Random Musing

Look, I know there have been lots of Star Wars and development posts/tweets (here, here, here), so I won’t belabor things. But forgive me a quick observation after seeing the most recent Star Wars: isn’t the continual construction of bigger and more powerful flying orbs of death by the bad guys (the Empire, then the First Order) a perfect metaphor for the sort of thinking that gave us the Millennium Villages?

Goal: Galactic Domination

Project 1: Star Wars: A New Hope

Logframe: Build giant Death Star space station, blow up a representative planet, watch galaxy cower in fear => Galactic Domination

Evaluation: Failure to address single design flaw results in giant space station destroyed

Outcome: Lack of Domination


Project 2: Star Wars: Return of the Jedi

Logframe: Build bigger, better Death Star space station, everyone will remember the last one blew up a planet, and because this one is even bigger the galaxy will cower in fear => Galactic Domination

Evaluation: Fixed previous design flaw, overconfidence in tactics and shields failed to account for another fatal flaw, giant space station destroyed

Outcome: Catastrophe, Complete collapse of the Empire


Project 3: Star Wars: The Force Awakens

Logframe: F*ck it, we’re making an actual moon/planet into an absolutely massive, sun-powered Starkiller base (rebranded to avoid stigma of previous Death Stars), blow up the entire Federation home system, watch galaxy cower in fear=> Galactic Domination

Evaluation: Pretty much the same flaw as with the second Death Star, with pretty much the same result: Starkiller base destroyed

Outcome: Still no domination

So, to summarize: we have a problem, we can’t seem to solve it, so we will keep plowing ahead with the same approach, but bigger and more expensive, because clearly it isn’t the concept that’s flawed, we just haven’t gone big enough!


Yep, sounds like a lot of development.

A very long time ago, J asked me to review his book Letters Left Unsent. I’ve long been a fan of J’s writing on his blog Tales from the Hood, and have had the fortune to meet him, hang out, and develop what passes for a friendship in an era where people living on different coasts, and constantly on the move, can stay in touch through various electronic means. All this by way of saying that this will hardly be an impartial review.

So, here is my one sentence review: If you are interested in going into development/humanitarian work, or know someone who is, you need to get a copy of this book and read it/give it to them.

This is not to say that you will enjoy every message in the book – actually, you or your prospective aidworker will likely hate whole chunks of it. The reason for this is simple: the book is hard – really hard. It’s not the prose, which is actually quite fluid. It is the content. The book contains some of J’s most unvarnished stories and writing, work that strips away the romance of the job, exposing it as just that: a job. In chapter after chapter, J demonstrates that development and relief work is a very important, rewarding job, but sometimes a job where the biggest impacts come not from handing some poor soul food, but in getting a spreadsheet right or from attending the right meeting. Further, these lessons are not delivered in a detached, objective manner that can be easily forgotten, but through personal stories that emerge as J points the keyboard at himself and his own experiences. This is no casting of stones at unnamed, straw-man others (something the world could use much less of). It is, at times, a brutal first-person account of the compromises, decisions, crises, frustrations, and rewards that this career brings.

To be fair, there are personal reasons why this book challenged me. First, I know J personally. This means that I know how seriously he takes this job, how hard he works, and how much he believes in what he does. This means I cannot dismiss this book as the work of a cynic or an anti-aid crank, and therefore when the stories and their lessons hurt, there is no easy escape route. Second, some of these stories hit pretty close to home. J and I live in pretty different parts of the aid world. I’ve spent the bulk of my career as an academic, with a brief stint as the employee of a donor. I don’t live for or between deployments, and I never really have. But I’ve been in donor coordination meetings for a major crisis (the 2011 Horn of Africa famine), and in reading this book, I was transported to days of watching terribly difficult decisions get made, measuring the toll the crisis took on people around me – and I still consider those experiences to be some of the tougher ones in my career. At the same time, I’ve spent an awful lot of time conducting fieldwork. In my early days as an academic, I would disappear into villages for months on end. In the pre-cellphone era, this tended to have a deleterious effect on my personal life. Some of the collateral damage from such travel that J describes marks my own personal history. In this book, I heard the echoes of some my own decisions, and my own consequences…

