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How Much Should Realtors Be Fined for Their Part in the Subprime Lending Crash?

Recently, a Think Tank began discussing the lack of Integrity in the Real Estate Industry and what percentage of blame was deserved where. Most Realtors blame the mortgage industry; the brokers, companies and the abundance of bad loans on properties during an unsustainable and irrational exuberance rise in home prices. Sure, that makes sense, everyone wishes to shift responsibility and it is hard to deny that the mortgage industry made some huge errors in judgment for some quick short-term gain.

Nevertheless, let us look at the Realtors and their part in all of this. Realtors either knew or should have known that the toppy market would fall hard and that variable rates would come back to bite folks making purchases in the rear. Realtors also knew or should have known that buying at the top of the market is a bad idea. Did they try to stop customers who barely could afford a home from buying homes or warn them? You know the little "ownership society" first time buyer's program? Certainly not.

biggie house

In fact, with easy money available, few if any negotiated their own commissions downward to help their clients. Many of those clients are now doing short sales, and losing money in the amount of the Realtors commission who sold them the home, plus the current commission to sell it fast before the payments are missed ruining their credit or before the bank forecloses due to already missed payments.

Are Realtors who made all those sales previously, who did not advise their clients of a bad financial move, willing to cough up their percentage of the ill-gotten gains? If they are unwilling or cannot afford it, perhaps we can put them in prison at a rate of $55 per day to make license plates until the consumers are made whole. Realtors need to accept responsibility for at least some of the blame - are they willing or in denial?

prison for realtors

I ask was the greed of Realtors part of the cause of the crash? Sure it was, they are to blame too, and so then, how much of that blame should they be forced to pay? What assets of theirs can we seize and how much hard time should they serve? I think that is the only question.

Indeed, I would like to hear a defense from those licensed professionals, who took advantage of the situation and made some quick easy money selling homes at the top of the market to would be and newbie buyers who quite, frankly did not understand just how fast they were burying themselves. Do not bother replying if you are just going to make an excuse to save your hide. Just admit it and tell me what percentage of blame you feel is rightfully your responsibility and how you can pay back society for your ill-gotten gains?

Posted by Lance Winslow on 01/02/2008 05:42 PM

Comments (68)

ill gotten gains, realtors, ownership society, real estate professionals, licensed, blame, greed, subprime

68 Comments on How Much Should Realtors Be Fined for Their Part in the Subprime Lending Crash?

JAN

2008

Wow, how do you fall into the group? Are you in the "think tank" or are you part of the problem or solution? Just wondering here. Interesting blog. Others have blamed the agents but I didn't think real estate professionals are among those to blame.

I see a lot of problems with health insurance. Can we pull in those people as well? Those that sold policies that didn't pay and the homeowners were left holding a ton of debt and losing their homes?

What about the administration...one who doesn't think we should pay for anything. I could go on but I won't. Blame can go on a long time!!!

Hey Lance,

I know on numerous occasions I had Realtors recommending to their clients to apply for an Option Arm type of loan so that they could afford more house. Many time the realtors would suggest those loan types to me when I would tell them the borrower could not afford the home the realtor was trying to sell.

Sean Allen

Can you blame Realtors anymore than you can blame the consumers that got often speculated and got in way over their heads? Personally I heard many agents recommending to consumers not to get in over their heads, yet they did it anyways. Of course there are plenty examples of the opposite, it can do a diservice to lump everybody together as a group.

Same with loan officers, they are getting a huge helping of blame too, but I know plenty of good ones that did their best to keep clients out of risky loans.

Personally I like to blame the investment banks, that created the creative financing schemes that made it all possible :)

Wow what a dig at professional Realtors. I am sure that there may have been some low life agents that fall into that bracket but the majority of us, and in particular Rainers are not and never will be in that category. As Karen says go pick on someone else. I am sure if you turn over enough stones you may find what you are looking for.

