Love they way you said it.  So true.

Gene

Realistic Endeavors

Michelle,

If we had video blogs and responses...you'd see me standing on my chair clapping with SUCH enthusiasm!! I know...this kind of standing ovation doesn't quite "do it"....but wow...your post was soooooooo refreshing to read! I agree wholeheartedly as evidenced by my comments on the "other" post.

Here's the real shame.

You don't have the right amount of AR points to garner the attention this deserves. This will not be featured nor appear on AR's most active (I find that criminal). You also won't have agents coming in and giving you kudos for excusing their culpability...and you'll probably wind up with 20 responses instead of 250.

But, if this counts for anything....yours was a much better and much more positive and realistic post. No finger pointing, no pleading innocence. Just the facts...and a hope for a solution to the mess we're in.

Thank you for taking the time to write it. I, for one...think THIS is what AR should be about!!!!

Great job!

Dave

Well written and oh so true!  This crisis did not develop overnight and until the many causes are examined we will not be able to move forward and avoid making the same mistakes again.  Thanks! 

First you get on people for pointing fingers at others for blame.  Then you say you have to try to find the right person to blame in order to fix the correct problem.  Which is it?

I'll tell you who's to blame if that's what you want.

Nice job Michelle, we all played a part in this mess even if only by sins of omission, or figuring that the other guy (the buyer) could just look out for himself. 

It's a hard situation.  Buyers don't want to be told they can't afford something.  Agents quite reasonably don't want to take on the role of "mean teacher" wagging a finger at the buyer and saying:  "You can't have that!" when someone else has already said that they can have it.

Though I don't blame the mortgage industry solely, I do think it's the best part of the industry to regulate in order to prevent a situation like this from happening again. 

I'm applying for an exeption. Not only did I not do it, I have an alibi for the times in question.

http://www.activerain.com/blogsview/592082/IT-S-A-MORTGAGE

Great post.  Love the referee pic AND I'm glad to see David was wrong... Congrats on being featured!

As a title agent visting my realtors in the Lee County, Florida area I have found so many of them focused on what happened and who is to blame they are in danger of missing any opportunities which present themselves today.  My suggestion?  Learn from the errors, but don't spend time wondering who is to blame.  You will be much more successful in the long run.

::: smiling smugly :::

I was hoping that my comment about this post never being featured...would actually cause someone to feature it just to prove me wrong.

I LOVE marketing!!!

(and Congratulations!!!)

Dave

Thanks for the comments everyone, especially Dave.

Tim - There's a difference between those who determine the source of the problem in order to correct the situation and those who point fingers in order to deflect attention from themselves. 

Nice post althought I'm not sure you needed to write it. Seems like some "professionals" already have it down pat.  Kudos to those who acknowledge responsibility, you are seem a lot more reputable than those who cry "not me".

Excellent post Michelle - I'm still going to say I was too early in my career to be ENTIRELY responsible for the entire event. Whew, I feel better now. All that responsibility!!

The point is lots of bad decisions were made up high (investors, government, fill-in the blanks) based on greed, optimism and maybe some good intentions. Unfortunately, everything derailed.

We're tough - we'll get back on track.

Great article.  The real shame of your point is the fact that the problem isn't just a real estate problem, it's an overall society issue in this country.  Absolutely no one wants to take responsibility for anything any longer...at least very few of us have the backbone to do it.

"The school is at fault, the mechanic messed it up, the red light turned red too fast, and my son gets bad grades because the classroom is painted orange."

What we are seeing with the blame game in Real Estate is just a mirror image of virtually all of our society today.

Blaming keeps us in the past!

As a Realtor, I refer my clients to a lender that is responsible and ethical.  They explain everything in detail and I trust the lenders that I use.  I fight to not use a lender I do not know, as I do not know their morals.  I also don't look to the most expensive home to sell, I ask my client where their comfort level is and I focus on that.  The consumer is responsible for knowing where their comfort level is and knowing their finances.

From a loan officer standpoint, do you wonder how much business I lost from Realtors because I couldn't structure a deal the way they wanted to get their buyers into a house? And let's not mention the lost of any repeat busines - especially when another loan officer could or would? Yes, I know, you're on commission. In case you didn't know it, so am I.

There's another blog post running here on AR that puts all the blame on the mortgage industry. While I won't argue that the mortgage industry and the investors played a pretty large role in this mess (because we did), there are many real estate agents who aided and abetted it.

