• short-sale-urban-legends

    Short sales have overtaken foreclosures as the preferred method for disposing of distressed mortgaged properties. As the popularity of short sales climbs, so does the amount of short sale misinformation and urban myth. Let’s debunk a few legends.

    1. Short Sales Take Forever: This used to be true! Banks would diddle around for a year or more before allowing a short sale to proceed. The federal regulators finally had enough of the banks slow-walking the process and issued new rules that affect most lenders. The decision on whether or not to accept an offer now should be made within 30 days and definitely in no more than 60. Lenders are obligated to keep homeowners informed about the decision status with periodic updates.
    2. Homeowners Walk Away Empty-Handed: This also used to be true! The bank forgives part of the homeowner’s mortgage, which technically is income, but the homeowner never sees any cash from the buyer – it all goes to the lender, as it should. What’s changed is that banks now routinely award relocation reimbursements to homeowners who agree to short sales. This amount can be as great as $35,000 (Bank of America). These incentives are one reason homeowners are more amenable to short sales.
    3. Short Sales will Wreck the Homeowner’s Credit Rating: This is not quite true. What wrecks your credit score is withholding mortgage payments. If you keep current on your mortgage balance, a short sale will leave your credit rating intact. You may even be able to secure a new mortgage (on another property) within months. Foreclosures can destroy your credit rating for five years; bankruptcies can poison your score for up to seven years.
    4. Short Sales Can Create Tax Obligations for Homeowners: This is not true for the rest of 2012. A special law waives the tax on the forgiven loan amount, which normally would be treated as taxable income. The exemption expires at the end of 2012 – technically, short sales agreed to by December 31 have another eight months to close under the exemption.
    5. Short Sale Agents are Interchangeable: Really false. Some are great, some stink. For instance, for every good San Diego short sale company, there is another that you should avoid. Do your homework before picking an agent to represent you in a short sale transaction. There are special documents and procedures used for short sales. A regular real estate agent without short sale experience can end up making costly mistakes. It’s always better to use a specialist with a long background in short sales.
  • car-insurance-urban-legends

    There is a lot of misinformation circulating about car insurance, according to a prominent Tampa Fl auto insurance broker. Some stories are almost funny and some are almost believable. Here are a few urban legends that caught our attention:

    • “A speeding ticket will automatically increase your premiums.”
      Unlikely. Most car insurers will not raise rates based on one speeding ticket, but will if you make a habit of it. Normally, an insurer looks at how quickly you were speeding. A ticket or two for going five or ten mph over the limit will seldom cause a rate increase. If you get caught doing 80 mph in a 30 mph zone, you may be reclassified as a high-risk driver, which may increase your rate. The occurrence of an accident in conjunction with a speeding incident complicates the situation, and must be evaluated in its full context.
    • “Red cars are charged higher rates.”
      False. Insurance companies are color-blind. It is very rare that they even ask about the color of the car. We’re not sure how this myth got started. Some say white cars are involved in more accidents. Well, yes, there are more white cars on the road than any other color, so we guess they would be involved in more accidents, but that stands to reason. Sports cars are often red – perhaps that’s where the myth started. It’s not the color that will drive up premiums, it’s the fact that a fast sports or performance car is likely to be driven more aggressively.
    • “The automobile insurance industry is unregulated.”
      False. This is just untrue – auto insurers must be regulated by each state in order to protect car owners. Each state has its own rules and rates. Moreover, any insurer that wishes to raise its rates must first obtain permission from the state. If the insurer fails to gain permission, the insured is due a refund.
    • “I wasn’t driving my car, so it’s not my fault”.
      False. The only time you are off the hook is if your car was stolen. If you lend your car to a friend or your brother-in-law, you still are responsible for everything that happens, just as if you were behind the wheel.
    • “My rate will drop when I turn 25”.
      Coincidence. It’s not your age, it’s your mileage. As you gain more experience and go more years without a claim, you eventually qualify for a rate reduction. However, if your history is littered with violations or accidents, don’t expect your rate to go down.
  • urban-legends-of-drugs-and-alcohol

    When it comes to the urban legend business, nothing generates more interest than tales about drugs and alcohol. Sociologists are unsure why we are so fascinated by tall tales about intoxicants, but some point to a fascination with “naughty” pleasures. Sex and gambling would fit into this realm as well. Let’s debunk a few urban myths about drugs and alcohol.