The adjustable rate programs were not very popular here but it appears we still have the foreclosure problem. Thanks for your thoughts I guess the buyers have some blame and agents must bear some of the responsibility. We can not protect everyone but we need to advise. Thanks for your post.

Good answer Mr. Graham Holmes. Thank you. I could not have said it better myself.

Ended up doing a lengthier response as it's own blog post:

http://activerain.com/blogsview/324701/Should-Realtors-be-blamed

I totally disagree with you. Buyers drive the transaction. When they want a house, they want a house. Several clients over the last few years, went against our advice and the lenders advice we referred them too, and found an online lender who gave them a loan. Against our better judgement and yes we told them to wait 6 months, improve their credit, save some money.

Did they listen? No! One is happy and still making payments, one already lost the house.

I have been in business 13 years, and started in 1995, I have never seen a cycle like this and agents I know in Ann Arbor for 30 plus years have NOT either. How can you predict job losses in MI, with the Big 3 restructuring? We consistenly appreciated 8% every year until 2001, not since 2005.

Sounds like the Home Owner got completely off the hook by reading your post. Since when it is our jobs to determine the potential Buyers ability to repay a loan? I don't hear cries from everyone to lock-up the car dealerships for selling cars that are eventually repoed.

Not being the one to actually hand them the money, I do not feel responsible for the situation a person may have got themselves in to when they knew it was a bad idea.

I have ALWAYS talked to my buyers about what they can afford -VS- what they can get a loan amount on. Initially many of my clients have started out looking at homes at around $50,000 more than they could actually afford... without living paycheck to paycheck and taking on night jobs to pay their mortgage. They get a number from the bank and go with it. It is quite depressing for some to realize that they can't actually afford to make payments on their dream home.

Many things seem to slip through prequalification with the lenders. They do not account for the costs of utilities, HOA or Condo dues, or all of the fluff a new home owner may want to have in their lives. Those items alone can be upwards of $500 per month up here + money to spend on frufru stuff that will make a person happy.

Maybe the question shouldn't ever be how much of a loan a person can take out on a home but rather HOW MUCH can you spend per month on a home without going broke.

Seeing as how I am NOT a financial adviser and I do not have a background in finances I would definitely be crossing boundaries if I started to tell my buyers what they are allowed to spend on a home.

We can't inspect homes because we are not licensed inspectors. But pointing out an obvious water stain that has drips coming down out of the ceiling is probably not a bad idea.

The same goes for representing a buyer. If I know for certain that they are already having trouble paying bills and it is obvious that they won't be able to pay a $2,000 p/mo mortgage, then I would have them go back to their lender to discuss their financial situation.

Then again I have been surprised by clients. I once had a client that was a manager at a fast food joint and her other half worked part time. Little did I know they had quite the cushion in the bank account and could pretty much afford whatever home they wanted to purchase.

It is not for me to know how much a person has in the bank, UNLESS they are making an all cash offer and I need it verified that they can do so. It is my job to represent them to the best of my ability throughout the transaction. A transaction which has many facets including Lenders (their first source for verifying the ability to purchase a home), Appraisers which determine the actual value of the home for the lender, Title companies which will give it clear title.

I honestly don't understand your disgust for Realtors unless by chance you have been "burned" by a bad apple.

http://activerain.com/blogsview/289297/I-pose-a-question

Lance...are you for real...Have you ever sat in on Floor time and had customers come in with a qualification letter and say lets go find a house??Thats the reality of this mess. The consumers stretched themselves beyond where good sense dictates and went out of their way to get a house....or two or three!!!

Put us in jail!!! The reality is that only a very small percentage of homes are in foreclosure...Only a very small percentage of buyers out of all the homes in the country were bought during this 3-5 year period. You don't bring up the fact that many of us bought homes in the begining and made a 50% or better return on the deal.>>>>>> Put us in jail!! Do you think we should put the drive thru workers at Mc Donalds in jail for making us fat!! I have been working distress sales and foreclosures for over 25 years>>>Put us in jail making license plates for 55.00 per day .....If you had ever seen what we did to get some of the people into homes, how much we did cut commisions, counsel, plead, beg...WORK untold hours to have about 60% of these deals to fall thru anyway.. Maybe the $55.00 a day doesn't sound so bad ...

