Live Richly

From Gunslinger to Monk, Part 2

2011-05-30T06:03:11Z

This is the second part of my controversial interview with Ken Goldberg. He’s gone through many phases in his life. Today, Ken talks about the gun range, being a lawyer, and more struggles with substance abuse. You can also watch the video of his appearance on the Ali G Show (and no, he didn’t know it was a fake interview.)

Ken Goldberg: Once I got my law degree, I started practicing law with the same population, in large part, I’d been social working to.

Jennifer Barry: That makes sense. You understood them and knew they needed a lot of legal help.

KG: I was perfect for it. Juvenile cases, criminal cases, it didn’t matter, I could smell b.s. from a mile away. I could bust my client’s bad story, I could bust a witness’ bad story. I was bright, although I wasn’t successful, and then I met Gerry Spence. He taught me trial law in 1994, and then I became a minor star in my own little world. I learned what was wrong with my technique, and I became monstrously good. But I wasn’t interested. My history is that when I become really good at something, I lose interest.

So I bought the gun range. I became really good at that, sold it. Then I bought a series of bars and proceeded to lose a large amount of money. I also loaned people a lot of money and never got paid back, like one of my former partners at the topless club, who died broke.

JB: So how did you end up buying the gun range? I understand you were bored of being a lawyer, but why a gun range in particular?

KG: Well, my wife, now ex-wife, and I moved to Dallas, and I didn’t have my law license initially. I just sat in the back yard and listened to the fountain while my wife worked. She made plenty of money. I had some money I saved in Chicago as well. We lived in Grapevine in the suburbs in a beautiful house. I thought I would make friends readily in Dallas but I was wrong.

I remember I went to a gun show – we didn’t have any in Illinois – and there was a store from Irving there. I went to buy one gun and left with three. I called my wife and told her I bought a gun store. I was joking of course. She said, “It’d better be a nice one.”

I thought she took that very graciously. So I started looking to buy a gun store.

I ran across the owners of DFW Gun by accident and I bought in. They bought me out later because some bad blood developed between me and one of the cops that owned it. Later the cops were thrown out of the business and the remaining owner and I buddied up. He sold out to me and then I found out he swindled me.

The whole business was dying, we were down to just me and one employee, then I got an opportunity to buy a new building in another location. I invested a bunch of money to build out the range, and we never lost money from the first day we opened.

I turned it around to a thriving business that could have been worth four times as much if I’d been smarter. I didn’t even rent out or use most of the building. There are things I could’ve done, which the next owner did, like putting in a martial arts dojo.

But I wasn’t that smart, and I didn’t have an exit strategy. I thought I would run it forever. It didn’t work out that way.

I sold the gun range for a good dollar amount and started with the radio show. Things really started to go downhill then.

The lifestyle in Dallas was killing me. I would always end up with some stripper at my place at 3 in the morning that I took in because she didn’t have anywhere to go. Then we would end up talking, I would try to help her, do my social work thing. We would end up staying up all night doing meth. A lot of times people would just give me drugs because they wanted me to be their friend.

I did things I’m not proud of on drugs. I once went to court for a federal sentencing hearing after being awake for three days from doing meth. I wasn’t high, just hadn’t slept. I told my partner P. that, said, “I’m worthless, you’ll have to drive.”

I did the hearing, I don’t remember why. My client was sentenced to five years. I totally beat myself up about letting myself get to this state, I thought I did a horrible job.

P. said “I’ve never seen anyone do a better sentencing hearing. They threw everything at her, including the kitchen sink, and you caught everything they threw. You argued everything successfully and she got the minimum sentence possible. You did good.”

This is P., she’s straight as the day is long. She’s never smoked a joint.

I told her I’d broken all the rules I set for myself when I started using drugs again. I promised myself I would never go to court messed up.

A House of Cards, Part 3

2011-05-26T04:52:30Z

When caught in the act, bankers change their stories.

This is a continuation of my interview with Nye Lavalle. Sixteen years ago, he began investigating mortgage fraud when a bank attempted to wrongfully foreclose on a family property. Many of the issues he uncovered more than a decade ago, like robo-signing, are just being recognized today. Lavalle continues to try educate others about problems in the banking industry and the US economy.

Nye Lavalle: That’s why it was funny in Florida when that bank said they lost a note. I would kind of laugh, how do you lose a $2.5 million note? That’s like $2.5 million floating around somewhere.

Jennifer Barry: There is some evidence that the banks aren’t necessarily losing the notes so much as destroying them.

NL: But why would someone destroy a $2.5 million note? The only reason someone would destroy a note would be to cover up endorsements on that note which would have indicated another change of title to whomever really owned that note, so they actually destroyed the evidence.

JB: Right, I think that there’s widespread fraud in banking, so they need to “bury the bodies.”

NL: Exactly, and that’s what happened. Now it could be that they were giving notes to foreign governments, they were lending them out to different people in different places with different deals. But destroying notes, there would be a nefarious motive in destroying a note.

JB: Certainly. I read that you had called out the robo-signing controversy over a decade ago.

NL: Yes, well I called it corporate dummies, I didn’t call it robo-signing. It was my colleagues in West Palm Beach who coined that term. Bank employees, they just went through and back-dated notes or did whatever it took. They would even show up at depositions and say they had no knowledge of anything.

JB: On the internet I’ve seen what you are referring to. You can actually watch the depositions and listen to the outrageous things the robo-signers are saying. I heard a man say he signed as a bank vice-president for 20 banks. He admitted that he never read any of these documents, just signed where he was told. He would also sign as the attorney-in-fact, but he didn’t even know what that meant.

NL: Right, I knew all about this kind of behavior. I remember calling up a guy at Washington Mutual, I believe his name was Eric Spencer, and told him that I knew that people are forging his name on documents. I mean, it doesn’t take a rocket scientist to look at 10 squiggle marks and when you see an X, you see a circle, you see five sticks and a cross, that they don’t match. These are not real signatures. And I called him up and tape recorded it. I said, “I know these are forged,” and he tells me he’s not going to say, and he hung up the phone. He knew.