    1. Drugs are freely available at drug rehabs.
      If only! Once in a while, a highly publicized case arises in which a celebrity has drugs smuggled into her court-ordered rehab facility. This is strictly verboten and could get the celebrity thrown back into jail. If you check into a drug rehab, you are kissing off drugs and turning around your life. Why on earth would you ruin it by trying to smuggle in drugs?
    2. Mexican beer workers pee into the beer vats.
      Yuch! This rumor started in the mid-80s. It hurt sales of Corona beer. The slur was traced to a competing Heineken distributor. The truth came out in a lawsuit, where the distributor admitted guilt and retracted the rumor. This little urban legend cost Corona over half a million dollars in corrective advertising.
    3. Champagne glasses were molded on the shape of woman’s breast.
      Bawdy, but false(sy). The women in question ranged from Helen of Troy to Marie Antoinette. The wide-brimmed glass was invented in 1663 in England under quite innocent circumstances. Champagne itself was accidently discovered by a Dom Perignon, a Benedictine monk.
    4. Print ads featuring liquor have subliminal messages like “sex” imprinted on the ice cubes.
      Um, there could be some truth to this one. Liquor companies vehemently deny it, but noted psychologist Dr. Wilson B. Key has written books to the contrary. It seems sort of unnecessary, as liquor ads are usually pretty racy to start with. Of course, if you believe you can never get enough smut, you might buy into this rumor.
    5. English brewers add fish guts to their beer.
      Double yuch! But true!! The substance is called Isinglass and is made from sturgeon bladders. Some British ales use it as a fining agent to remove impurities like proteins that cloud the brew. Also true – French winemakers had once used animal blood to fine their fine wine. It’s now illegal (in most places).
    6. You can beat a breathalyzer test my sucking on a penny.
      Nope, copper will not mask alcohol in your system, though a dirty penny in your mouth could give you an infection. By the way, the modern penny is only 2.5 percent copper – the rest is zinc.
  • betting-myths-exposed

    If you are into betting, you might have heard more than your share of nonsense, tomfoolery, and outright myths. Many bettors feel that they understand mathematics and statistics, but often they don’t. This lets them fall prey to incorrect information. If you have ever read a good betting blog, you know from the reader comments how some people carry around a lot of misconceptions. Let’s explode some these myths, shall we?

    1. Parlay bettors who like to bet the total and side should take the over on the favorite or the under on the underdog. You win if the underdog stays close for most of the game, at which point the favorite should pull ahead, covering the over. If the under can keep the favorite from scoring, the odds are you’ll cover. Unfortunately, research indicates that the underdog plus over occurs more often than the favorite plus the over.
    2. Dice get hot. This is true if you light a match underneath them. Otherwise….. I know, I’ve been in many a game where it seems that seven disappears, except when coming out. Obviously, the dice are hot, right. No, you are just in the midst of a random event that is paying you money. Don’t forget, your dream roll is a nightmare for the don’ts. So your hot dice are someone else’s icicles. In the long run, the house is going to take all your money unless you practice very strict money management – quit when you are ahead, and don’t lose a dime more than your pre-established limit.
    3. Hedging lowers risk. This is sort of true, but in reality, you are just betting against yourself. The alternative is to lighten your primary bet. Don’t forget, the house is collecting vigorish on both sides of your hedge. You can achieve the same payoff by just cutting your initial bet and not hedging. This way, you slow down the house’s take.
    4. Never bet against “virgins”. By virgin, we mean a young lady who has never bet the game before, whether roulette, craps, or the ponies. In some games, her bet is public. She’s put $5 on the come line, so you put $5,000 the same way. I’ve seen this work a lot. I’ve seen this fail even more. Worst of all, the young lady will have no idea what she has done to you. Oh well, it’s only money.
  • martial-arts-urban-legends