And by the way...I believe that the next time you and your think tank get together..invite someone with a bit of common sense to add some validity to your obviously absurb misguided lack of thought process.

ANd by the way ...screww off with all your unbelievabley biased stupid assertions

Lance at least you are getting a reaction here.

I feel it's the buyer's responsibility to know whether or not they can afford a home or not. Whose qualifying these people the RE Broker? Maybe in other parts of the country but not here. I have been selling for 23 years and I haven't qualified a buyer in years. The majority of buyers are already carrying a pre-approval letter when they walk in the door. A lot try and go through an internet company and when we suggest they try one of our trusted Mortgage Officers then we get slammed for steering. I will suggest they shop around.

As far as we should have known when the peak was is ludicrous. The press started calling me in the fall of '03 wanting to know when the bubble was going to burst. Heck I didn't know but they kept calling all the way until the fall of 2005. September in 2005 is when I feel our market came to screeching halt. More properties were entering the market and buyers weren't knocking down the door.

Your post is stirring debate and I will have to respectfully disagree with you like most of my colleagues.

Lance, I came across your post via Matt Heaton's and have to say that I agree with his comment here.

I was just looking at you profile and see that you have car washes..I have a 02 Cad STS that I like to keep clean and feel that the money I spend on detailing and car washes should be refunded. The darned car just keeps getting dirty, the chome wheels need constant attention..Last week I feel the car wash KNEW it was going to rain, and still took my money. I feel that your business category owes me a ton of cash because I have still got a dirty car....maybe I should demand that you go to jail until I get back the thousands of dollars I have spent on cleaning my car ........if not..I think your butt should be in jail until I get my cash back ...I am sure you will have to take this up with your think tank...My address to send my check can be found at my profile...

JAN

2008

Matt,

Actually, I do not blame anyone in particular, just the entire system and all those involved. I was just posing the question and made an outrageous "Title" for the Blog Post to stur up a little controversy to see what everyone else thinks about it all. I suppose you are in line with how I feel about what transpired in the over all scheme of things. Lance.

Karen,

You make a very good point albeit a scary one to contemplate. This nation can only handle one crisis at a time. Yes we all know the health care system is broken and why is no one fixing it? Its obviously headed for a huge fall. Maybe there is something here to learn? If the Health Care System, has everyone start taking responsibility now, perhaps we can save it and build a solution "before it rains" God said to Noah. - Lance

Robert,

Hmm, interesting comment, what a double standard, in many other industries the seller is indeed expected to have a little bit of responsibility there. I am not saying that those who choose of their own freewill to go for a bad deal should not be made to pay on thier promise. I am not for a bailout of any sort actually. I do not believe the barrower deserves a break for free, I am asking should we hold the Realtors accountable and to what degree. I guess you are saying let them off Scott Free? Fine, you have answered you opinion, good enough for me. Lance

Missy,

Good for you, this is the professionally responsible thing to do, I would hope more Realtors would follow that common sense approach and ethically correct tact. - Lance

Robert,

Good point, and actually you probably have heard calls to lock up car dealerships, in fact, it is a huge deal with loans and car dealerships and several high-profile consumer agencies have gone after them. - Lance

Sarah Lee,

Ah ha, now that is a very good point. You cannot practice law without a license say lawyers, that is a law now. You cannot give financial advice without a "Financial Planning License" and thus, by law, its not the Realtors fault to shut up and say nothing, or in your case give them common sense explanations to their questions while telling them to seek out a professional such-n-such to answer their questions, someone licensed and qualified. So, then would you say that it is the Regulators Fault and the law's fault then? I mean you make an outstanding argument there? I think you should make this answer of yours into a post on your Blog, it is a decent point of contention -- Lance