Now that was back in the ’90s, they’ve been doing it for years. None of this is new, and the situation is that everybody is focusing in on the robo-signing because that’s just so easy.

There are a lot of other serious issues. The banks can’t count – they can’t count to the penny, so they’ve not properly amortized the loans. Through a series of financial manipulations, the principal balances are much higher than they really should be. No one ever audits the numbers, they’re just so happy to get the new car, or the new house, that they just accept the payoff that the bank gives them. Nobody goes and looks if their payments were applied correctly at the right interest or amortization schedule.

So the banks can’t count, but the second point is they also can’t account, in that they can’t account for the all the securitization, they can’t show it going on and off the balance sheets to all these different entities, as well as the change of title that corresponds to the representations. In other words, they really don’t know who owns the note.

Third, when caught with their hand in the cookie jar, they will lie, steal, bet dollars to you and say, “No it’s not a cookie jar, it’s a gummy bear jar.” They’ll just change their tune, and tell you it was never intended to be a cookie jar, and even though it had cookies before, it’s really a gummy bear jar. And that’s pervasive throughout the industry.

JB: That’s definitely interesting to hear you say that. Many of the reports in the media make it sound like the irregularities are some sort of accident, and people were a little sloppy, but you’re definitely saying it was intentional.

NL: In September 2004, Anne Mulcahy, the CEO of Xerox resigned her position on the board of directors of Fannie Mae after getting my report on fraud. And Fannie Mae’s board created a special review committee of my allegations. And that led us to the Rudman report. I’m a footnote in it.

But Fannie Mae hired an independent counsel, the law firm of Baker Hostetler, specifically an attorney named Mark Cymrot, who spent a year investigating my allegations of Fannie Mae’s practices, such as the robo-signing, the lawyers filing false pleadings and affidavits, etc. There was some litigation in Florida, I think it was in the 2004-2005 time frame. I gave them all the information, and they said they were going to change their practices but they didn’t. They kept doing the same frauds the same ways or different variations on the scheme.

I went to the boards and CEOs of major banks like Bear Stearns. I spoke with Jamie Dimon, head of JPMorgan Chase, and before him, William Harrison. I communicated and I flew at my own expense to Chicago and met with lawyers and investigators at JPMorgan, showing how all these scams were going on, and I believe it was a giant Ponzi scheme. They were doing this to cover up and conceal the true ownership and they were placing assets on their books that weren’t theirs, or not putting liabilities on their books that should have been there.

From Gunslinger to Monk

2011-05-31T02:05:10Z

After a short break from the computer, I’m back with another controversial interview. Ken Goldberg has gone through many phases in his life from runaway to lawyer, and yes, Buddhist monk. With all the violence in his life, it’s amazing that he’s still here at age 58. Ken is proof that it’s never too late to reinvent yourself if you really want to.

Jennifer Barry: Thanks for agreeing to the interview. You’ve had an amazing life, starting at a very young age. I know that you spent a lot of time on the streets in Chicago.

Ken Goldberg: I started out in an affluent Jewish family, and I started running away when I was 13 from a physically abusive dad. I tried to poison my father when I was 10. I finally left home on a regular basis at the age of 15. I would come back home when I was too sick to cope with the streets anymore. At 17, I moved out for good.

I hung out mostly in the ghetto in those years because white, middle class families didn’t want a runaway hanging around. But black families said, “Don’t make any trouble or any noise, and you can go to sleep in that room over there.”

I lived in basements, churches, fraternity houses, and with this other black kid who was a runaway from the gangs, and his family. We thrived. He taught me how to burglarize and I taught him how to deal drugs.

I remember I was 17, I had long hair at the time, and I was brought to the Cook County Jail on a drug charge. The cops told me I would be sexually assaulted that night. That was a pretty safe assumption. But my mom bonded me out in time so nothing bad happened.

The same kind of thing happened to me in high school. I went to a pretty rough school, one guy was trying to extort money from me. My friends told me, “When he comes around, you just jump on him.”

I said, “Can’t we come up with a different plan?” He was pretty big, and I was the smallest boy in my school.

All the gang bangers told me, “If we’re there, we’ll help you man, but if the boy comes up on you and you don’t got anybody, that’s what you gotta do.”

So the guy finally corners me in the lunchroom, and 30 black kids who didn’t even know me stood up and told him to f*** off. They all circled him and asked why he was bugging “this little white boy.” So I got bold and told him I wasn’t giving him s***.

The gangs finally told him to leave me alone. They protected me until I was large enough to fight for myself.

That was my life. It was messed up. I was around violence all the time. Then I met a social worker who got me back on the right track. I started trying to act like a normal human being. At 23, I became a social worker myself.

I held it together until age 29 when I became a drug addict.

JB: When you were a social worker, you were working with gangs, right?

KG: Correct. The first few years it was almost exclusively gangs and street kids. Then I went to work in a South Side neighborhood, which was very heavily Irish. I was working with Catholic priests there. At that time there was a serious racial violence problem. My focus became dealing with teenagers trying to kill each other because they were black or white.

It wasn’t so much a gang thing. It was more like white flight. That was the last neighborhood where Chicago police could live before they had to move to the suburbs. Most of them had moved once before away from black neighbors. They had dug in. They were not going to be moved. The parks and schools became a battleground, and the YMCA hired me to try and keep it all civil.

So I did that for a couple years. Then Reagan was elected president and social services were gutted around the country virtually overnight.

Then I went to work for my dad in his lumber business for one year, and I ended up in drug treatment for cocaine.

JB: Was that the first time you went into rehab? You had used drugs before that, right?

KG: Yes, but I had stopped most drugs by age 18. I’d stopped the LSD, stopped the weed. I quit drinking at age 21 because it wasn’t fun to sneak into bars anymore. I was the kind of kid that would buy a quarter bag of cocaine, the dealer would say, “Don’t even tell anyone I’m selling you that small a bag. I don’t need anyone else hassling me for that.”