    When I recently visited a Fredericksburg martial arts studio, I came across a blog in which an Asian-American Judo expert went through a rather angry rant about urban legends that we Westerners have developed regarding the martial arts. He starts off with his college days back in the ‘70s, when the TV show Kung Fu was popular. He considers the show a racist stereotype – I have to admit ignorance on that matter. But he does strike out at a number of urban legends:

    • Walking on Rice Paper: Rice paper is for writing, not for walking on. Apparently the opening of Kung Fu shows David Carradine walking across some rice paper without tearing it. The blogger called it “hokey”. This was made up for the TV show, and is not a real thing that Shaolin monks do.
    • Taoist Wisdom: There is much Taoist wisdom handed down through the generations, but don’t look to Kung Fu’s Master Po for any meaningful distillation. The blogger called Po’s pronouncements “vague”. Hey, philosophy is vague enough as it is, without Hollywood mucking it up even more.
    • Courtesy: The TV show also apparently gave a whole generation of would-be Shaolin priests an inordinate belief in their own abilities. Our blogger was approached by a classmate who wanted him to be his randori (free-style practice) partner, without ever having tried randori. This is like asking Eric Clapton for beginning guitar lessons. Despite what you hear about the egalitarian spirit of eastern disciplines, you just don’t do this kind of thing – it’s insulting. By the way, the student got his ass whupped.
    • Black Belt: There are many misconceptions of how one attains a black belt. The common belief is that it is earned through shedding blood on your white or brown belt. It’s not nearly so dramatic – just an acknowledgement of competence, no blood required. By the way, the first level black belt means you have just started serious study.
    • Hakama: the garment worn over a kimono was not adopted by martial arts fighters to “hide their feet movement” as legend suggests. In fact, during battle, wearers would hike up their garments and tie up the bottom so as not to trip. Aside from that, the Hakama was to samurai as jeans are to us.
    • Swords: “Once a sword is drawn, it must taste blood”. Only in video games. How would a samurai clean and polish his sword under these circumstances? It’s another childish misinterpretation of an otherwise solemn warrior attitude.
  • top-ten-hair-loss-urban-myths

    There are many men (and women) in this country that might benefit from hair loss treatment but have been held back because of some fanciful urban myth. This is a shame, because hair restoration has been shown to help a segment of the population that experiences emotional difficulties related to thinning hair. The thing about urban myths is that they are hard to track down and even harder to correct – the myth seems to spread like wildfire while the actual truth is strapped to the back of a turtle.

    We’ve made a list of the Top Ten myths related to hair loss. Take a look and see if you’ve been harboring incorrect information that has been deterring you from seeking treatment:

    1. Helmets and hats cause hair loss. Unlikely, unless the helmet is literally ripping the hair out of its sockets. Should this be the case, after a while you will probable develop a local bald spot. You can avoid the problem entirely by wearing a proper-fitting helmet.
    2. Hair transplant surgery is only for men. Not true, many women make excellent candidates for this type of treatment. It depends on the nature of the hair loss.
    3. Hair surgery is undetectable. This is not true, because all surgery leaves scars. Hair surgery can leave thousands of tiny scars or one long one (from a strip hair transplant).
    4. Transplanted hair does not grow. Untrue, all but two percent of hair transplants will undergo growth. There are, of course, a lot of variables that affect the long term behavior of a transplant.
    5. Few women suffer hair loss. Unfortunately, the truth is that about 40 percent of middle-aged females experience hair loss. Female hair loss is a serious problem because many people consider it socially unacceptable.
    6. I would have kept my hair if only my pores didn’t always clog. This not true – go to any homeless shelter and you’ll find dozens of men with full heads of dirty, greasy hair. Clogged? Yes. Thinning? No.
    7. Hair loss slows down as you age. If only! The truth is that once it starts falling out, it will continue to do so unless you treat it. Ask Rob Reiner.
    8. Over-shampooing causes hair loss. Not true, and the shampoo makers really hate this urban myth.
    9. I can thicken my hair by first shaving it all off. Nope, that won’t help at all. Sorry.
    10. I’ll look like a freak from a hair transplant. Only if you already look like a freak! Choose a good doctor and you will look fine. Do not try do-it-yourself surgery – that would be freaky!
  • urban-legends-bodily-emissions-in-