Mike my Man,

Chill Out already, this is the Blog World, it is make believe, I posed the question from the otherside of the fence is all, who said I believe that with all my heart? People discuss these things in coffee shops across America, everyone is blaming everyone else and yes, Realtors and Real Estate Agents are often on that list, not always but often enough. Realtors are in the flow of the money and part of the transactional deal, so yes, they are part of what is happening. No, I have not spent time on the Floor, as I am not a Realtor, I am a franchisor, well, actually I am retired, and Yes, we had many buyers come in and plop down money and say lets do this deal. We had to back the deal up down the street and go through the process, 10-business day, disclosure periods, background checks, the works, and then we took the money. Yes, I know all about consumers, their persnickety attitudes, falsehoods, claims to fame and fortune, indeed, yes I hear all that. But, regardless, of your personal attacks, come on man, its a New Year, let's discuss this, like gentlemen here. Speak to you critics, because some of the Realtors maybe speaking to Congress and let me tell you when they do they better have their act together because on-going educations with reams of paperwork will be shoved up you butt so fast you wish you were never in this business. Can't you see the writing on the walls Mike? - Lance

Jay,

Indeed, I hear you, and your points of contention are good ones. Yes there are those "steering laws" and the ethics issues, so you could point to the law as being the problem, thus a policy change is needed at the state level in ALL 50-states, ouch, because I do not know of a time or an industry when every state was able to get on the same page with their rules and regs.

Yes the purpose of the Blog Post was to stir debate and get these issues out on the table and yes this effort has been fruitful in doing so. Of course, these points are important because these questions and concerns will not go away. The Realtors always say they know nothing about anything, and yet are intimately involved in every step along the way. But if this is really true as they say then they should not be allowed to debate me here, because in fact, they do not know anything and are completely innocent of any wrong doing. How can one have it both ways? - Lance

I, as a REALTOR of 18 years, had NOTHING to do with it! My clients are doing just fine, thank you very much. My husband and I are HONEST with our clients, and I don't believe that any of them are getting hurt in this mess. Please don't lump all REALTORS together as a greedy bunch with no scruples.

Lance--you sure do know how to rouse the masses! I think there is a politician or two who could have used your skills in Iowa. You could have raised your own caucus let alone get people to participate. You get yourself in trouble when you try to make a general statement that includes all Realtors lumped together. I am happy to say that I do not now nor have I ever had a client in a situation where they are losing their home due to any advice I ever gave them. I am proud of my profession and I resent your continued attacks on it.

First, I'll dismiss the use of the term Reatlor, when it should be real estate agent...

Second, I know that a lot of deals (still a minority, but a lot) that happened without a real estate agent. I also know of a good number of deal that went through without a mortgage broker or bank... some were the same deals.

Who do we blame there?

There are only two parties that were part of EVERY deal that happened... ever. Buyers and Sellers. Do we blame the buyer for taking $1,000,000 when a more reasonable price would have been $800,000? Or, do we blame sellers for saying to their mortgage broker... "Whatever it takes!"?

Should we nail agents for not saying "I know you want the house, but maybe you should sit it out... prices might come down... of course, THIS house may be long gone."?

Sorry, but the buck stops with the almighty consumer for spending money that had no idea how to repay... or thinking that they would always be able to sell for more if they got in trouble. Had buyers said "Enough!" sooner... there wouldn't have been a bubble.

Lance - You certainly have stirred the pot a bit and I enjoy a healthy debate. The blame game can be thrown around (and has) all day long. What % of that blame goes to whom is probably a rather subjective question that will never get a truly appropriate and factual answer. Personally, I like to shift thinking toward being a part of the solution and let the banter of blame by the tongue wagging armchair critics fall where it may. I'm on the Mortgage side of things and we have had our share to do with the problem...and can be a strong part of the solution.

On a side note, I'll take on .000000000000000000000001% responsibility of the blame and will serve my sentence listening to a 20 minute Pod-cast of Yanni while eating 12 ounces of Tofu:-)

Jason,

That was funny, but I sure don't like Tofu, that is a cruel and unusual punishment, yuk!