I would have some a couple of days later when the dope man would call me and ask if he could borrow some.

While I was still in social services, I broke up with a woman I was really in love with. I’d heard that time heals all wounds, and since living was so painful, I figured I would stay stoned until the pain had passed. No one told me this was b.s. Then I started using cocaine, and that didn’t work, so I ended up in treatment.

When I cleaned up, I went to college. I was a high school dropout. I eventually got my GED, but I was a social worker without any college. I went to a special program called University Without Walls. I got a degree without going to classes.

I was working on my social work degree, I was also working at a hospital in a detox unit, when my family offered to pay for a law degree. I took them up on it, even though I had rejected them in large measure up until then.

Part 2 of this interview is now posted here!

5 Language Learning Excuses and How to Get Past Them

2011-05-05T19:11:16Z

Learn a foreign language on your commute.

When people learn I’ve been studying Spanish for four years, so many tell me they wish they could do the same. When I ask them why they don’t learn the language of their choice, I get one (or more) of the following excuses. Today I will help you by blowing up all these excuses so you can cross this off your bucket list.

1. I don’t have the money for classes - If you are trying to learn a rare language that isn’t spoken near you, it’s true, you may be out of luck. Immersion in a program or a visit foreign country may be best, but it’s not cheap.

But for most of us, we are trying to learn a tongue that’s spoken by millions around the world. For a major language like German or Mandarin Chinese, check your local library for CDs, dictionaries, and even children’s books. Radio Lingua has free podcasts in over 20 languages. My favorite resource, iTunesU, has free online classes in everything from Armenian to Urdu.

Are you a TV watcher? If you want to learn a language popular in your area, there are probably whole cable channels dedicated to that language that you are already paying for. Skip the reality show tonight and watch something educational instead.

2. I don’t have the time - I have a friend with two small children and a full time job, who is also in school part time. If your schedule is similar, well, I guess you may be too busy.

For the rest of you, language learning doesn’t take 20 hours a week unless you want it to. I only average 3-4 hours of practice a week, and I’m nearly fluent now.

Do you have a long commute? Listen to podcasts or music on the road!

Standing in a long line? Instead of calling a friend, use a free app to practice vocabulary (thanks to Benny for this one).

Do you have a ton of house chores? Put on your mp3 player of choice and listen to a free class you’ve downloaded while you work.

3. I’m too old - This myth is really common among Americans. The theory is that there is a “critical period” for learning other languages, and if you miss it, you’re out of luck.

While it’s easier to learn many things when you are a child, I don’t see people saying they are too old at 20 to learn how to surf, or too old at 30 to learn how to play piano. The fear is unique to language acquisition. The reality is that adults pick up another language faster than little kids in the early stages, because of their motivation, knowledge of grammar and their superior vocabulary, which can help them learn words that are similar in their native tongue.

This idea is fortunately far from universal. I met a bunch of Europeans last month at Singularity University who speak 2 or 3 languages, and are picking up another in their forties because of business opportunities.

4. I’m bad at languages – Many people believe this, but I don’t think it’s true for the majority. After all, you mastered English which is quite complicated.

It’s more likely that you gave up quickly, or you had a bad teacher. Otherwise, we would have to believe that millions of Europeans who speak multiple languages are all super-geniuses.

Perhaps your expectations were too high as well. In learning Spanish, I found that I hit comprehension plateaus regularly, and had to figure out new strategies to get to the next level. On the other hand, sometimes things would just click effortlessly and I would suddenly be a lot more fluent.

I’ll end this section with an inspiring story. I had a job in a sheltered workshop supervising adults with learning disabilities. I had a client from the Azores who spoke barely any English. Even worse, our Portugese interpreter couldn’t understand much of her dialect so he couldn’t help her much. Despite these obstacles, G. learned English through brute force immersion, and after two years, she was able to follow conversations and make simple jokes. I know you could do just as well with much less effort.

5. People will laugh at my sad attempts to speak their language - I used to worry about this a lot. That’s why I was reading novels in French in college but was embarrassed to say anything in French.

The truth is that most people will be patient and impressed that you made the attempt. After all, you are patient with foreigners yourself, right?

As a child, you are used to not knowing everything and you expect it. As an adult, the feeling of being a novice can be uncomfortable and bruise your ego.

All I can say is the more you try, the less awkward you will feel and the better you will get at speaking. I make mistakes in English all the time and I’ve been speaking it since I could walk, so don’t beat yourself up so much.

Do you want to learn another language? What is getting in your way?

Jack and Jill Around the World

2011-04-30T23:00:40Z

Here’s my third interview with a travel blogger (check out Phil and Shannon if you haven’t yet), but this time you get a two for one! Jack and Jill just started on their global adventure, but they are already having fun. Fortunately, they are travel veterans so they have a realistic though optimistic view. I want to thank them so much for giving me time while they’re on the road!

1. To Jill: Tell us a little about your background. Why did you leave Indonesia?

I was born and grew up in Indonesia until I was 16. Then we had that big riot in Jakarta where they were targeting the Chinese minority? Well, my parents had always wanted to send me abroad for college, but decided to do it a couple of years early because of the riot. But instead of sending me to cool, multicultural cities such as Melbourne or Sydney, they sent me to podunk Adelaide instead (no offense, I ended up really liking Adelaide).

But I guess it turned out for the better. There was only one other Indonesian in the whole school and it forced me to pick up English much faster than I would have if I had gone to one of the bigger cities.

After I graduated high school in Aussie, I studied art in Seattle and graduated. Then I realized I missed science and decided to go study engineering in California. Which is a very nice segue to your next question.

2. How did you and Jack meet? Was it in Australia?

No. We actually met in college in California. We were both studying engineering and taking the same classes. He was enamored with my mad multicalculus skill (or I guess more with my willingness to let him copy my homework) and we were good friends for 2 years. Then he shaved his facial hair and we started dating soon afterward.

