Lenders’ techniques for discovering occupancy fraud

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Lenders have new ways to find out whether those who obtained mortgages really are living in that residence:

But what loan applicants may not know is that lenders increasingly are using more sophisticated methods to sniff out lies — and they are coming after perpetrators. Previously, lenders might have employed teams of “door knockers” to visit houses to see if the borrowers listed on the mortgage actually lived in the houses they financed. Or they might have run spot checks on loans using tax, postal and motor-vehicle record databases.

Now, however, lenders have gone high-tech. Companies such as LexisNexis Risk Solutions recently have begun providing them with digital programs that instantly tap into multiple proprietary and public data resources, then use algorithms to pinpoint borrowers who likely lied on their applications.

Tim Coyle, senior director for financial services at LexisNexis Risk Solutions, told me that the company’s popular occupancy-fraud detection tool for banks and mortgage companies accesses 16 different data resources to discover misrepresentations by borrowers. Since the program is proprietary and has a patent pending, Coyle would not divulge which databases it uses. But he confirmed that they include credit bureau files, utilities bills, federal and local tax data, and a variety of other information.

It would be interesting to know how successful these techniques are. Legally, how much evidence do lenders need in order to successfully go after borrowers? It is easier or harder than evicting someone? Are there ever any cases where homeowners are wrongly accused?

Perhaps sharing this information via the media is just a technique intended to scare off potential scammers – it would be a lot cheaper for everyone if fewer people tried to claim illegitimate residency. The consequences can be pretty severe:

What happens to borrowers who lie about property use and subsequently are found out? Usually it’s not pretty. Lenders can call the loan, demanding immediate, full payment of the outstanding mortgage balance. If the borrowers can’t afford to or refuse to pay, the lender typically moves to foreclose, wrecking whatever plans of long-term investment or vacation-rental-home ownership the borrowers might have had. In cases involving multiple misrepresentations, lenders can also refer the case to the FBI: Lies on mortgage applications are bank fraud and can trigger severe financial penalties, prosecution and prison time if convicted.

Given these penalties, it seems like an area of white collar crime that may not be that profitable…

Road damage costs $515 per car per year

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Urban roads that aren’t in peak condition cost individual drivers an average of $515 a year:

The numbers from TRIP show that 28 percent of the nation’s major roadways — interstates, freeways, and major arterial roadways in urban areas — are in “poor” condition. This means they have so many major ruts, cracks and potholes that they can’t simply be resurfaced — they need to be completely rebuilt.

Those cracks and potholes put a lot of extra wear and tear on your car. They wear your tires away faster, and they decrease your gas mileage too. All of these factors go into that calculation of $515 in extra annual cost, above and beyond what you’d pay to maintain your car if the roads were in good conditions…

The worst roads in America are in Washington D.C., where 92 percent of our major roadways are rated as “poor.” Conversely, zero percent of D.C.’s roads received a “good” rating in the Federal Highway Administration data analyzed by TRIP.  There is almost literally not a single good road in D.C.

But D.C. is a special case, since it is not a state and doesn’t have vast stretches of highway like most places in the U.S. do. So among the real states, the worst roads are in California where 51 percent of the highways are rated poor. Rhode Island, New Jersey and Michigan all have “poor” ratings of 40 percent or more. Dang.

The ending of this analysis is that we need to spend more on infrastructure. It may cost a lot to pay upfront costs to completely rebuild major roads (plus the time lost to congestion) but it may just pay off down the road with reduced costs for drivers. Such is the nature of infrastructure: well-spent money early on can save money and time later on. And, of course, there are better and worse ways to fight potholes.

But, there may be a second moral at the end of this story. Cars are expensive. You drive them off the lot and they depreciate. Gas prices are up and states are raising gas taxes. Insurance isn’t cheap and it is required. Maintenance can be pricey. New features – such as automation or backup cameras or alternatives to gas power – may just cost more. And to top it all off, many American settings practically require a car. (Indeed, this is a contributor to the spatial mismatch for jobs.) The whole system devoted to driving from cars to roads to garages requires a lot of resources that might have been spent elsewhere.