Lane,

Indeed, the consumer, house flipping speculator, etc. mostly to blame, they signed the note, they signed their name.

Sandy,

Ha ha ha! Very appropriate considering the Iowa political brewhaha. Yes, I have had a bit of my fill of politics, not a very impressive way to run humanity, but definitely a exciting to watch, it is a contact spectator sport indeed. Sound and Fury for the masses, Caesar would have loved it, well until the end, "Ides of March" beware!

Leslie,

Good points.

I fully agree that any Realtor who put their name on shaky transactions should be liable. This was the topic of one of my very first blogs here. We, as RE brokers, are the gatekeepers for our clients and it's our job to evaluate the loan product on their behalf. If we're not looking out for them, we're not doing our job!

I like tofu.

Jennifer,

Why do you like Tofu? I mean do you think it really tastes that good? I mean you have some great advice for responsible real estate professionals, but I do not like tofu? Why do you find it so tasty? - Lance

JAN

2008

I'm just saying that while Jason pretends to think eating tofu is punishment, I don't. And you know what? Neither does he! It just has to be prepared well and then it's luscious!! If I had been a part of this mess, I would accept my share of the responsibility and my punishment;)

Why limit the blame to Realtors? The Federal regulators allowed these loans to continue. Congress has the power to act, as does the President. Why not throw them in jail as well?

I've likely sold homes that the client could not afford? I got them a good price, their terms were with the lender. I did my job. I have clients who were approved for crazy amounts but actually new their limits and bought what they could afford. The consumer carries responsibility as do the lenders who qualified the buyers.

My job is to sell property. I locate and negotiate terms. Thats my job. I am not qualified to do financial planning. I can suggest where we offer at, and suggest where we stop at. Your suggestion is like blaming divorce attorneys on the high divorce rates. They are not there to keep reunite a couple, they are there to negotiate for their client.

One last thing to answer your question: Did you negotiate your commission down to help a client? No I did and do not. My commission is what I charge as part of my business. Feel free to find a different agent, I wish you luck and success. I'm not working for free. Regardless of what I sale, I still have overhead to cover on a monthly basis, I have bills to pay. Don't like my price, hire another professional. Don't like my service or we can't agree, fire me. Its a free market. If ever you feel like I am lacking in service, please address it. I want it on the table before it becomes an issue. If we cant get along I would rather release the client than have a pissed of consumer calling me daily.

Of course there are some bad agents but the vast majority are good. This is not their fault at all so no fines

Which Think Tank?

You sure did get their goat here they think they are the ultimate, good for you to take em' down a notch.

Take who down a notch?? They are the "Ultimate" what?

Jack,

Graham makes a good question Realtors are the Ultimate Jack _ what are you saying? Can you elaborate? - Lance

Sarah,

Yes, you are right there are so many Think Tanks saying the same things these days, I wonder if they are copying each other or maybe they just are all being paid by the same MoveOn.org. Never trust think tanks Sarah - Lance

Jennifer,

Well, I sure learned a lot today, I learned that Tofu is actually okay. You see, it is all in how its toasted they say. _ Lance

Dear Mike Norvell Sr.,

You ask; "Lance...are you for real..."

Of course not, I am a space alien who got abducted with Paris Hilton and Britney Spears, didn't you see that on the Oprahama Show last night? Come on, where have you been, buying up stocks and day trading using the WiFi at Starbucks while you sip on a Latte in your tie waiting for your next interested client to meet you to buy? I am not for real, I am an Artificial Intelligent computer designed by the CIA and NSA to trick realtors into posting comments, it is a special project to study pivotal points in psyche of potential terrorists, and you win. You found us out, but it was not easy finding you, but we have. You can learn more by listening to Coast to Coast Am with George Noory tonight?

Mike, give me a break, admit that you are evil:

http://activerain.com/blogsview/326307/Are-Realtors-Inherently-Good

Sincerely,

Caiaa AKA Lance Winslow

CAIAA - COMPUTER AI APPARITION ABARATION

Developed by Carnegie Mellon Computer Lab - Mike you've been had!