When I look at a borrower, I assess his or her capability to pay the monthly mortgage nut. If the capability's not there, or if the program is ripe for disaster, I for one will not put them into it. I'd rather lose the business now than be blamed later on for wrecking a household.

Case in point - I had a buyer once who wanted an Options ARM (Pick-A-Payment) loan because his father said that's the way to go. I knew he was unable to manage such a program, and highlighted all the reasons why he shouldn't do it. When I was done, I asked him to come up with all the reasons why he should do it - and if his list was longer than mine, then I'll do it. He couldn't even come close, and opted for the fixed rate mortgage instead - and one that fit his budget!

Interesting post  -- and responses.

Mr. and Mrs. Homebuyer:  It's not our fault we couldn't afford our mortgage and went into foreclosure.  The Real Estate agent should have showed us homes that were more affordable or recommended a more conservative mortgage person.  We really didn't understand what we were getting into.

Really?  My job is now to tell people that I'm not going to show them the houses they want to see because I don't think they can afford them? 

Honestly, I don't have a need to have more than a passing idea of their financial capacity.  My job is to find the home that meets their needs, but the responsibility for part of that need falls within the realm of the mortgage person...

After all, if my job is to qualify the client, what is your job? 

So, back to your example... there is a medium ground.  that would be...

You ask the first clerk you see where the light bulbs could be located and he replies "Not my department.  I work in Plumbing".  But let me take you to the lighting department and find someone to help you find what you need.  When you are ready for plumbing, I'm ready to help you there. 

Amen.  All are to blame.  It was more the mindset of our Nation, rather than any specific person or persons.  Our mentality became- get away with it now, worry about tomorrow later...  Now, we are all paying for our oversights. 

It has not stopped... I saw a TV add for Capital One last night and they are advertising, make your own card...  you can even put your own photo on it!  Anything to distract us from the reality of 32% interest.

The best part is- today and tomorrow, I/we can make a difference.  One person at a time.

JB Brookman

Castle Homes and Estates

Amen.  All are to blame.  It was more the mindset of our Nation, rather than any specific person or persons.  Our mentality became- get away with it now, worry about tomorrow later...  Now, we are all paying for our oversights. 

It has not stopped... I saw a TV add for Capital One last night and they are advertising, make your own card...  you can even put your own photo on it!  Anything to distract us from the reality of 32% interest.

The best part is- today and tomorrow, I/we can make a difference.  One person at a time.

JB Brookman

Castle Homes and Estates

SPOKEN JUST LIKE A MORTGAGE SPECIALIST! lol! Really, I am just kidding.

This problem really is a phenomenon ... I agree that no one person or segment of the industry can be blamed.  I believe that we all need to do a better job of educating the buyer or seller during the process - and keeping an eye on "the other guy" to be sure that they are doing the same.

As I consider the problem, I believe that this may be a societal problem.  In other words, (with the utmost respect) it is an American problem.  Purchasing a home is one of the greatest rights we have, but at some point in time, it may have become too easy and taken for granted.  The reality is that people who are unable to balance a checkbook somehow maneuver into leveraged investments worth hundreds of thousands of dollars.

When you look at the true complexities of home ownership - from simple repairs/ upkeep, financing, buying and selling, it is amazing that a few years of schooling is not required before a set of keys is handed to the new owner.

Hence, I think that much of the problem can be directed back to lack of education.  Beyond the myriad information of information available on the internet, I'm not sure that buyers and sellers are educated (enough).  Obviously, this is not always the case, but there are so many "if - then" scenarios, that the public is practically setup for failure in an economically difficult time.

There will always be those who don't care to hear professional advise.  There will always be those who make poor decisions, but we always need to be there to make sure that the appropriate information was available for a reasonable person to make a good decision.

Best regards,
Mike

Good job Michelle with tackling this subject. I'm sure it's commonplace in any industry, but it seems like I run across it regularyly in ours.

Michael Carter, Realtor

421 SE Main Street, Suite 201

Simpsonville, SC 29681

www.beachboyrealestate.com

Michelle, great blog.  I was so disgusted with that other blog, I was going to do one myself, but was so busy today.  I couldnt have said it better and I am glad you posted this.

And, I see some are still trying to defend their guilt.

As I stated in the other blog, I have seen just as many if not more fraudulent cases where the realtor was the guilty party (or where it was an ABA).......however, every segment in the real estate industry is guilty...realtors, loan officer, underwriters, wholesale AEs, Appraisers, title companies, CEOs, lenders, the FEDs, hedge funds, borrowers...EVERYONE.