3. Why did you decide to travel around the world? Whose idea was it first?

Why? It’s a tough question to ask. I’ve always, always wanted to see the world for as long as I remember and I guess I must have infected Jack with the travel bug. So in short, we decided to travel around the world because we wanted to.

4. What did you and Jack do before long term travel?

We did web stuff. I did web design and development, while Jack mostly did the back end stuff. Even though we weren’t working for the same company, we worked in the same building on the same project. So, quite literally we were spending 24/7 together – a great exercise for this long-term travel we’re currently on right now.

5. How did family and friends react to your RTW plans?

All of our friends have been supportive. They weren’t too surprised actually. Our families reacted in a different way. Mine have always wanted me to start my own business so they were hoping something other than tons of pics, wonderful memories, sunburned skin, and depleted savings account would come out of this endeavor. They were only lamenting the fact that we didn’t choose to have any kids first before taking off.

Jack’s parents had concerns about safety and job security – the usual thing that any parents would be concerned about.

But in all honesty, it wasn’t too bad. We’re hoping that we might be able to see them on the road sometime and we just might.

6. Why Colombia first?

We liked Colombia because it doesn’t require visa for both of us. And there is something orderly we also like about exploring the continent from top to bottom. It’s the engineers in us.

7. Do you know where you’ll go next? How do you choose the next place?

We have a general idea of where we’re going on the continent scale… and within the continent itself to a certain degree. For example, we know that we want to go from North to South in South America (going back to the whole orderly thing).

On the smaller scale, we do research on the road and count on suggestions and tips from fellow travelers. For example, at the time I’m writing this, we are trying to make our way from Cartagena to San Gil. We’re altering our original plan based on one of our readers suggestion. Our itinerary now will include a cable car trip across this amazing canyon that we’ve never even heard of before, Chicamocha Canyon. How cool is that?

8. You guys seem to have a great sense of humor. Is that important for coping with problems while traveling?

Absolutely. The thing is for us, finding humor in travel misfortunes is next to impossible when we’re tired and hungry. So we always try to make sure that we get a good night sleep (and if we don’t, we try really hard to make sure we will for the next night), and always have a snack handy. A good night sleep and a full stomach does wonderful things to your psyche.

9. What is the most dangerous place you’ve visited? The most relaxing?

Hmm, I don’t think we’ve ever visited a dangerous place or even felt like we were in dangerous situations. Let’s keep it that way

The most relaxing place – I’d have to say Ubud, Bali. We stayed in a nice hotel with my family, rented a motorbike, and just drove all around the place. And we got a massage from a place next door to our hotel every day. Jack even got one of those 2 on 1 massages. Love it.

10. How will you pay for your trip? Savings? Blog income? Work? Trust fund?

Mostly savings. We were doing side freelancing job doing web stuff before and once we get our travel routine down, we’d like to see if it’s something we can do while we’re on the road. That’s why we brought both of our laptops with us. Hopefully something more than blog posts will come out of this 8 lb brick we’re lugging around

Bio: Jack and Jill left their job and comfortable life in California to travel the world. They chronicle their adventures, and sometimes misadventures, at their site, Jack and Jill Travel The World.

A House of Cards, Part 2

2011-05-26T21:08:57Z

Before the web, Lavalle had to fly to courthouses for research.

Jennifer Barry: It’s very disturbing, because this unit of Bear Stearns was pushing you around and you could actually fight back. Did you say they spent $2.5 million fighting your family?

Nye Lavalle: Over $2.5 million, and the month before trial our law firm withdrew and we got a default judgment against us. It turned out our law firm was representing Bear Stearns and hadn’t informed us of the relationship and banking interests. And we had paid them $75,000 and then capped their fees, and they racked up a $750,000 bill themselves.

JB: Wow. So why do you think that Bear Stearns spent that much money fighting over a property not worth nearly that much?

NL: I was the first to unravel what you’re seeing now. The emperor had no clothes. They didn’t own the note, they churned these properties, they double-pledged their notes sometimes. They had no right to the note, they had no right to foreclose, and they were cooking the books, all those things.

JB: So you are saying that by making certain demands, you were uncovering fraud, and they needed to keep the fraud undercover, and $2.5 million was a very small price?

NL: It was a pittance for them to attack us with lawyers in comparison to what I discovered. Because what I discovered was connected to Fannie Mae. This was before the internet, so I had to travel all around the country looking for court files and making copies. There was no real internet at that time, or high speed internet way back then where we could post all these things. And I literally had to go and review court files all around the country and write to the courts and other things I did. The point is I found out it’s the whole industry, it wasn’t just Bear Stearns and EMC.

JB: You found out that that your case was the tip of the iceberg in what was going on.

NL: Right, exactly. And it all came down to securitization.

JB: I agree that securitization is a big part of the problem. Can you talk about what you see is the problem with derivatives, such as mortgage-backed securities and why the average homeowner should be concerned about that? How does it affect them?

NL: There are many problems. Everybody should be concerned, I mean, whether they’re a homeowner or not, as a tax payer it affects everything that we do. It affects our financial stability as a nation and our national security. It affects our property values, it affects the neighborhoods we live in, it affects the condominiums you might live in, and foreclosures, and people being able to pay Home Owner’s Association dues. It affects members of country clubs, where people walk away, while some of the other members have to pick up the $100,000 dues for the ex-members. It affects your life in more ways than you know. It affects title on property. It affects the cash flow that the nation needs to do its business, and pay for the services that we all need.

To me, the most important thing that nobody has really covered is how much of this junk was sold to our respective mutual, trusts, insurance, and pension funds, the institutional investors. And so our retirement, besides Social Security being there when we retire, will our trust funds and will our mutual funds and annuities and other savings, the 401Ks be there when we retire? It’s all of us are really the ultimate investors.

JB: That’s a big concern. I have a retired relative with a pension from GM. He worked there a long time, and I’m concerned because I don’t know how long that pension is going to be around. Who knows what they invested in or didn’t, or how well they’re managing it? Most of these pension funds are under-funded to start with.