Hi Lance

I am a Realtor. You do understand that the sellers pay commission right? I ask because you say that the buyers have lost the commission it cost them to buy the home. I do not agree that Realtors are to blame. The seller hires me to get the highest price possible for his house and I do a good job at that.

Gordon,

Yes, the seller pays the commission and if you are the listing agent selling the home then indeed, you are paid to look out for the buyer's best interests and sell the home, thats your job. Now then, how much of that reality is the cause of the housing crash? Not how much damage was incurred by the buyers who bit off more than they could chew, that point is agreed upon. However, if real estate agents continued the game while the getting was so good then indeed, they agreed to feed the frenzy, which was in their best interests (commissions) and the best interests of sellers, house flippers and builders. I understand this is just busines, but it also contributed to the current state of affairs in the housing industry, what percentage do you feel that might be? Now then, the plausible deniability of blame from your POV is a good argument, yet, I would counter that y'all knew damn good and well that the feeding frenzy was a miss and out of control yet continued to play that game at full tilt for your self interests, without taking any responsibility or any moral high-road in most instances. - Lance

JAN

2008

I see someone up there has made accusations on me tell me i cant spell bull i can spell fine and this lance character reminds me of OBL or a little hitler anyway. realestate salemen are a dozen a nickle i dosent care watcha does with em.

I had to make a comment here. First, I'd like to say that these loans were made available by the lenders. If they had not made them available then we would not be where we are at today. If one store is selling Tofu for $10 and another is selling it for $5, most likely you're going to buy the one for $5. Lenders enticed the borrowers.

Second, because these loans were made available, everyone knew about it. This was then related to the borrowers by all parties. No one likes to take blame. This is human nature.

Dawn,

Excellent point, still from a percentage standpoint, how much blame percentage wise should be on the realtors. Let's say 35% between the mortgage companies and their team, and 35% buyers fault, that leaves 30%, which the regulators take a chunk of for their failures, how much goes to the realtors of what's left over? Lance

Lance

As always you have posted a contoversial topic and have been able to get many responses from all over the place. The issue that I have is that you make it out tha ALL Realtors are to blame...and that is simply not right. I had 38.5 transactions last year, NONE were into the ARMS. The lender is the one typically in charge of getting the buyer their loan and to EXPLAIN to them what the terms are. Also, there are many agents that are NOT Realtors, where do you lump them?

I had my car washed and got a scratch in my door. Does that mean that all car washes are bad?

I appreciate the comments, just not the delivery...

Ok, so try this one on...

An alcoholic goes into a liquor store and purchases a bottle of whiskey, drives drunk and dies, killing several others on his way out. Is the clerk at the store responsible because they sold it to the guy? Is the clerk supposed to ask every customer if they are an alcoholic? And if so what about the liars. Also, as a clek they are not "qualified" to assess that anyway. The only possible liability for the clerk would be if the person was obviously intoxicated when they purchased. So common sense is here but that is all.

As an agent I was told numerous times until I could repeat it in my sleep. I am not an attorney, I am not a tax advisor, I am not a bank or financial advisor. It is illegal for me to advise you on any of those issues.If a client has questions that relate to any of those topics they are encouraged by me, by the law, to ask a properly trained professional(not me). I have advised clients to not do a,loan and had them listen. I have also had clients get a loan that they could not pay . If I smoke a cigarette is it the tobacco co's fault? If I eat McDonalds and have a coronary is it the cooks fault? In my opinion, one must take responsibility for ones own actions. My job is to sell homes. I do. I am ethical and I can sleep at night and look in the mirror. Can the loan officers, CEO's and the Gov't? Or do they even care. A witch hunt is fun, until you find out you burned the wrong one. Careful, careful...