So, I am not J. But I know J, both in the sense that I know the author, and I know many of those in this field for whom he writes. From my perspective, his stories ring true, and the lessons they present are real. And I have my own reasons for feeling challenged by this book, but I suspect most aidworkers would experience similar feelings as they recognize themselves in this book. In the end, my personal biases and feelings don’t change what I think is the value of this book. It is an important illustration of the development/aid worker’s life that does not resort to pieties or broad brushes. Instead, it wrestles with the ambiguities of live in this career. Development work is hard. Humanitarian assistance is hard. It is thrilling and appallingly mundane. It’s malaria and spreadsheets. Mostly spreadsheets. We succeed. We fail. We keep going, trying to learn from both. But if you are headed into this field, into this career, you are headed where J has been. Only fools ignore history, even if it is not their own. Only a very foolish prospective aidworker will ignore this book.

I have nothing to say about the Trayvon Martin/George Zimmerman trial. I’m not a lawyer, I’m not involved in the case, and this country has more than enough marginally-informed people offering opinions.  I’ll not add to that mess.

However, I was deeply moved by this piece by Questlove. In it, he lays out how even a successful, wealthy artist cannot escape the categorizations imposed upon him by the way our society reads his skin and size. His elevator anecdote says it all.  Now, some folks might think his experience is overblown, or maybe unique. I am absolutely certain it is not.

During my third year at the University of Virginia, I went to the Barracks Road Shopping Center with my teammate, Donald Scott.  I think Donald drove. I forget what we were going there to buy, or exactly what store we were in (grocery? department store?).  It was the middle of the day, and both Donald and I were wearing our athletic-department issued sweats (UVa issued really drab gray sweatshirts and sweatpants, totally generic and nondescript) because we were headed to practice later.  Donald was wearing a Raiders jacket over his sweats. Basically, there was nothing on us that indicated we were students, let alone student-athletes, at UVa.

We went into the store, and walked up and down the aisles.  After a couple of minutes, I started to feel…off. Something was weird.  I started looking around, and after a minute or two realized that we were being watched. Not in passing. Rather directly.

As potential shoplifters.

Now, I’d been in this store many times, usually by myself (it was within easy walking distance of our apartment – Donald and I were just being lazy by driving), often dressed more or less as I was that day. Nobody had ever watched me like this. Nobody had ever watched me, as best as I could tell, at all.  Donald was the variable.  In the presence of a 6 foot tall, 185lb black man in a Raiders jacket, I was converted from uninteresting to potential criminal.

For the first time in my life, for just a moment, I realized what Donald must have had to deal with every single day, in any number of settings, and I was horrified.  Yet I say “for just a moment” because, of course, I am white and of an upper middle-class background. I could go home, change into some nicer clothes, and come back without Donald and return to my previously uninteresting self.  I had an escape hatch. Donald had no escape. None of my friends and teammates who looked like Donald had an escape. This was their lives. Every day.

I’ve never gotten over that experience – the very brief window into someone else’s life, and the horribly oppressive feel of that life.  I didn’t know how to talk about this with Donald, with anyone. What can you say to someone – sorry your life is so obviously oppressive because of the social expectations attached to your age, race, and gender?  Reading Questlove’s piece today brought that all back for me. I still don’t know what to say. Except that what Questlove describes is real, and is horrible, and deserves to be taken seriously.

It’s been a long time since I’ve written on South Carolina politics, and never on this blog (I had some op-eds in The State and the Sun News out of Myrtle Beach).  But there is an ongoing dustup in South Carolina politics that pretty much aligns with one line of my work in development – thinking about governance.  Development is plagued with people and programs that operate under the assumption there is a simple, straight line between democracy and good governance, or worse conflate the means (democracy) with the ends (responsive, transparent government).  This has led to many hilarious (read: sad) cases where development-donor sponsored work on environmental governance has focused on state-level capacity to write legislation and regulations on the use of the environment in places where a) the state has no capacity to actually enforce laws or regulations and b) where actual political legitimacy that might make such regulations work tends to rest at the local level, in the control of those who shape access to agricultural land.  And people keep wondering why all that work doesn’t seem to amount to much change on the ground?