Photo essay demonstrating LA’s mansionization

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Here is a photo essay that shows the incongruity of a number of teardown McMansions in Los Angeles:

A developer wants to make as much money as he can as quickly as he can, where the only people whose feelings or quality of life he cares about are himself and whoever buys his newly-built mansion. A normal, thinking, feeling person could find many reasons why she would not want to rob her neighbor of privacy or sunlight by building a looming addition onto her house, with perhaps the most powerful reason being that her neighbors would hate her for it. A developer who will never live in a house he has built doesn’t have any relationships with neighbors to preserve. He actually stands to benefit from being indifferent/contemptuous to neighbors’ concerns, especially if it means he is able to build a bigger, more expensive, more obtrusive structure without the impediment of a guilty conscience. And don’t forget the long, noisy, messy, utterly unpleasant experience of living near a house under construction…

And that’s perhaps the biggest danger of mansionization. Regardless of what you think about mansionization and how it should or shouldn’t be regulated, there’s something about it that I’ve found to be consistently true.

When the first mansion goes up on a block of more modestly-sized homes, it sticks out like a garish eyesore. But if a second mansion is built on the same block, that first mansion suddenly doesn’t look nearly as big and out of place as it did before…

2015-07-01-1435742962-2381680-3inaRowGOOD.jpg
Three of a kindAnd at that point, the entire block might as well be mansionized — and chances are it will be. Having one mansion next to you is bad enough, but if the house on the other side of you gets mansionized, blocking sun and privacy from two sides, who would want to stay? Better to take what you can get and sell, leaving the house to a developer or new buyer who would inevitably go big — and another reminder of the now “old” neighborhood will be gone.

The critique of these new homes focuses on three areas:

1. It is often developers, and not neighbors, who go forward with the oversized homes. Neighbors might be more sensitive to the needs of others but developers are simply trying to maximize the property for profit. This may be true though there are plenty of cases where people buy properties with smaller homes and then make the decision to build a huge home. Developers aren’t the only ones to blame here.

2. The architecture and design of these new large homes are lacking. The homes are unnecessarily large and depart from traditional Southern California styles (stucco, clay tile roofs, etc.). These new homes clash with the older, smaller homes.

3. McMansions spread like a contagion: once a neighborhood or block has one, newer ones are soon to follow. The hint is that the teardowns need to be stopped at the start. A number of LA neighborhoods have been pushing for housing restrictions. But, it may be that one of these homes has to be built before neighbors really rally around the cause.

Gallup: most Americans are proud to be American

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In time for July 4th, Gallup has numbers on how many and which Americans feel “extremely proud” of the United States:

Proud to Be an American

In addition to the 54% who are extremely proud to be an American, 27% say they are “very proud,” 14% say they are “moderately proud,” 4% are “only a little proud” and 1% state that they are “not at all proud.”…

While most Americans are proud to be an American, certain groups are especially likely to say they are extremely proud. “Extreme pride” rises for each succeeding age group, from a low of 43% among those under 30 to a high of 64% among senior citizens.

Extreme pride also varies regionally, from a high of 61% in the South to a low of 46% in the West…

How proud are you to be an American --

None of these findings should be too surprising. Yet, one takeaway I have that I haven’t seen noted in the articles about these data is that almost all Americans have some pride in their country. Only 1% were “not at all proud” and then another 4% were “only a little proud.” This may be a product of the categories as well as a patriotic culture. Can you really distinguish between “very proud” and “moderately proud”? If you are “very proud,” what holds people back from being “extremely proud”? Perhaps the best way to get a handle on this would be to compare it to international data.

“How a time-use expert uses her time”

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An interesting look at how sociologists who study time use go about their days:

As a sociologist and director of the University of Maryland’s Time Use Laboratory, Sayer explores the ways that gender and social class guide the ways that people use their time. She looks for patterns and consequences of time use and the ways that these actions influence people’s daily lives.