NL: Right, and they’re guaranteed by the government, the government fills the stop gap. So if you look at the total debt that the US has, which is in the trillions, that’s one thing, but when you look at the total obligations that the US has guaranteed between pensions or banking, Fannie Mae, Freddie Mac, you see where I’m going, so it’s a staggering number.

JB: I think Laurence Kotlikoff is putting it at $202 trillion right now. He wrote a book with Scott Burns from the Dallas Morning News about six years ago called The Coming Generational Storm: What You Need to Know about America’s Economic Future talking about how the US is broke.

NL: I was going to say it was over a hundred trillion, but I wouldn’t be surprised at that number. He’s great, I like his work. Without independently auditing his numbers I couldn’t confirm it, but I would definitely say that’s in the ball park. But that’s a number that nobody talks about very much.

JB: I agree, usually the news reports a much lower figure.

As far as those derivatives are concerned, I suspect that the mortgages have been sold many many times over. That’s another big problem.

NL: That’s absolutely true. I can tell you that that’s conclusively proven. I’ve had evidence of it, I’ve seen it happen, and I’ve been talking about that. It’s the trillion dollar scam – they pledged and hypothecated the mortgages to multiple parties in addition to the trust. They never got to the trust that was supposed to hold the securitized mortgages. We have evidence of this. Here’s the real kicker though, the Federal Reserve and Federal Home Loan Banks actually have some of these mortgages because they were pledged to them in exchange for loans to the various banking institutions.

JB: Are you referring to the mortgage-backed securities, or the mortgages themselves?

NL: Not the securities, I’m talking about the mortgages themselves. A lot of times the banks need to borrow money for operations or whatever, and so they have to give collateral as well. That’s why a lot of the notes endorsed are blank, they actually transferred the collateral files to the Fed, and the Fed actually holds the actual mortgage notes.

JB: So the paperwork is not signed so that they can easily swap it around, is that what you’re referring to?

NL: Yes, the notes typically are endorsed in blank so that it becomes bearer paper. The the policy of Fannie Mae, Freddie Mae, even Ginnie Mae and most banks is that promissory notes are endorsed in blank, that’s typical policy, so imagine trillions of dollars of negotiable paper just floating around out there. That’s why it was funny in Florida when they said they lost a note, I would kind of laugh, how do you lose a two and a half million dollar note? That’s like $2.5 million floating around somewhere.

Live Richly Round-Up 12

2011-04-23T00:15:17Z

Here is the twelfth installment of my series which spotlights content I’ve been enjoying recently. These links are listed in no particular order. I hope they help you to live a little more richly!

Bret alerts us to the fact that many people have less money to spend, and this situation could continue for a while. Whether this applies to you or not, it’s wise to build up a savings account. If your bank balance is small or non-existent, Little House has some tips to help.

Maybe you could save money if you had another job. Phil shares his experience earning money through freelance writing.

A great way to save money and eat well is through gardening. Andrew explains his plans to grow tasty veggies. Then once you have home grown tomatoes, why not make a pasta sauce? Kathy shows you how to make pasta by hand to eat with your fresh produce.

A unique way to save money is by living in a cheaper country like Thailand, as Shannon shows us.

However, there are many motivations for visiting foreign lands. Maybe you wish to volunteer, as Wandering Earl did at Mother Teresa’s Home For The Dying. Or maybe you want to better understand another culture as Erica did in Hiroshima. You may simply want to experience breathtaking views like Jack and Jill did in Indonesia.

Do you have problems saying “No?” Maybe you like being super busy, but this may be a sign that you are avoiding your feelings or your self-esteem is based in accomplishing tasks, as Sandra points out.

Even though it may be hard to face disapproval, as Irving reminds us, you have to live your life in the way that makes sense for you. You have to set your priorities and say no to those tasks that don’t forward your goals, as Kevin explains in his post on the power of saying “No.”

Maybe you want to make a big change in your life and start your own business. Angela advises you to check in with your intuition rather than always letting your fears stop you. On the other hand, your strongest values may be holding you back, as you may desire security over everything else. Maybe you have been hurt before, and your lack of trust is getting in the way of your success, as Bryan points out.

Many of you know I’ve been studying Spanish for four years. I have many people tell me they wish they could learn a foreign language, but they think it’s too late for them. Benny argues that you are not too old, and adults can be better learners than kids.

I think many people are afraid to speak another language even when they know many words because they don’t want to make a mistake. If perfectionism is a major stumbling block, Evelyn has some tips for you.

I’m glad Adam’s green card odyssey seems almost over. If you want to know what’s wrong with the US immigration policy, just read about his 2 year struggle with the bureaucracy.

To end, I want to give a shout out to Len Penzo who’s been struggling with web problems lately. On the bright side, the extra work has helped him cut back on his crippling addiction to iTunes.

Just In Case

2011-04-15T21:47:33Z

Are you worried about natural disasters, crime or terrorism? Neil Strauss was. He tried to prepare for everything, but ended up finding himself.

Emergency: This Book Will Save Your Life is an informative, funny, and sometimes disturbing memoir. It details the transformation of the author, Neil Strauss, a music critic and writer who admittedly has few practical skills at the beginning of the book. Strauss’ family lived in a high rise apartment building, so he never learned about nature or how to fix things. By the end of the book, he’s able to care for both himself and loved ones in areas ranging from wilderness survival to hand to hand combat.

The book immediately draws you in with Strauss’ moral dilemma of whether to slaughter a goat in his quest for survival skills. Emergency then bounces back and forth in time, from location to location, and from factual narrative to analysis. This stylistic choice holds the reader’s attention, but is confusing at times.

Strauss first became concerned about domestic terrorism and civil unrest during 1999, exacerbated by the hype around Y2K. When the apocalyptic predictions failed to come true, he relaxed. Although he was aware of it, he didn’t worry about the hatred directed toward America from other nations.