Well, here in South Carolina we could learn a bit about our own governance issues from these various failures. The Speaker of the House here in SC, Bobby Harrell, has been under a cloud for some time regarding his use of campaign funds.  Jody Barr, an investigative reporter for local NBC affiliate WIS-10, had the temerity to actually start digging through records, asking for interviews, and then…wait for it…actually reported on the story.  And a bunch of people are shocked, yes shocked, that…Jody Barr would dare ask such questions.  Even if the Speaker’s spending patterns are really, really problematic. Like spending $54,812 of campaign money for memberships, dues, meals and receptions to two Columbia private dinner clubs. Or $54,834 on cell phones between 2008 and 2012.

Why, how dare anyone wonder how the Speaker ran up monthly campaign-related $1000 cell phone bills for four straight years? Or mention that the State Law Enforcement Division is, in fact, investigating this issue? That’s just so…impolite. Or something.

Now, the fact is that neither I nor anyone reading this (unless the speaker is reading) actually knows if any of these expenses are indeed fraudulent, or even pushing the boundaries of the letter/spirit of the law. It sure looks bad, but until SLED comes back with something, we all have to wait and see. Perhaps Mr. Harrell is just tarred by the brush of South Carolina’s painful, ongoing history of politicians who managed to enrich themselves, their families, or their friends via their office. Amazingly, quite often these actions were legal (see Haley, Nikki and nepotism), because for a very long time the state had very weak conflict of interest rules and laws (see Haley, Nikki – what do you mean I had to disclose my consulting work for a hospital, payday lenders, and an engineering firm with interests before the state? Nobody else does it, so why should I?*), and because governance in the State of South Carolina is staggeringly opaque.  This, it seems to me, is the point everyone here is missing, and it became clear to me today in a twitter exchange with State Representative Leon Stavrinakis (D-SC119). I don’t know Representative Stavrinakis personally, and I don’t have any personal issue with him.  But he popped up in my twitter feed when I noted that South Carolina has a remarkably opaque government at nearly all levels:

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My response, in which I was trying to point out that televising the end product of a long, informal process isn’t really transparency:

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And Representative Stavrinakis replied:

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Which totally misses the point, and worries me greatly. If elected representatives don’t understand the difference between the structures of government and the actual process of governance, who does?  Look, governance isn’t only about the formal votes. A lot of stuff happens before those meetings and votes, including the drafting of bills, that are shaped by various informal meetings and conversations. This is the informal structure by which representative democracy really works. Not every representative can know everything about every subject. Here in SC, they don’t have the staff support to become fully informed, either (this is a major problem at the federal level as well).  So a lot of their decisions are going to be based on the opinions and ideas pushed through this informal structure.

This is not a problem in and of itself – James Scott (among others) has observed that basically all large formal structures rest on lots of unacknowledged informal structures – but in representative democracy this becomes an issue because not every citizen has access to this informal structure (leaving aside the attempted use of absurd voting fraud laws to exclude part of the citizenry from the formal structure). This means that not everyone can exert the same influence on their representatives, and not everyone who is represented can understand the motivations of their elected representatives and therefore make an informed choice at the ballot box in the next election.  So, when you say you are making things transparent by televising votes, you are just televising the end product of a long, opaque process.

That’s not transparency. That’s theater.

Now, there is no easy fix for this. But a very nice first step would be to require full disclosure of all meetings that our elected representatives take during the day: who did they meet with, and about what? This would include “incidental contact” at private, non-governmental events, because this is where a lot of the work of the informal network happens. Yes, that’s right, if Representative X runs into a registered lobbyist at a wedding, and discusses a legislative issue with that lobbyist at the reception, the Representative should disclose that. If the Representative runs into the officers of a company with business before the State, and they discuss that business, the Representative should disclose that. Some might see this as intrusive. I see it as the price of admission to representing constituents in a representative democracy. This disclosure rule needs to have teeth to punish those who “forget” to do this, and it all needs to be posted publicly.

