The  Results of UnPrincipled of Responsible Borrowing.

By Michael Mapes, The Responsible Mortgage Lender.

I received an email from a long time client who sounded so depressed about the state of the current housing market.  They have moved away, still trying to sell their old home and just recently closed on a new home in Ohio.   Her statement was "Michael, every time I turn on the news or read the paper I see something about the housing industry that makes me want to shudder".  As I pondered her reaction to the current state of affairs, it reminded me that actually things are not really bad in this industry.  "What?" you say. People are losing their homes in record number. People are getting laid off and entire companies are going out of business.  This is all true, but why? 

The entire mortgage and Real Estate system are to blame.  People were becoming Realtors because the money was good and buyers were easy to find.   The same holds true for Mortgage Brokers who needed no training what so ever to hang out a shingle and begin loaning money.  All they needed was a few products and a slick slogan and waalaa! they are financial experts.  Caught in the middle were a lot of decent people whose only goal was to finally own a piece of the American Dream.  These people paid more for a home than they needed to because speculators and fraudsters drove up the price of housing by flipping homes multiple times to individuals involved in the scheme.

However true the above is, Mortgage Brokers eager to provide the access to capital these people needed gift-wrapped loans to consumers that they could not afford, stated income on applications that was not real, and made silent second mortgages that had the lender known of would have never of closed.   With all this said, what ever happened to personal accountability?

As consumers were frenzied over homes, all reason with regards to "Can I actually afford this home?" went out the window.  "Buy now and find a way to pay for it later," became the norm.  In some cases, bidding wars drove up property costs above the actual asking price.  This further inflated a market that was bound to crash.

A home is a sustaining force in this country.  It's where we raise a family, come to at the end of the day, a place to lay your head at the end of long day and lastly it's your home.  The word "home" in my book is a place to go find meaning and peace.  Mortgage Brokers made the word "home" a place to fear, but they did not do this by themselves; the consumer helped them by not asking enough questions or walking away.

Responsible borrowing begins with you, the consumer.  If you see the payment and know that you are going to tight affording this home, walk away and find another way or find a home you can afford.  Sure it is not the perfect house but what is?  I do not live in a castle or big expensive house, but every night I walk into my 2 year old's room and give him a kiss goodnight as he lies there sleeping, peaceful and quite.  I then go off to bed knowing that my family is safe and secure. That means more to me than living in a castle or a big beautiful house.  My family lives in their own home; yours deserves the same.

This is a great time to be buying a home or even selling one and moving up.  The cream of the mortgage industry and the Realtor community are all that are left from all this consolidation.  This is good news for the consumer.  But as you ponder your next purchase ask yourself, "Can I afford this house?" If so, buy it. If not, move on to a house you can fford.  The stakes are higher than you imagine.

Michael Mapes can be reached at 757.599.1810 ext 225 or on the web at http://www.theresponsiblemortgagelender.com/ or www.suntrustmortgage.com/mmapes