Strauss states that he was quite sheltered and privileged until the 9/11 tragedy occurred. Like many others, he never imagined that the US could be attacked. Suddenly, he was afraid of dying while doing everyday activities like opening letters. Some of his precautions, like buying a gas mask, he later realized only gave him the illusion of safety.

Strauss later falls in with some 9/11 conspiracy theorists. Although he never believes that the US government was behind the plot, he learns about offshoring assets from this group. Strauss discovers that foreign bank accounts are practically impossible for US citizens to get, so he would need a second passport to accomplish this task. Even if he did get a bank account, there is no financial privacy as the IRS requires US citizens to disclose if they hold over $10,000 in foreign bank accounts.

The author then stumbles into a group of billionaires led by a man named Spencer. They encourage him to read about the fall of empires, and realize that a similar fate will eventually happen to the US. They convince him that he needs multiple contingency plans, including a second citizenship, as well as with residences and revenue in multiple jurisdictions. He is motivated to get a second passport due to his distaste for Bush Administration policies like detaining “enemy combatants,” and he worries about losing freedoms.

Unfortunately, Strauss doesn’t have the bankroll for the plans he makes, such as purchasing real estate and citizenship in St. Kitts. He takes out a home equity loan and goes deep into debt, later realizing that his wealth and future is at the mercy of foreigners he just met.

In addition, his new place in St. Kitts is on an island vulnerable to drought, food shortages and hurricanes. If riots happen, he worries that he will be unable to protect his property and himself.

Strauss decides that he needs to buy guns and learn to use them effectively. He chooses Gunsite Academy in Arizona for his instruction, then buys a weapon and takes a course there. Not surprisingly, Strauss lacks appropriate clothes for shooting in the desert.

He’s taught how to shoot attackers while avoiding innocents, and that the police have no duty to protect you. After the training, he realized that he was a hypocrite for backing the First Amendment but not the Second.

Throughout the book, the author’s pattern is to research the best teachers and engage them directly. He doesn’t really care if they are expensive or located in an inconvenient place. With his background as a music critic and journalist, he’s not intimidated to call the top experts on terrorism, knives, or motorcycles.

Strauss finds out about the military training called SERE – Survival, Evasion, Resistance, and Escape. However, he determines that this program is not extreme enough for him, so he attends Tom Brown’s Tracking School. Brown is known for teaching instructors in the Marines how to survive anywhere with nothing.

As usual, Strauss is totally unprepared for the experience. He ends up wet and miserable despite his high tech camping gear, texting his girlfriend with complaints. Once his Blackberry stops working, he realizes that his bad attitude was making his physical and mental discomfort much worse. He starts paying attention to instruction, covering topics such as making a shelter, finding water, and reading the footprints of animals.

Once Strauss returns home from Brown’s school, he decides to fill in the skill gaps he’s discovered, as well as master the new ones. Despite his location in an urban area, he practices making a fire from scratch, primitive cooking, producing water from a solar still, and raising a female goat.

Strauss also notes impacts to his personality from his training regime, like feeling more masculine and “centered,” with a decreased need to impress others. Strauss had spent his life avoiding walks, dirt and physical labor, but he realized this is what his body was meant to do.

The author then plans to test his level of preparedness with various drills. Strauss instructs his assistant to alert him to a “3 day shutdown” of LA at a random time, to see if he is ready to survive without modern conveniences. On another occasion, he finds he could live three days in the wilderness with just a knife if necessary. The author also sets up caches on a nearby island should he need to flee LA due to violence.

Nevertheless, Strauss keeps discovering holes in his plans. Even with caches prepared ahead of time, he knows he won’t last long without a well stocked retreat. Desperation and hunger can make anyone violent. Living rough is fun for a few days, as long as the inconvenience has a planned end.

At a certain point in Strauss’ quest to build survival skills, he moves from his initial impulse to flee, to a more nuanced position. In order to get emergency training and develop a more positive relationship with local police, Strauss signs up for the Community Emergency Response Team (CERT) in his area. As you can’t expect rescue for 3-4 days during a disaster, CERT training teaches you how to save your life as well as those of your neighbors. He learns many tips such as obtaining drinking water from heaters, and moving heavy rubble with pieces of wood, as well as how to cope with a chemical attack.

The author becomes aware that his life had been free of severe stress to date, and he worries that he would crack under the pressure of a real disaster. Strauss decides to take EMT training to learn how to help others in medical emergencies, but he was never under much stress during his ambulance shifts. Strauss then joins the search and rescue team, and is accepted to the California Emergency Mobile Patrol.

All of a sudden, he feels like he belongs to a team. Rather than choosing anonymity and privacy, he applies for several licenses such as his concealed weapons permit, which puts his fingerprints on file with the government, and an EMT license. This later allows him to save lives when assisting survivors after a train accident.

Now Strauss’ first instinct is to run towards danger rather than away. Although he wants to live as long as possible, his huge skill set makes him feel less afraid of the uncertain future. When he finally receives his long-awaited passport from St. Kitts, Strauss chooses to be useful to his new community instead of just hiding out there.

Emergency: This Book Will Save Your Life is definitely worth a read for its entertaining combination of autobiography and self-help book. Although the title implies it is a practical manual, it’s really the story of a man achieving personal growth through learning survival skills. The author transforms from a naive music critic with few practical skills, to a much wiser man who can cope with nearly any crisis. It will appeal to people who are interested in survival skills and self-responsibility, and to those who enjoy an engrossing book as well.

A House of Cards: An interview with Nye Lavalle

2011-05-26T21:10:55Z

Defaults and foreclosures are profitable for banks.

Nye Lavalle is best known for his sports predictions. With his family, he founded Sports Marketing Group and stunned many sportswriters with his accurate calls on the popularity of figure skating and NASCAR in the 1990s, among many others. Sixteen years ago, he began investigating mortgage fraud when a bank attempted to wrongfully foreclose on a family property. Many of the issues he uncovered more than a decade ago, like robo-signing, are just being recognized today. He continues to try educate others about problems in the banking industry and the US economy. This is Part 1 of our explosive interview.