Second, representatives need to publish full lists of their donors IN REAL TIME, again in a public place. And again, give the damn rules some teeth, as a lot of our representatives are skirting this requirement with no real consequences. Third, representatives should have to disclose absolutely all of their business and investment interests. If you don’t like it, don’t run for office. I’d accept blind trusts for investments, actually, but that doesn’t work for businesses.  And all three of these public documents should be easily searchable, so constituents can quickly find out to whom their representative is talking, and from whom they are taking money and earning a living. Constituents deserve to know exactly how different votes might affect their representative’s personal interests, and be able to weigh a voting record to see if the representative is acting in self-interest, or the interest of his/her constituents.

Now, these first two steps would serve to push responsibility back to the voter for who they elect. Sure, in theory the responsibility sits with them now, but how responsible can anyone be when it is impossible to actually figure out what motivates the people running for office? Of course, just creating a situation where the voter might finally know what, exactly, he or she is voting for doesn’t guarantee they will pick good people to serve.  But at least the electorate could only blame itself.**

There is a third step that is needed here, however: do something about self-policing. Until this gets sorted out, voters will continue to grow cynical and apathetic in the face of problematic behavior in the government. You cannot have each branch of the government responsible for self-policing, as the incentives generally run against actually punishing anyone (because nobody wants to be retaliated against later by having their legislation or projects blocked. See Haley, Nikki – entire legislative career***). Yes, I do understand the concept of separation of powers. But checks and balances are key to the functioning of American-style representative democracy, and self-policing is not a check on much of anything. Court officers do have to answer to the bar, and while that is a fraught process in and of itself, the fact is that South Carolina has a branch of government accountable to someone or something other than itself, and the world has not ended.  This suggests that the legislature and executive could probably survive a similar structure.  Actually, each branch needs this to rebuild its legitimacy in the eyes of the public. At this point, very few people expect the legislature to do anything about the behavior of its own members (and don’t bother parading one or two high-profile examples out to argue with me, those are sacrificial tokens and everyone knows it).  And this is because the government has failed at governance.  The citizenry is getting frustrated, because the government neither responsive nor transparent.

A final point: this is not a “size of government” issue. There is no necessary connection between opacity and size of government. You can have a very small, opaque government (I’ve seen this at work in towns back in New Hampshire) and you can certainly have big, transparent, and responsive government (most of Scandinavia, for example, though I’ve recently heard rumors about the Norwegian oil industry working to suppress government environmental impact studies that they don’t like through opaque means).  What I am arguing for here is agnostic about the size of government – transparency and responsiveness are the goals of a governmental structure, regardless of its size. Just continuing to shrink the state won’t fix any of this.  All that effort does is slowly reduce state capacity, which means that sooner or later we are one of those countries in the Global South with a government that no longer has the capacity to enforce its laws and regulations (or provide water, roads, healthcare, fire departments, or policing).  I’ve worked in such places for my entire professional life. Most of the people living in them either wish to see reforms that make the state more capable, transparent, and responsive, or are working, as we speak, to to these ends. Why are we trying so hard to trade places with them?




*No, really, that was the crux of her defense. And it worked.

**This is a depressingly likely outcome. After all, Mark Sanford (R-Appalachian Trail) is back in Congress.

***I bet you thought I had nothing good to say about Haley. See, I’m full of surprises!

A great deal has been written about the tragic death of Aaron Swartz, so much that I considered remaining a reader and observer without offering comment.  But the Swartz case has me thinking again about access to academic research. Not one academic author of those articles was negatively impacted by Swartz’s act (downloading millions of scholarly articles from JSTOR with the intent of posting them online for free) – the more easily accessible the article, the more likely it is to be read and cited…and that is why we write articles.  It seems to me that most people don’t understand the fundamental absurdity of copyright in academic publishing.

I quote from one transfer-of-copyright document I recently had to sign:

In order to ensure both the widest dissemination and protection of material published in our journal, we ask Authors to transfer to [Journal Name] the rights of copyright in the articles they contribute. This enables our publisher, on behalf of [Journal Name] to ensure protection against infringement.