When she’s not in her office, Sayer lives with her mother, who depends on Sayer’s care, as well as her husband and their three cats. And her recent trip to Texas was not for pleasure but instead to visit her sick older brother and take care of family business…

For many people, this blur of activity is a symptomatic of a condition that Sayer’s colleague, University of Maryland sociologist and time-use researcher John Robinson, calls “hurry sickness.”…

She’ll cram the leftover office work somewhere in between tidying up the house, feeding the cats, making dinner, eating (usually around 8), chatting with her mom and husband, cleaning, reading the newspaper and getting to bed by 11:30.

Don’t forget the impact of the invention of clocks on the modern era. And, for a variety of reasons, Americans seem particularly caught up with the clock – even if they aren’t particularly productive all the time. Workplace productivity has increased but that extra leisure time tends to go to things like television and not necessarily towards civic life. I imagine many sociologists have ideas about what would be best for people to do with their time but it is difficult to do many of these things – such as building and maintaining social relationships – within a social system which has additional aims such as making money or pushing mass media.

 

Beijing nearly doubles in population, environmental impact increases 4x

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Rapid population growth in Beijing has led to a much larger environmental impact:

Researchers from NASA and Stanford University recently estimated that the area directly affected by Beijing’s urbanization has quadrupled in size from 2000 to 2009. So while the area we call Beijing has remained roughly the same size, its environmental influence has grown far larger. These findings, published this week in the Journal of Geophysical Research: Atmospheres, draw on new computer models and data from NASA’s QuikScat satellite.

From 2000 to 2014, Beijing’s population grew from around 11 million to 21 million—today packing as many people into one city as there are in all of Australia (or North Korea or Syria). Strangely, the study didn’t measure the effect of more greenhouse gas emissions released by these additional residents and their vehicles. Instead, it only measured the growth of physical infrastructure—for instance, new roads and buildings.

The changes in the city’s physical infrastructure had massive, compounding effects on its weather and climate. New roads, for instance, reduce the ground’s albedo, its ability to reflect light and heat away from the city, and buildings prevented air from circulating freely. Those effects have resulted in higher temperatures and lower wind speeds. Researchers found that winter temperatures had increased in the city by 5 to 7 degrees Fahrenheit, while wind speeds were reduced by about 2 to 7 miles per hour, making the city air even more stagnant, according to the American Geophysical Union.

Some have argued that larger cities may be better for the environment in the long run because they use less land (and Beijing did not increase in land mass during this period) and there are economies of scale. Yet, this may primarily apply to (a) cities in the wealthiest countries and/or (b) cities with slower rates of growth. Simply adding ten million people in 14 years probably isn’t good for the environment as even the most advanced cities of today would have a difficult time absorbing that many people in housing, let alone dealing with the environmental impact. For a comparison, see the major infrastructure efforts in the Chicago region to mitigate flooding: the region has grown but this happened over a century and the Chicago region still has 10+ million fewer people than Beijing. And still it is very difficult to get a handle on stormwater and flooding during major storms, let alone in a city adding 10 million people in 14 years.

Chicago Epic marketing cut due to state budget

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Chicago rolled out an “Epic” campaign this spring to attract tourists but it is now no more due to a lack of state funding:

Chicago’s latest tourism campaign, Epic, is about to end two months early thanks to epic budget cuts at the state level.

Choose Chicago, the city’s tourism program, is losing 40 percent of its operating budget in the latest set of state budget cuts, according to Crain’s. That means Epic, the (perhaps unimaginative) summer tourism campaign launched in April with a TV ad encouraging viewers to “be part of something epic,” would end July 1 rather than run through the summer. Unless they are talking about an epically rainy June, the campaign ending this early wouldn’t leave much sizzle in the summer tourism industry.

Choose Chicago CEO Don Welsh said in statement that the program will lose most of its funding, from the state hotel tax, unless there is a last-minute approval of the state’s 2016 fiscal budget—increasingly unlikely as the week progresses…

The loss of Epic could deal a blow to Mayor Rahm Emanuel’s vow to boost tourism to 55 million visitors by 2020. Crain’s says Rauner, who was once the chairman of Choose Chicago, believes tourism is a boon to the local economy.