Jennifer Barry: Could you tell me a little bit about how you got interested in the whole mortgage fraud and predatory lending and things like that?

Nye Lavalle: Sure. Just to give you an idea, my email, mortgagefrauds@aol.com, has been in existence, since I believe, about 1995.

JB: That’s a very long time.

NL: It all started the night my mom and dad Anthony and Matilde Pew owned a home in Dallas, TX, that we used for our family business called Sports Marketing Group. And I had a place in New York and LA, and we were eventually going to retire to that home at first blush. But we purchased the home, and my family had money, and I had money, we were a business, and basically, soon after we closed on the loan, the bank SOA just started doing all sorts of stupid things. Nobody resided full-time in the home, and they were instructed to send the payment statements to Michigan so that they could get paid on time, and they never sent them there. They sent them to the property address and somebody wasn’t on the property for sometimes two to three months. And they wouldn’t change that. They wouldn’t take off the late fees, then when I would pay bills on time at the bank, it turned out that they would send the payments from the bank to California to the posting center, and they wouldn’t get posted for 10 more days, even though you paid it on time at the bank. And then they would put another late fee onto the account.

Then, when we had insurance and we paid on a quarterly basis, they would send cancellation notices 30 days ahead. The bank would force place another insurance policy on the property even though we had our own insurance on it. And the long and short of it’s all in a report I created called “Predatory Grizzly ‘Bear’ Attacks Innocent, Elderly, Poor, Minorities, Disabled & Disadvantaged!” They were just churning the account, just trying to make fees and money all over the place.

What we learned years later in litigation is that our account was red-flagged for fraud. The loan officer who approved the loan and did all the documentations had taken blank applications that my folks signed, and put as monthly income from my family, $100,000 a month, when that was their annual trust income.

So they were trying to do what we call manufacture a default. A lot of servicers do that because they want to foreclose on the house. They want to get rid of the liability because that mortgage has been tainted or it becomes instead of A paper, B, C, or D paper. It’s called a scratch and dent mortgage. It’s kind of like a refrigerator, it gets that name kind of like from a refrigerator or stove at the store that someway gets dented and damaged during transit, and it’s not as valuable as the perfect condition new appliance.

JB: Right.

NL: So after that we went to pay off the note. We go look, this is crazy, we don’t want to do business with you, we just want to pay you off. They wouldn’t meet with us. We asked for servicing records. They sent us records that made no sense. We offered to pay them out in cash in 14 days on two conditions: that they could come up with records of what we actually owed them, it was about a $100,000 note, and that they could provide us the original note, stamped, cancelled and paid in full. I knew how banking worked because I had represented some banks. Well the servicing records they gave us, the year end balances were like $5,000 off, I mean literally. And they showed and proved our point that when we had insurance on the property, not only did they put one forced place policy on top of our insurance that we had, but they put two more on top of the one that they had, so they actually had three policies on top of each other.

JB: Incredible.

NL: And that was just a mess. And it was really, they were cooking the books is what I learned. And when I got all the information and gave it to them and said look, we want to get rid of you, they assigned it to a company called EMC Mortgage, which was a unit of Bear Stearns. EMC initiated foreclosure, and we initiated a defense to that, and over the years they spent $2.5 million and 7 years in litigation on a $100,000 loan.

JB: Well, that seems crazy. I do have a quick question for you. Just to clarify, you said they were putting multiple insurance policies, are you talking about derivatives or just regular insurance policies?

NL: No, it’s not a form of a derivative. It was just a scam, it was called churning force placed insurance. And those things have been sued upon and there have been class action lawsuits and settlements, but that’s gone on for years and there are different variations of a scam. If you read my “Predatory Grizzly Bear” report it details all the predatory servicing schemes. I was the first one to coin that term in that report, I mean I coined it back in the late ’90s but the report was written between 1996 and 1999. It really was a lot of work to figure where all this money was going.

So that being said, what we learned in that process is that the bank cooked their books and they did it on the notes that they owned. I realized that if a family who is wealthy, who had money, could be treated this way, then God bless everyone else. What did that mean for our financial system?

This is the end of Part 1. Stay tuned next week for the next part of this shocking interview.

A Brand New Role, Part 2

2011-03-31T02:50:51Z

Shannon above Mostar, Bosnia and Herzegovina

This is the second part of my interview with Shannon O’Donnell, travel blogger. To read the first part, click here.

Jennifer Barry: So what are the differences between Chiang Mai and the south of Thailand?

Shannon O’Donnell: Chiang Mai is much quieter than Bangkok, even though Chiang Mai is the second biggest city. It’s much smaller. Everything is motorbike-able within about 20 minutes here. But the north has a somewhat different culture, with different food than you see in the south. The islands in the south have so much Western influence in them.

JB: Really?

SO: Oh yeah. I went to the Thai islands on my visa run last month and it was so expensive and so Western.

JB: Wow. That’s kind of sad.

SO: Yeah. The north up here, you’re surrounded by the mountains, and if you want to you can be in nature in about 20 minutes.

JB: That’s neat. I know you write about being a vegetarian on the road, is that hard, or does it depend where you are whether it’s hard or not?

SO: It depends on where I am. I landed in Bosnia and had the hardest time I’ve ever had, because the level of English spoken there is so low. So many times I would try to communicate that I’m a vegetarian and I would end up ordering something with meat and eat the side dish. And then whenever I was walking by the grocery store I buy an apple. It was sad.

But conversely, India was amazing. Here, I find I have to be a little bit more of a lax vegetarian where fish sauce is going to be in everything.

JB: I was wondering about that.

SO: I pretend like it doesn’t exist.

JB: If you told them “no fish sauce” it probably does not compute.

