Special offer

Mortgage Crisis and the Blame Game

By
Managing Real Estate Broker with San Diego Previews Real Estate CA BRE# 01101958

brad-inman.jpeg

Brad Inman last weekwrote an excellent article about the mortgage and real estate crisis that has gripped so many markets in the United States–and elsewhere. In The Housing Market Blame Game, Inman reports that even formerly raging real estate markets that were once seen as unshakable, such as Manhattan, are now beginning to share the pain with regions that had collapsed earlier.

Many blame the real estate industry for hyping the real estate market; others the mortgage originators. But Inman makes an interesting observation:

“….hyperbole from every day Realtors is not the underlying problem causing the housing quake. I would assign more blame to industry experts who peddled their demographic-as destiny arguments and ignored other issues.

This is akin to the expert analyst problem in the equities industry, where favorable reviews were tied to conflicts of interest.”

My response:

The blame game and finger pointing has become a conversation staple from Wall Street to Main Street. Some blame greedy hedge funds, some the greedy mortgage industry, some the greedy real estate agents, and some the greedy mortgage fraudsters.

The conversations that interest me most are the ones that seek ways to sift through the rubble to find approximate market bottoms (especially in the San Diego real estate market:-). That is where the next real estate fortunes will be made.

Greed survives.

Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

Roberta....  we need one big finger, because it has a lot of pointing to do.  ;o)  Seriously though, I wrote about this about 4 months ago and named about 5 to 8 different reasons why.

Brad does make a great point in this article of his. Stating that there will always be people that buy homes. And that the strong will survive. And that markets tend to rebound quicker at times. This market though?  I still believe it won't until 2009. I guess some will say sooner and some will say later. But overall, thanks for sharing this.

jeff belonger

Aug 26, 2007 11:19 AM
Karen Luke
South Metro Property Management, LLC - McDonough, GA
Henry County Real Estate

You know this whole mess we're in is a great argument for tightening requirements on lenders and realtors, holding them more accountable. Over should be the days of just any joe schmoe who can fog the mirror be in charge of someone's largest purchase and investment.

Perhaps standards will tighten.

Aug 26, 2007 11:19 AM
Simon Conway
Orlando Area Real Estate Services - Orlando, FL
We have to raise the bar for Realtors and loan officers, but none of that would change the greed exhibited by the major lenders who couldn't give money away fast enough to anyone with a heartbeat!
Aug 26, 2007 11:29 AM
Eric Bouler
Gardner Realtors, Licensed in La. - New Orleans, LA
Listening to your Needs
Simon, did realtors do anything to cause this? No one ever says tha prices got beyond most peoples ability to afford a home in many areas of the country. Markets make people think like a herd?
Aug 26, 2007 11:35 AM
Kaye Thomas
Real Estate West - Manhattan Beach, CA
e-PRO, Manhattan Beach CA
The problem is that there are a number of sub markets that don't fall within the big market difficulties.  Sure some of the unsinkable markets are going to see problems... only an idiot  thought they wouldn't have consequences trickling from the overall market woes.  The question isn't whether they will have problems but the severity of the problem.
Aug 26, 2007 12:15 PM
Marlene Bridges
Village Real Estate Services, Inc. - Laguna Hills, CA
Laguna Homes|Laguna Condos|Laguna Real Estate
Roberta - I'm with you.  Let's stop wasting so much energy pointing fingers and use it to move on and back into prosperity mode. 
Aug 26, 2007 04:13 PM
Marty Van Diest
Valley Market Real Estate - Wasilla, AK
Your Alaskan Realtor

I have heard people blaming real estate agents for driving prices up.  And then I have heard them blame real esate agents for driving prices down.

Part of a  listing agent's job is to tell the seller how much he can get for his house.  Sometimes it is higher and sometimes lower than the seller thought it was worth.

Part of a buyer's agents job is to tell the buyer whether the house is worth the price in the current market. 

Markets fluctuate because of supply and demand.  Supply and demand depend on the availability of money and the economy. Realtors don't control those things, they just react to the market fluctuations.

So much for the defence of real estate agents.  It really doesn't matter. 

Aug 26, 2007 05:02 PM