The whole point of publication is to get people to read and use my ideas – the very idea of infringement is pretty vague here.  I do not receive a cent for any academic article I publish, so infringement won’t affect my income. Anyone who plagiarizes me and gets caught will lose his or her career – I don’t need copyright for that. So there is no reason for me to sign this document. But what the document leaves vague is the fact this is not a voluntary transfer – the journal will not publish an article without such an agreement, and without publications the typical academic will have a pretty short career.  In short, the average academic is forced to sign away their rights to their work if they want to have a career (no publications means no tenure).  I don’t care about my rights, honestly, except when my work then ends up behind a paywall, downloadable at $30 a pop, nobody who needs to access it (i.e. colleagues in the Global South, or even colleagues at most development donors) can access it. Somebody is making a lot of money of my work and the work of my colleagues (see this article too), but it isn’t me.

However, there does seem to be an out here, at least for employees of state institutions, or those whose research is funded is funded under a federal contract.  From the same agreement I just quoted:

I hereby assign to [Journal Name] the copyright in the above specified manuscript (government authors not transferring copyright hereby assign a non-exclusive license to publish)… [my emphasis]

While I am sure this is not how it was intended when written (it is a clause to allow federal employees to publish publicly-funded research), I wonder if those of us either employed by a public entity, either directly or under a contract, can invoke that status to shift our copyright transfers into “non-exclusive licenses to publish.”  This would remove the copyright infringement argument used against Swartz, thus making it easier to pull articles from behind paywalls into the public sphere.  In short, we need to stop transferring copyright to for-profit entities any way we can…but this needs to happen in a manner that doesn’t blow up everyone’s careers.  Until the senior faculty in each discipline decide to intervene and shift emphasis to low cost, open-access journals, this could be a useful first step.  And low cost can be done – see Simon Batterbury’s comment about the Journal of Political Ecology on the post in the last hyperlink.

In short, academics need to step up and start resisting an academic publishing machine that makes serious money off of our job requirements, but provides little in return.  If we do so, perhaps we won’t need folks like Aaron Swartz to liberate our work – we can do it ourselves.

In order to vote on Tuesday, I stood in line for nearly 2 1/2 hours, mostly because the folks in charge of elections in Richland County, South Carolina cannot seem to figure out 1) how to allocate machines to precincts appropriately/according to the law and 2) how to fix the machines when they (inevitably) fail.  If Cheryl Goodwin, Richland County’s Election Systems Coordinator, is correct, there were the same number of voting machines at work Tuesday as there were in 2008.  Yet somehow my precinct went from five machines in 2008 to three in 2012.  There were, according to news accounts, 18 technicians in the field working on Tuesday.  Yet they could not address the breakdown of machines across the county, nor the breakdown of machines in my precinct.  Precinct workers told me they called for help around 8am as one of the machines broke down.  By the time I left, around 11:15, no technicians had shown up.  The debacle actually continues…it seems they still cannot get all of the absentee ballots counted, and several local/state races and ballot initiatives are still in play.

As I tweeted yesterday, there are two kinds of problems: there are the unforeseeable/very low probability problems. If a meteor hits a polling station, I’m willing to give people a pass on that one.  Then there are the problems related to being poorly prepared or just unprepared.  You know, like the problems caused by misallocating voting machines and then failing to respond to calls for help from precinct workers for over 3 hours.  THESE ARE NOT THE SAME. The first type of problem is understandable and excusable.  The second demands that someone be held to account.  Not that anyone is going to stand up and take the blame here, though…

OK, so Richland County was a debacle.  But it’s not like people were still voting at 11pm.  Oh, wait…

But the thing that infuriates me the most is the way in which so many in the media excused this debacle – several times I heard folks on TV say things like “person X had their voting card torn up in the 50s, so standing in line for a while is really a small sacrifice.”  This is complete garbage.  All of those people who sacrificed to ensure that women/minorities/non-white-male-property-owners could vote did not struggle just so that those who came later could be subjected to voting conditions that would be embarrassing in many precincts in GHANA.  The whole point of that struggle was to enable those who followed them to vote easily and freely.  The simple fact is that a five hour line…or a three hour line…or a two hour line can effectively disenfranchise someone who cannot afford to take half a day or more off from work, or who does not have childcare at home that enables them to stand in line until after 11pm to vote.