The blame game is designed to keep responsibility at bay. Ever notice how the big scandals end up at the the little guys feet? Sure, some could have been better agents, some probably had no idea, were new or did not think about it. None of that excuses the professionals whose job it is to help consumers finance a home. The lenders! It also does not excuse the home buyer who knowingly signed up for a loan they might not be able to do. Don't tell me they all were bamboozeled. Not buying that..so, maybe there are some agents who did the wrong thin, join them with the lenders, the buyers, the neighbors, family members and TV talk show speakers. Then you might have an idea of how wide spread the problem actually is.

Just my 2 cents. Thanks for the thought provoking post! :.)

Lance, you do like to stir the pot but you raise an interesting question. Oh I could get all defensive about this but in truth I think the responsibility for the mess rests on a lot of different shoulders.

The lending industry first and foremost for allowing mortgages to be funded for people who's only qualifications were that they could walk and chew gum at the same time and qualifying them based on current rates, not what they would be when the rates started to accelerate.

Appraisers share the blame for justifying prices when they knew that the prices were inflated.

Sellers share responsibility because they decided it was their due to make ridiculous profits on their homes. Sellers still think they should make outrageous profits on their homes because their neighbor down the street did two or three years ago. When they can't them, the agent gets the blame.

But in the end, the only ones truly at fault is the consumer. They allowed themselves to get caught up in a frenzy either through purchasing more home than they could truly afford or through refinancing an existing home to pay for the second home or the "toys". They fell victim to the excitement of the times and made bad decisions based on that excitement. If someone wants something bad enough they are going to make it happen and darn the consequences.

In my opinion, the agents are only responsible to the point that they too got caught up in the frenzy and allowed their clients to get involved in the bidding wars and multiple offer situations. It was an exciting time in Real Estate and it was easy to get caught up in that excitement. I personally lost buyers because I knew the prices were inflated and that things were not going to keep going up. Like everything else, what goes up must come down and I felt I would rather lose a client than have the fallout later when they wanted to sell and found themselves upside down on their property. It comes down to a little word with big meaning - ETHICS or lack thereof!

Vanessa

Please stand up and take a bow...(clapping in the back ground) you put it into words about as good as anyone could have done. Too many times people want to put the blame for their actions onto someone else, instead of looking at themselves first. Thank you very much.

Lance,

In my area of Tennessee, there have been lots of subprime mortgage made and many hitting foreclosure.

Personally I believe the realtor and lender should share the blame. Also, sometimes that client will not take no for an answer.

As far as fines, if that realtor broke the law, then he or she should pay the penalty. I have many times seen realtors and martgage broker pull some fast ones and I am sure the underwriters had no idea what was going on. There are a few realtors and mortgage brokers out there giving the rest of us a bad name.

I could say more about bad realtors but will not now. Isn't there a limit on how much space I can take with a comment?

Mike,

If real estate agents share the blame how much do you believe that they ought to be assigned with? Percentage wise? Should we say 15% or is that way too low? - Lance

I seriously doubt that you can seriously think that most realtors would stoop to those levels! Granted, there are bad apples out there, but you will find that in any profession. I don't think most of us would steer clients to go in over their head - we do live on referral business and most of us want to be able to sleep at night!

Barb and Bill,

I tend to agree with you that most Real Estate folks especially those in it for the long-haul are not the guilty ones. - Lance

JAN

2008

Wow..Finally an admission that you actually think that most of us should not be blamed... Congratulations Lance I knew the therapy would work after a while.. :-)

Graham,

In the Bloggosphere you have to be outrageous sometimes if you want to get interest or start a conversation. Lance

Well you certainly achieved that. I still believe you should however be little careful how far you take it... I knew the masses would break you eventually :-)

Ha Ha Ha, that's funny Graham, be well, Lance

Lance, I think your question needs to be aired, but I disagree with your conclusions.

Too many real estate agents want to blame everybody else including the client, the mortgage guy, the banks, greed in general, and stupidity. They don't want to accept even a small portion of the blame. They don't fully understand what it means to be a fiduciary and an agent.

But that said there wouldn't be the need for blame if the market hadn't crashed and burned.