    I’ve seen my share of strange organic things showing up in my clients’ swimming pools. Look, if you easily get queasy, maybe you shouldn’t read any further. For those of you made of sturdier stuff, know that humans are, in fact, animals, and as such, quite capable of really disgusting acts. I would have to say the vast majority of these cases arise from young kids and teenagers – the former have accidents, the latter make political statements (though I’m not sure what point they are trying to make). In any event, this is definitely not an urban legend, for the most part.

    By far, the most common complaint is that Little Tommy pee’d in the pool. C’mon folks, these things happen. After all, you parents out there built the pool in the first place – what did you expect would happen when your little kid was let loose? Now, if this turns into a chronic problem, then you’re obliged to seek professional help for the child. Obviously you are doing something wrong in your childrearing methods, or else the kid has some sort of mental defect. In either case, I would advise you to ban the kid from the pool until you get the situation sorted out.

    Now, some kids graduate to pooping in the pool. Poolpooping is quite different, however, when practiced by a teenager. Then you’re talking about a form of rebellion that I can’t begin to fathom. What kind of worthless and weak parent would let their child go so far off the rails? There are two types of teenage poolpoopers: those who do so in secret as an act of vandalism, and those who stay in the pool and point out their achievement. The undercover poopers are definitely protesting something in a way that is bound to gather attention. The proud showoffs, however, must be on drugs or something. They obviously have no idea of the difference between pride and shame. One can only hope this behavior can be channeled into something that turns this confusion into an asset: congressman comes to mind.

    Finally, there are those hormonally-charged teenage boys who leave some little swimming buddies behind. There is an urban legend of virgins getting pregnant this way, but I’ve not been able to confirm this.

    I’m not even going to get into pool vomiting. If you have any stories that speak to this issue, please leave a comment below.

  • urban-legends-homes-sales-tax

    I come across a lot of misinformation regarding tax obligations associated with the sale of a home. Here’s one I’d like to knock down and correct, the so-called Medicare sales tax of 3.8 percent on all real estate transactions. This is an excellent example of how a fairly complicated rule gets misinterpreted, mostly maliciously, to make the Affordable Care Act look bad.

    The truth is that the Medicare tax provisions are aimed at only the top three percent of the population, and the amount of tax is not on the sale price of the home, only the amount above specified thresholds. The so-called “sales tax” is actually a tax on investment income (which may or may not result from the sale of a home) that applies to individuals with income of at least $200,000 ($250,000 for couples filing jointly). This excludes 97 percent of the US population. The investment income tax will be assessed only on the amount of real estate transactions profits above a $250,000 threshold ($500,000 for couples). So, for high-income couples who realize a $499,999 profit on their home sale, the Medicare tax is exactly 0.0 percent. And if your income is below $200,000, you could receive a few million dollars in profit and not owe a dime in this Medicare tax.

    How did this spurious rumor get started anyway? Fingers point to a guest column in the Spokane Spokesman-Review written by Paul Guppy of the Washington Policy Center (WPC). Guppy left out all of the income and profit threshold information, making it seem that everyone would pay 3.8 percent on every home sale. So how did Guppy get it so wrong? Maybe it’s the people he hangs out with. You see, the WPC is a member of the American Legislative Exchange Council, the infamous ALEC known for its ultra-right-wing legislative efforts. ALEX funnels money to legislators and lobbyists to support the model bills they craft and push, such as the “Shoot to Kill” law that resulted in the killing of Travon Martin, as well as vaginal probe ultrasound laws that force women seeking legal abortions to undergo a state-inflicted rape. ALEC is also behind the laws seeking to disenfranchise minority, student and senior voters. ALEC is so venal that large corporations like Coca-Cola and Pepsi have dropped their memberships, and many more are likely to follow.