So media, let’s be clear: nobody suffered or struggled in the past so that you could give Richland County Election Commission a pass on this shambles of an election.  The ghosts of those people are shaking their fists in rage at your invocation of them to excuse the effective disenfranchisement of many in the electorate.  Someone had best be held to account for this debacle.  The cause of the problems has to be explained and resolved. Only then will we be honoring those whose struggles brought us the diverse electorate we have today.

A colleague of mine entered the search “climate change” (in quotes) in Google yesterday . . . and this blog came up on the first page, the 11th overall hit.  Out of 108 million hits.  I have no idea how I did this, but I know that people pay big money to be a first page hit . . . must monetize!


Because these things change all the time, my proof is here:



David Reiff has a great piece on ForeignPolicy.com called “Millions May Die . . . Or Not.”  It is hard to read, in some ways, because nobody really wants to criticize folks whose hearts are in the right place.  At the same time, couching pleas for aid in ever escalating “worst disaster ever” claims, is risking the long-term viability of charitable contributions:

By continually upping the rhetorical ante, relief agencies, whatever their intentions, are sowing the seeds of future cynicism, raising the bar of compassion to the point where any disaster in which the death toll cannot be counted in the hundreds of thousands, that cannot be described as the worst since World War II or as being of biblical proportions, is almost certainly condemned to seem not all that bad by comparison.

I see this as akin to blizzard predictions – what one of my friends long ago started calling the “Storm of the Century of the Week” problem.  I cannot take an apocalyptic blizzard prediction seriously anymore, because they are all apocalyptic.  One day this will bite me in the ass, I know . . . well, unless I stay in DC and/or South Carolina.

But there was one thing left unexamined in the article that I wonder about – Reiff notes, quite rightly, that:

All relief agencies know that, where disasters are concerned, not only the media but the public as a whole practices a species of serial monogamy, focusing on one crisis to the exclusion of all others until what is sometimes called “compassion fatigue” sets in. Then, attention shifts to the next emergency.

Reiff does not tell us the origins of this syndrome – and the article seems to suggest that it “just exists,” a cause of the ever-escalating claims about the scale and scope of a given disaster.  I wonder, however, if he has overlooked something important here – that perhaps the escalating claims are the very thing that has created this “serial charity/aid monogamy” by overwhelming our capacity to address the wide range of needs that exist in the world.

In short, has the competition for relief dollars created a cycle in which claims about the magnitude of the crisis will continue to inflate, further focusing the attention of the public and media into shorter and shorter cycles until it completely evaporates?  Are we looking at a midpoint to the creative destruction of the relief industry?  And what have the policy implications of this narrowing been – is there space to back up and think more holistically, and with greater perspective, to do a better job of assessing need and capabilities of meeting it?

I blog about a range of things here – mostly environment, globalization and development.  As a result, I have more than a passing interest in various global markets: food, carbon, and various natural resources.  I’m also interested in the financial products being generated in these markets, and the ways in which they might impact the Global South.  So I’ve had a tangential interest in the mortgage markets, if only because that particular financial swamp is so deep and murky that it remains an anchor on major lenders, which in turn contrains their lending activities and therefore influences these global markets.  But I never really thought about the mortgage debacle as something that mattered in my financial portfolio – after all, my wife and I have excellent credit, have never missed a mortgage payment, and have only ever refinanced to lower our rate.  We were supposed to be the model borrowers.

Yet somehow, in the fall of 2008, my wife and I became embroiled in some sort of shenanigans during a refinance of our mortgage with AME Financial.  I did not know about these issues until a few days ago, when our current effort to refinance turned over the rock under which they were hidden.  So what follows is one person’s account of how a mortgage can go weirdly wrong, even when you are diligently reading the documents and asking questions all along the way:

Recently, in an effort to take advantage of the really low rates, my wife and I initiated a refinance of our house.  We were looking at a very good rate – 4.5% without buying points, and 4.375% if we bought a point.  This would have lowered our monthly payment significantly, so much that it made seeking a refinance a no-brainer.  We shopped around and settled on a mortgage broker that we felt comfortable with, and proceeded to move on the paperwork.  Everything was going smoothly (though I must say, refinancing now is quite different than before the crash – the sheer volume of supporting documentation required is huge), when suddenly I received an email from my broker, asking me to call him.  When I got him on the line, he was very apologetic, but told me that their analyst had found something that was going to be a problem.