Personally, I lay the blame at the feet of the Federal Reserve. See Greenspan, The Evil Villain

Bill Roberts

Bill,

Yes, but also Greenspan was the one that coined the phrase "Irrational Exuberance" right, so it is almost as if he pre-warned things. I have a hard time blaming the FED, but do not think they should have stated that the "housing market" is doing fine or is strong, when it was clearly "toppy", but I am interested in your reason for blaming the FED. And, I would not say that my conclusions in the post are actually conclusions, rather shocking real estate agents into looking at their own mirror, because one was complaining to me at Starbucks the other day in Malibu, yes the same one that Paris Hilton goes to, it's across the street from her 14 million dollar play house on this erroding beach. She is smarter than you think, she bought her home after the crash, maybe people should have listened to her instead of the FED? ha ha ha.

Anyway, I digress, the point being that the real estate person whose office is down the highway, within a mile of here, stated that the real estate market tanked and blames the Foreign Banks, Investment Firms and such for pouring money into the mortgage industry. I asked her, But didn't you also advertise homes for sale; "This one won't last long" or "This is a steal at 20 million" and she said, that's just marketing, its not my fault. Hmm? no not entirely, but partially and the percentage at fault is relevant. - Lance

I personally think that the largest share of the blame falls to car wash guys.

Paul,

That's too bad because we were trying to clean up the world, oh well, what do they say about the laws of unintended consequences? Maybe a dirty world is better for all those humans? - Ha ha ha, Lance

JAN

2008

All,

We have concluded that real estate agents and brokers are 13.6 % to blame for the economic fallout of subprime lending debacle. lance

Good Lance, now onto Mortgage Brokers, Appraisers, Title Companies, George Bush, & our beloved Fred Rodgers.

Jason,

We actually do have:

Mortgage Brokers,
Appraisers,
Title Companies,
Bush Administration
Foreign Banks
FED
Etc.

Right now with 111 articles this month, I am not getting any points from ActiveRain and very upset, so, I will wait until next month to post the final assessment of blame. Real estate agents came out lower than I had expected, but the push for an "Ownership Society" was quite a bit of the blame judging by when those comments were made in speeches and the graph chart of how the bubble accelerated. Unfortunately, one could argue that there is no ownership society without equity, those folks only own a piece of paper that shows their debt (they own a mortgage) not a home. Therefore they might walk-away, BK or end up foreclosed, that is certainly not an ownership society, that is akin to living a lie. Lance

Email Bob Stewart Lance, he would be the one to ask on points. You are more than welcome to have mine if you immunitize me from any blame:-)

Jason,

Thanks, I'll do that, I keep going over that darn 10-articles a week "rev limiter" and it is really aggravating, I should be at nearly 50,000 points right now, but they instituted that ruling before I signed up to prevent folks gaming the AR system with meaningless junk. I understand, but still it is a bummer. Lance

JAN

2008

Hey Lance,

I do enjoy this blog that you have inspired people to raise more than the eyebrow... kudos to you. This Short Sale Specialist is caught on the hook. As for my two cents goes.

"The Blame Game" is just a waste of time and efforts because it cases a negative tone for a witch hunt. I do believe we need to spot and repair the error that is needed for future endeavors and that could be any hand that touches the jar. Nothing is perfect in our economy and the drive in the US is based on eat or be eaten fueled by monetary gains. It comes down to two simple things everyone needs to keep in mind... and that is ethics and knowledge. For the industry to be more controlled then it would have to be regulated with harsher mandatory guidelines and certifications.

Would you let the average newly graduated high school student run your finances and one of your largest transaction of your life? And to run the economy when never experiencing the negatives of any business or is their E-bay auctions sufficent enough experience? Well, sad to say it was done in many aspects of this industry.

Being able to experience vocationaly many different countries it seem that something we in the US lack something, and has been dramatical declining from the past few decades, that we need so badly. And that is....

(grain of salt for all to or not to taste)

John,

And I thought I made people think? You sure bring up some great points here. Lance

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