA).

Fannie Mae & Freddie Mac are private companies that were originally established by the federal government before they became private companies.  They are considered Government Sponsored Enterprises (GSEs).  The Federal government does not directly gurantee anything (above the table, wink, wink) to Fannie & Freddie, but they provide "implicit support" which gives them huge advantages over other corporations.  Because of the perception of government backing, they can borrow at lower rates and they can sell securities at higher prices.

Fannie & Freddie are the primary guarantors of mortgages.  They set lending standards and then banks and other lenders use those standards to make loans.  As long as those standards are met, if the loan fails, Fannie Mae and Freddie Mac are obligated to "buy" the loan and the entities that made the loan get their money back and wash their hands of the problem.  Hmmm.  Seems they may have set their standards too low.

FHA and the Veterans Administration (VA) do the same thing for first-time homebuyers and veterans, respectively.  They ARE governmental agencies that guarantee loans, but they do have stricter standards than Fannie & Freddie.  Still, once again, if an FHA or VA loan fails, the lender sells it to the government and washes its hands of it.  The loss on such foreclosures is absorbed in the funding to FHA & VA which of course is provided by us taxpayers.

The FHA program helps people buy houses via low downpayment requirements and that can be good for the economy.  But it can be bad for those enticed into such loans because they have no equity to fall back on in a crisis.  Did you know that FHA will guarantee first-time homebuyer loans up to $729,750 in some areas?  Don't know about you, but I don't want to be on the hook for 97% of that debt after the 3% downpayment required.  (Actually, Mortgage Insurance - MIP - is required on FHA loans until the loan balance reaches 78% of the home purchase price and at least five years of MIP has been paid.  So we aren't on the hook for quite 97%.)

Anyway, my prior company, in addition to closing home purchase real estate loans and refinances, did title work and closings for Fannie, Freddie, & FHA when they were trying to ditch the houses they ended up with through the guarantee process.  We also represented numerous "asset management" companies that worked for lenders that had kept loans that could not be guranteed because the loan couldn't meet the standards of Fannie, Freddie, FHA, or VA.

So, from experience, let me assure you that lenders and these guarantors do not want to be in the real estate business.  They turn these properties as quickly as possible at a loss rather than hold them and maintain them.  Lenders may hold a house as collateral, but they certainly don't want to own it.  So most lenders will attempt to re-negotiate a loan and will give most home owners a little time to get current before the actual foreclosure.  However, they will file foreclosure actions to make sure the borrower knows they are serious.

Back to RealtyTrac.  All that discussion was just to show that their numbers, which are very often quoted by the media to sensationalize, do not tell the whole story.  They don't subtract those work-outs and re-negotiations done prior to actual foreclosure from their stats.  So, my guess is that their stats are always a little overstated.  Plus, keep in mind that they are a website mostly for those interested in buying foreclosed properties, so it benefits them to have high numbers of troubled properties to list.  :)

Another media overstatement.  According to the Mortgage Bankers Association in a press release on September 5, 42 states were below the national average in foreclosure filings for the second quarter of 2008.  Eight states (primarily the large metropolitan areas) are driving the national "foreclosure" numbers with California and Florida by far leading the way.  That's no surprise as many Californians and Floridians borrowed on their artificially inflated equity, and many gambled by borrowing money to buy real estate purchases during high "appreciation" years to make an "easy profit" on later sales.  Oops.

So don't keep telling us we need a bailout on Main Street.  Most of our Main Streets are tending to their business just fine.

Whew.  Sorry for that tangent.  But Suze got me up high-fiving the TV screen when she told it like it is.  :)

On the show, the full-time RVers, Jose & Jill were praised for their financial planning and shown as a couple that did everything right.  Suze & Oprah toured their immaculate motorhome and Oprah even went through their drawers and cabinets.  Suze explained how financially stable people live a life that is uncluttered and organized.

A couple of times on the show, Oprah said "I want your life.  So you just wake up in the morning and decide what you want to do that day?  Now that's freedom."

Congrats Jose & Jill!  You made us full-timers proud.  :)

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Comments

[Phyllis]

Did not see the show but heard talk at work today about it.

I am frustrated. We have done everything right. Paid our bills on time, took out only debt we could easily handle, invested to max in 401(k)'s, bought a house we could afford, gave generously to our church and helped own families when needed and continued to save and save and save.

Okay - now we have our investments (and even continue to invest in a down economy), are of retirement age, want to fulltime. But - can not sell a house that is now worth 2/3 what is was only one year ago. So we continue to work and put our dreams on hold Frustrated and mad - you bet we are.

[Judy]

I think that the housing market was way over inflated several years ago. JMO I didnt see the Oprah show however am a fan of Suze. We still wish we would of kept our home but for now full-time will be our choice until we find our place in Pardise!

Judy

[Susan G]

I no longer watch any "news" media that refuses to present all the facts. That leaves virtually no TV. I check reputable sources online and I double check any details that sound too good to be true.

I made six calls to our representatives today and tomorrow looks like an even busier schedule. There's a lot to question in the goings on on the hill and it's up to us to tell them what we do and do not want.

Thanks Howard for the info from your experience.

[V4Vagabond]

Howard,

Very enlightening! Thanks.

Vee

[Terry Miller]

This morning on the local tv station (Oklahoma City) they reported that the mortgage "bailout", as originally proposed, is on hold because the representatives in the House of Representatives are REALLY hearing from citizens.

Yet another example that some are listening to the people. Chris Dodd and Barney Frank are complaining about the House Republicans. I am proud that citizens are calling and getting involved in our government.

Remember...elections in November. Vote out those that don't listen.

[Judilyn]

If the mortgage non-payers suffer the losses of their homes, why do we not demand that the businessmen who made the bad loans, and the businessmen who re-packaged the bad loans and sold them to FNMA, etc., also lose in these situations.

The bailout talks of limiting compensation for the bigwigs at the companies being bailed out. My question is why they would get any compensation at all.

If a small business fails, the owner loses. Why is the owner(s) of a big business not treated the same way?

The president of WaMu is walking away with $19.1 MILLION for three weeks time in the job. The stockholders and many bondholders will lose their entire investments.

There is definitely something wrong with this picture.

Judie Ashford

[Teresa]

A house is only worth what a person will pay for it. You cannot look at what it was "worth" a year ago. Any house will sell if it is appropriately priced. You have to decide if it's worth it to you to drop the price, eliminate that mortgage payment, and be free to travel to all the beautiful parts of this country in your "home on wheels".