Basically, the analyst found that my previous originator (AME Financial) had prepaid the private mortgage insurance (PMI) on our loan.  AME Financial had given us a somewhat higher rate and then covered our PMI in the form of (to quote our current mortgage broker) ‘single premium lender paid MI’.  In his words:

Two of the most common ways of paying PMI is monthly or single premium.  Should the borrower wish for the lender to cover the entire PMI in one shot (single premium), the lender will usually up the interest rate by 1/8th or 1/4th of a point and then cover the PMI for the borrower.  The advantage that this brings to the borrower is that they don’t have to pay monthly PMI, but at the same time they take a little bit of a higher rate over the term of the loan.

Now, this is all well and good . . . except that AME Financial never told us that they were doing a single premium lender paid MI on our loan.  That was NOT disclosed to us at any time, and our HUD-1 form does not list any prepaid MI.  Instead, we received a PMI document outlining the payments we would have to make until we were below 80% LTV or until April 2010, whichever come first.  It was an odd document, though, as our amortization schedule seemed to suggest we were under the 80% loan-to-value required to avoid PMI before the first payment.  At closing, we were told that we could write whoever serviced our mortgage immediately, reference the schedule, and demand the removal of PMI.  This does not explain how, on a loan where someone did a single premium lender paid MI, and where the amortization schedule suggested we were below 80% LTV we were being charged PMI, of course.  If I made one mistake in this process, it was failing to grasp that I was being charged PMI on a loan whose documentation suggested there was no need for PMI.  I am still kicking myself, as I have no idea how I missed this.

As you might imagine, we immediately started calling in to have the PMI taken off.  Sadly, our mortgage was purchased by Countrywide, who was already a part of Bank of America.  In late November 2008, I called them up, and asked to have the PMI taken off.  They argued that the LTV was above 80%.  I noted that the amortization schedule they had just purchased as a part of a larger contract had the LTV below 80%.  They claimed they would have to dig up the documents to support this, and then stopped returning calls.  Then they disappeared completely, as Bank of America seemed to take over servicing directly.  It wasn’t until well into the spring that we figured out who to call at Bank of America about the PMI, since we still made payments to “Countrywide” for a while.  Once we sorted this out, and I got someone on the phone, I referenced our schedule, and they claimed the LTV was above 80%.  At first they just told me to call back, then they started arguing that there were three different values for the house listed in the mortgage paperwork (I have not seen any evidence for this).  I reminded them that a) I did not have evidence for this claim and b) this wasn’t actually my problem – the PMI document was a part of a signed contract, and if they didn’t like the terms in that document they probably should not have purchased my loan.  Bank of America rejected my efforts to have PMI taken off until April 2010, when we lawyered up and had our attorney send BoA a letter demanding the removal of PMI per our mortgage documents.  Suddenly, the PMI came off the loan.  I don’t regret waiting to lawyer up.  My father was an attorney who lamented the overuse of the judicial system, and the only reason we did in the end was to ensure our PMI came off in accordance with our loan documents, as it seemed BoA was willing to ignore them otherwise.

Now, we were owed over $3000 in PMI that we should never have been paying, and that made me furious . . . but I am the son of a lawyer, and I know how much litigation costs.  Had I sued BoA, I probably could have won a moral victory and broken even (legal fees would have more or less eaten up any award).  So I let it go, chalking it up to the horrific circus that was the collapse of our economy in the fall of 2008, and the chaos that ensued as the banks picked up the pieces.

However, with the information I now have, I am newly enraged.  This is a nest of a mess.

