My Melbourne Relatives

I do believe that my dad's sister Cami and her husband Bill have certainly lived lives and raised children that are geared towards making a difference in the world.

Their son Tim is Director of a research lab that's leading the field in seismology/techtonics. See http://www.geodesy.org/index.html?page=http%3A//www.geodesy.org/tilt/explanation_ETS.html for more. Tim got his PhD from CalTech and has been a Fulbright scholar and his permanent position is as a professor of geology at Central Washington University.

While Tim has watched the earth shake their daughter Ruthann has seen a shakedown occur in the banking industry. She was the Chief Risk Officer at IndyMac Bancorp that failed earlier this year. As the housing bubble from earlier this decade has deflated its brought down many businesses. And seeing what Ruthann and others have watched its obvious that nothing can ever be taken for granted on this planet of ours. For example, a November 23rd article in the Detroit Free Press includes the following:

The lending industry seconded Reich's concerns at the time, arguing that the government was needlessly depriving families of a chance at homeownership. IndyMac argued in a letter to regulators that in evaluating loan applications it was not fair to rule out the possibility that a prospective borrower's income might increase. "Lenders risk denying home ownership to qualified borrowers," chief risk officer Ruthann Melbourne wrote.

An article today by the Associated Press says the following:

One of the most contested rules said that before banks purchase mortgages from brokers, they should verify the process to ensure buyers could afford their homes. Some bankers now blame much of the housing crisis on brokers who wrote fraudulent, predatory loans. But in 2006, banks said they shouldn't have to double-check the brokers. "It is not our role to be the regulator for the third-party lenders," wrote Ruthann Melbourne, chief risk officer of IndyMac Bank. California-based IndyMac also criticized regulators for not recognizing the track record of interest-only loans and option ARMs, which accounted for 70 percent of IndyMac's 2005 mortgage portfolio.

My own opinion is that the mortgage banking industry overlooked one key factor in their models ..... home prices might go down. And why they overlooked this factor is because (a) home prices on a nationwide basis hadn't ever fallen since the Great Depression, (b) conventional thinking that government safeguards and the internationalization of global markets would prevent another Great Depression from causing home prices to fall, (c) data-driven modeling that didn't include sufficient data to model for the "what if home prices fall" scenario, (d) modeling on historical data for new creative mortgage products that hadn't been in existence very long, (e) the importance of market pricing in modeling which allows underwriters to offload much of the risk to the marketplace. For the articles highlighting Ruthann's comments please see http://freeinternetpress.com/story.php?sid=19241 and http://www.google.com/hostednews/ap/article/ALeqM5hTDPY8hFtJLxsv8i1Q7OvoRrlYrQD94PQ0JO0

I think that if anyone is going to figure out the modeling for asset-backed assets going forward it'll be Ruthann. She only got a Master's from CalTech and PhD in Math from the University of Wisconsin because she's got the brains to figure things like this out. And Ruthann's husband Adam Steltzner is certainly doing well in his field. He works at the Jet Propulsion Lab (JPL) in Pasadena, California 25-member team responsible for the landing phase of the Mars Rover missions. See http://articles.latimes.com/2008/mar/04/science/sci-giantrover4 for more on this.

Tim's wife Anne is accomplished herself. See http://www.cwu.edu/~chem/faculty/johansen for more on her position as a Chemistry professor at CWU.