    The bottom line: when you hear about some terrible-sounding thing about to happen to you at the hands of President Obama, it’s almost certainly not true, but rather a maliciously planted rumor to gin up hate and anger among the least educated of our population.

  • urban-legend-claims-about-obamas-home

    Distressed homeowners are not finding anything funny about the current real estate market. In my town, a San Diego short sale agent nonetheless brought to my attention a humorous story about President Obama’s Chicago home that became an urban legend by conspiracy theorists. The gist of the story is that the President came to Chicago for a fundraiser, only to find his home foreclosed.

    The story goes like this: President Obama had a shocking homecoming when he found out that his residence in Hyde Park had been foreclosed some time last year. Obama was visiting Chicago for fundraising events and decided to visit the old homestead, only to find new locks and new owners. The house was in disrepair. The story goes on to say that the Obamas had neglected to make any house payments since the inauguration and the house had become “an eyesore” – a weed-strewn lawn, stray cats crawling through the property, neighbors keeping the kids away for fear of rabies, etc. The rundown condition of the house brought down the property values throughout the neighborhood. Loud, Spanish-channel TV streamed from the house 24-hours a day. Then, in May 2011, a spinal surgeon bought the house at foreclosure auction. Was he surprised when he caught President Obama trying to jimmy the lock! When the President was told what had happened, he apologized and left. The next day at the White House, he downplayed the significance of the event, saying “Whatever. It’s cool”.

    The real story stems from a January trip to the windy city, when one fundraising event bought the president back to his old neighborhood where he joked that he wanted to make sure that neighbors weren’t “bringing down property values” in the neighborhood. He was surveying a crowd of 140 supporters at a neighbor’s house and he was pointing out old friends in the crowd. It was a convivial event in which Mrs. Obama reminisced with people “who watched are kids grow up”. The President at one point asked “Is somebody mowing the grass in front of my house?”. He had the whole crowd laughing.

    This was great material for the satirists at the SuperTuesdayNews website, which published the fictitious piece of humor on January 12, 2012. Right wing websites then picked up the story, apparently believe it was true (and apparently believing that the Secret Service would allow the president to go rummaging about his Chicago house by himself in the middle of the night). Even now, some wingnuts are using the story as proof why the president is unfit to lead our great nation. These are no doubt the same ones who think the moon landing was faked!

  • urban-legends-property-rites

    Some urban legends are just downright stupid. Here is one: bury a plastic statue of St. Joseph in your backyard to get your home sold. There is a story about a lady who had some San Diego real estate for sale and had been unsuccessfully trying to unload it for seven months. So she buries the saint in the yard and on the following day a group of nuns comes to look at the property. Three weeks later, the nuns make an offer that is accepted. As an extra touch, the price agreed upon was the highest ever seen in the neighborhood.

    Give me a break! Nuns!? First of all, don’t they live in convents? But furthermore, how desperate do you have to be to think a plastic statue will precipitate a sale? This would truly be a miracle. Shame on realtors who stoop to this level. They are so unscrupulous, they even give detailed instructions just for verisimilitude – for instance, make sure the saint’s head is pointing up and don’t dig him up until the house is sold. What a load!

    Well, where the heck does this story come from? Apparently, the Middle Ages in Europe, that’s where. According to legend, some nuns buried a medal of St. Joseph in the hopes he would help them find a convent. Others say that German carpenters would bury statues of St. Joseph in house foundations. The best story goes back to the late 1800s in Montreal. A monk, Brother Andre Bessette, wanted to buy some land on which to build a small chapel known as an oratory. When the owners wouldn’t sell him the land, he started burying St. Joseph medals all over the property. All of a sudden, the buyers had a change of mind, and Brother Bessette got to build his chapel.

    The urban legend can be traced back to 1979 in the U.S. Apparently around 1990, it became a big fad, as realtors started buying plastic statues by the carton. The legend states that after the sale, you should dig up the statue and place it on your mantel. Alternatively, you can leave the saint buried on the property in order to protect it from harm. But wait a minute, if you leave the saint buried, doesn’t that mean that the house will be constantly sold and resold? That doesn’t sound to me like a happy ending!