Two quick thoughts:

1. If you go with a catch term like “epic,” it is bound to be used sarcastically if something goes wrong (like the campaign ends early). Not exactly epic…

2. How do we – the public – know that such marketing campaigns work? Even though the Epic campaign is ending early, did it have any influence? Did the slogan catch on? What does this mean for future Chicago marketing campaigns? Just because a big campaign was out there doesn’t mean that it did much in this media and advertising saturated world.

Seeing American home trends from the 1900s to the 2020s

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This scrolling exhibit highlights some of the changes to American homes in the last 110 years. Here is what it predicts for homes in 2020:

Houses are nearly three times the size of homes from 1900.

Two master bedrooms (one upstairs, one downstairs) is a growing trend.

Water and energy conservation systems are becoming mainstream.

Extra bedrooms are being replaced by specialized storage (i.e. bigger pantries and closets).

Home automation tech (remotely controlling locks, lights, HVAC, and appliances) is booming.

There are some major changes over time this period including increasing size (with decreasing household sizes), more of an emphasis on cars, and changes in interior design and layout that take advantage of new technology and different social arrangements but are also subject to aesthetic whims (floating staircases in the 1970s, floral wallpaper in the 1980s, etc.).

Also noted: the 2000s are said to be the decade where “McMansionism continues.”

Avoiding McMansion sized furniture

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With new American homes increasing in size over time, it may be hard to find smaller new furniture:

I need help finding a sofa/sleeper that is not “McMansion sized”…

Have added a TV room on my house & would like to put a sofa/sleeper there so it can be used as overflow guest bedroom space. The stores all seem to sell HUGE sofas. Where do I find a (hopefully full size) sofa/sleeper that will not become “The Elephant In The Room”?

In addition to the larger new homes in the United States, might the larger furniture also be due to the growing size of Americans and the increase in obesity rates?

There must be some room in the market for smaller furniture, particularly if tiny houses or micro apartments are gaining in popularity. I know Macy’s has a small furniture line because we purchased a  bed in this line a few years ago – though the furniture isn’t really small but rather simply isn’t oversized. Here is how Macy’s describes this line:

If you’re desperate for more room around your bed, check out small spaces furniture for bedrooms. The Tahoe set has a headboard that’s full of storage space, or opt for a Hawthorne bed with matching leather storage at the foot of the bed. There’s every style from luxury leather to contemporary wooden and padded beds, ready to be dressed up with a striking duvet set.

Transform your space with a great selection of small spaces furniture at Macy’s.

If Americans must fill their larger spaces, they can go with larger furniture or more furniture. Either could fulfill the consumerist ethos…

A more holistic view of health with sociology, psychology on the MCAT

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The new MCAT has sections on sociology and psychology and this has led to new patterns of study:

The test has been thoroughly revamped and is now three hours longer. It takes 7 1/2 hours to complete, including breaks, and covers four new subjects, including a combined section on psychology and sociology that account for a quarter of the overall score.

Test takers will now have to define terms like “institutional racism” and “social constructionism,” and answer applied questions about how race and class affect health…

“Whether or not someone becomes ill has a lot to do with the society in which they live,” says Catherine Lucey, vice dean of education at University of California, San Francisco School of Medicine and a member of the committee that will assess the new MCAT…

How those conditions are treated has also evolved. Doctors know how to treat acute infection now. But managing chronic disease has become a much bigger part of medical care, and doctors need to develop different skills and a different kind of relationship with the patient. Doctors need to build trust, Lucey says, to understand how patients think and make decisions, in order to convince them to exercise more and change their diet.

For those in the comments who think that this is injecting liberal and untrue social science into the practice of medicine, there is plenty of evidence from a variety of fields that medical conditions are not solely dependent on physical traits or conditions. If you want to treat the whole patient, you need some knowledge of the patient’s social and mental well-being.

All that said, it will still be interesting to see whether this affects future doctors. Taking one class in sociology and psychology or looking at study materials on this subject doesn’t necessarily mean the principles will stick if med school programs don’t say much about these topics or knowledge in other areas is more incentivized.