  • Clearly, AME Financial did something shaky – we had an appraisal that put us below 80% LTV, which meant we did not need PMI.  Yet somehow they originated our loan with what probably was a slightly higher rate, and did a single premium lender paid MI without disclosing any of this to us.  That is bad enough, but it raises another question for me: to whom did they pay this MI? Did they just fabricate the single premium lender paid MI in the documents and charge me a higher rate, thus pocketing a better commission, or was there an actual payment that went to someone? Neither scenario looks good for AME.
  • If AME was the source of this problem, what was going on with Countrywide/BoA?  Why was it in their interest to keep me paying PMI, when clearly I did not need to be paying PMI?

I haven’t got the slightest idea how to untangle this, but it looks more and more like this has moved beyond the unethical and the incompetent.

Oh, and by the way, because of the single premium lender paid MI on my current loan, and because we are refinancing after less than three years, it appears that someone will have to cover that cost on my refi.  This is happening even though I had fulfilled more than my obligation with regard to paying PMI, and the refi I am looking at comes without PMI on it.  What does this mean?  It means that 4.5% just turned into 4.875% so the broker can cover this cost.  This increase in the interest rate, over the course of the loan, will cost us about $26,000 in extra interest ($208,037.55 at 4.5% to  $234,433.75 at 4.875%).  So not only did I pay an extra $3000 in PMI that I never owed, as well as whatever extra I paid monthly on my slightly inflated mortgage rate (probably about $60, or $1800 thus far), I am being hit with $26,000 more in interest payments over the course of this refinance . . . all because of whatever the hell it is AME did back in the fall of 2008.  $3000 isn’t worth the hassle, but $30,000 probably is.

Folks, if my loan is screwed up, even in this small way, I have to wonder how many other lurking “small” problems like this are out there.  No, people in my position won’t lose their houses, but this is still a drag on the economy.  $30,000 could set up my kids’ college funds.  $30,000 could be used on home renovations that put contractors to work and add value to the property.  Instead, this money has evaporated into someone’s pocket, and will continue to do so for the next 30 years.

Anyone with ideas on how to get any of this back, let me know.  Seriously.  I am in the mood to make someone’s life difficult.

Folks, I am taking a much-deserved and needed break for a week.  Actually, I’ve been offline for a few days already.  See, while I am gone, WordPress and Hootsuite might kick out a post or two I have scheduled.  Nice.

In any case, I saw this story before leaving, and it made me happy.  As a former resident of Kentucky (my Geography Ph.D. is from there), I find it awesome that there are more barrels of bourbon in Kentucky than there are . . . Kentuckians.  Barrels, people, not bottles.  Barrels.  I really don’t care if the hipsters are the ones driving the supply, as long as there is a huge supply.  I plan to dent a bit of that over the next week or so in a nice, slow manner . . .

So, in honor of bourbon and the memory of my father, a quick story.  My father went to law school at BC in the mid-late 1960s, and one of the guys he lived with his first year was from Kentucky – of one of the distilling families, with one of those southern names that ends with “the third”.  Anyway, this gentlemen arrived on campus with a few crates of bourbon . . . without the tax seals.  When my father and some of the other folks in the house inquired as to how this was possible, our southern friend replied “Well, every year a truck backs up to Daddy’s house, and they just unload a bunch of crates in the basement.  Daddy won’t miss these.”  Now, I don’t remember which bourbon this was, but my dad said it was the good stuff.  In any case, the few crates that everyone had assumed would last a year did not make it out of the winter, and one day they are dry.  So, everyone heads down to the liquor store.  They head over to the bourbon, when, to my father’s surprise, our southern friend immediately ducks down and starts scrabbling through the bottom-shelf brands – “Old Dirty Sock” is how my father characterized them.  My dad, taken aback, asked what the hell he was doing – why weren’t they buying the same stuff they had been drinking?  There was no answer, and a second later bourbon boy hollers “Aha!” and emerges, toting a bottle of some cheap, no-name brand of bourbon.  My father looks at him and says “why the hell would you drink this?”  The Kentuckian points to the bottle, and says “you see that county there?” (bourbons typically identify the county in which they were distilled on the label).  “Yep” says my father.  “Well,” says our southern friend, “there’s only one distillery in that county, and it’s Daddy’s.”

That’s right, the good stuff in a crappy bottle.  There’s a metaphor here for development, but I am on vacation.  Feel free to work it out yourselves.

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