SO: No. They have a word for it, “jai,” because the monks go vegan for a couple months out of the year, but outside of those couple of months, none of the restaurants carry the materials to make the food like that. If you’re a vegan and you’re traveling through while the monks are in their very strict food period, you’re perfect. Otherwise, suffice to say you’re going to have fish sauce in some of your food. It’s just going to happen.

JB: Right. So I was reading your blog and you talk about sustainable travel. What is that?

SO: Sustainable travel would be keeping in mind the things that you can do to lessen your impact. So that would mean not taking little tiny puddle jumper flights but maybe going over land on a bus because air travel creates so much pollution.

And I carry a steriPEN with me which has worked wonders. If you have a steriPEN, you don’t have to carry as many plastic water bottles, which they don’t have a system to dispose of the water bottles. They just throw them into these massive landfills or on the streets. Two years ago, my cousin and I tested it in India, and we didn’t get ill. So that’s about the biggest test of it you can do.

Another thing, there are places in every city, in every country, where NGOs have set up businesses which you can give your money to. For example, there’s a cafe in Chiang Mai, and they have a massage parlor where they give the women who are former prisoners 150 hours of massage training. And the ones who don’t do that run the cafe. And you can go there and you employ them because in Thailand they have no ability to go back out into the community, they’re not accepted so readily. So if you don’t have time to volunteer, you can give back just by going to that cafe, by supporting these women who went to jail for minor crimes.

JB: Those are good ideas for people who want to give back when they travel. I know one organization you’re involved in is Passports with Purpose. What is that about?

SO: Passports with Purpose was started by a group of travel bloggers from Seattle. They choose one project that can be funded by Passports, so the first project was the Passport School. I donated to it, but I wasn’t a travel blogger raising funds that year. And then last year I helped a community in India, and basically it’s taking the power of social media and blogging and it’s a raffle type thing, you buy tickets for cool prizes.

JB: Excellent. I was wondering, what do you think is one of your more unusual travel memories?

Shannon celebrating Holi, the Festival of Colors in India

SO: Oh goodness, I think the most memorable moments are when dangerous things are happening. So I was in Slovenia and we were on this day tour, and they wanted to take us to the mouth of the Soča river which absolutely gorgeous. But to actually see the source of the Soča, which I’m not quite sure why we had to see that, you have to climb over rocks and then there’s just a rope. So you’re hugging this side of a rock and your feet are slipping down off into the river and the only thing keeping you from falling are your hands on a rope. And you just think, oh my God, this would not be tourism in the United States of America, you could never do this.

To get across, like the dike straddles this hole between the two rocks, and the guide tells us we’ve got to drop the walking stick and then grab his hand to help us jump across. We’ve got 14 people lined up, holding onto a rope, waiting to jump across a hole, where it’s like a straight drop down into the river.

JB: Then you have to jump back, right?

SO: Yeah, you’ve got to straddle the rocks again and he’ll ferry you back across the slippery rocks.

JB: When you travel you find out that other countries don’t have the same fascination with safety that Americans do.

SO: We are safety conscious. I went to the Grand Canyon, and there are definitely railings and that sort of thing. And then I went to King’s Canyon in Australia and various places, and you walk right up to the edge. There are no bars, there’s nothing.

JB: Maybe it’s because there are a lot of lawsuits in the US.

There was one more key question I wanted to ask you. When you’re traveling around the world with your backpack, how do you pay for all that? You must be rich right, that’s it? (laughs)

SO: I must be rich, and have a trust fund. No, I don’t have any of that. I actually left school with debt, and I still have the little tiny last remnants of debt to pay off. But I do my own SEO and content writing, web content writing, and I have a Marketing degree. I meet so many people on the road, and I’ve been able to help hostels that I’ve stayed at in exchange for a couple nights’ stay. I’ll take a look at their website, that sort of thing. Right now I feel incredibly fortunate that I have the job that I have, and the freedom to go where I want.

It also means that I’m still a budget traveler, but I also have to work. When other travelers who maybe saved US$25,000 see me at the hostel and I’m stressed because the internet is not working and I have to have this deadline finished, they don’t understand because they’re on vacation. I spend hours every day on the computer, and I’m in a really cool place, but it’s working, and so it’s different. Part of me wishes maybe I had stayed at home and saved up $20,000 and then took off and traveled, but I chose the instant gratification. And I’m glad I did.

JB: I interviewed Phil Paoletta on my blog in January, he worked as a teacher in Washington, DC for three years and saved money, and then he went to West Africa, but now he’s blown his savings. He’s going back, he doesn’t have any money though, but he’s still going back.

SO: I read his blog post, but he’s totally transparent when he said he’s got these new skills and he’s willing to try and find something.

JB: Yes, I think he’s young and doesn’t have that many expenses, and he can always fall back on teaching English.

SO: That’s viable. For the price of a teaching certificate of English as a foreign language, you could travel and get a job really easily.

JB: I’m interested in seeing in what turns up for him. I think that’s one of the big traveling myths, that you have to have a gazillion dollars in order to do it.

SO: Or that you have to do it this certain way. Everybody out here has done something different to get on the road. Like I work while I travel, my friend is a lawyer, everyone is different. It’s whatever you can do.

JB: Yes, I know someone who moved to Italy permanently. Donato just walked into his boss’s office one day and he said, “I’m moving to Rome in three months, you can keep me on the payroll or not, up to you.” He’s still working there about five years later, and it’s easy because it’s IT.

SO: Wow, and he’s working remotely. Well, I think that culturally the US is finally starting to move to results-based workplace where they realize that perhaps this model of keeping us at work for eight hours, no matter what, every single day, five days a week, isn’t very productive. This new mentality of location independent work is spreading, and I think that’s awesome.

JB: Me too. I want to thank you for sharing your time so generously.

SO: Thank you, it was fun!

Bio: Shannon has traveled the world for the past nearly three years, blogging at her site, A Little Adrift, the whole way. She left on a traditional round the world trip and is now on a slower route that includes volunteering, eating, and helping the planet when she can. She supports Breadpig because, really how can you not love an organization primarily aiming “to make the world suck less.”