Yet, some continure to try and blalme a group.  Its not groups of professions, it was individuals within each profession.

As an investigator of fraud for my prior company, fraud in purchases outweighed fraud within refinances by a astronimical amount.  Just food for thought....

Last thing, I agree with many others that have said that we can not focus on the past.  Let's work on solutions.  Hopefully, the scumbags are out of the business.  

And, if not........stop working with the scumbags.

I'm not a loan officer and I do believe it is therefore not my job to give my clients financial advice. I'm not qualified to do so and I'm also not licensed to do so. Just as I do not draft contracts, I'm only licensed to fill in the blanks. However, no biggy to spend some time online and get FREE downloadable brochures from Realtor.org about predatory lending practices and many other issues dealing with financing. I give them to my clients and I advise them to take the time to read them. I've done my job as their agent. I haven't given them financial advice but I have given them tools to make intelligent and financially sound decisions themselves. If they sign a rip-off loan anyway, then it's their own fault.

Michelle - wow - I hear you in every sense!  You really hit the nail on the head! 

Bob- Someone else already did a blog stated that the other person was WRONG.  In case anyone missed it.  I'd love to see your take on it too.

Mike - I agree that there is an overall lack of education is the country.  I guess the real question is who should be responsible for educated Mr. and Mrs. Uniformed?

Andrea - It seems as though you take the correct approach to helping your clients understand financing.  I understand that not all realtors are mortgage experts, just as not all loan officers are experts in the homebuying process.  But the two do go hand in hand.

Laura -I agree 100%.HOw can we fix this unless we examine the causes and everyone accepts responsibility?

Great question.  NPR had a terrific story about the many levels and general breakdown that has led to much of the crisis in the mortgage/ banking world.  I was surprised to hear a few "consumer victims" explain that they basically knew what they were doing ... they understood the risk involved and did not care about the consequence.  Once the proper education has taken place (which most people in this forum provide), it does become the consumer's responsibility.  So, I'd say that the educated consumer is as much to blame as anyone else involved - if not more so. 

I was involved, last night, in a discussion with realtors and lenders in my little corner of Florida which, I realized, may explain some of this "not my problem" issue.

As most of you are aware, Florida is a mess right now.  Real Estate prices have dropped to 1998 to 2000 values, leaving many homeowners in a position that they are upside down on their homes by no fault of their own.

The discussion had, at a social networking function, had to do with flips, are they legal or not?  From this discussion with both realtors and lenders I realized that we may all be to blame, in some small part, for the current problems in our industry.  I am not sure the discussion should have had anything to do with legal or not, but more to the point, ethical or not.

Try to imagine, realtor, lender or closing agent, that you are approached by a prospect who tells you that he is an investor who wants to buy investment properties.  He is a part of a group who will be looking at many properties for purchase in your area. Initially they want to buy up to ten properties but they will probably buy more in the future.  Are you going to turn this person away in today's market?  Are you taking the time to ask the hard questions? 

During the time you spend with this person you are told that he/she has an investor out of the Country, in another part of the country, whatever, who will be buying these houses from him at a profit.  Any alarm bells ringing yet?  There should be.  You see this is what happened here in Florida, causing property prices to escalate by 35% or more in less than a year before the house of cards built by this type of transaction fell.

So, the realtors sold the houses, the lenders got the loans approved and the closing agents closed the deals.  But how many of us, on some level, knew this was just wrong.

I heard, last night, that this is America.  Home of entrepreneurship, land of opportunity, etc.  Who were we to not sell, mortgage, close, on a deal if the seller agreed to sell, the buyer was approved for a mortgage, the closing agent closed it?  But on some level did we not all know that there was something wrong with the fact that the middleman was making mega bucks without any effort? 

So is the answer then that "it's not my problem".  More power to him/her.  That's the American way.  While we help build a house of cards that any of us who have been around for any length of time knew couldn't without a puff of air without collapsing.

Don't each of us, as professionals, have a responsibility past ourselves to recognize when something happening in our industry smells funny and take actions to prevent it from happening?  Shouldn't we have said "no, I can't help you"?  We don't because we know that they prospect will go somewhere else and someone not quite as ethical as we are will make the money.  But I ask you, how many of us are making money now?

The flippers are still here.  I have received calls from lenders and realtors alike in the past two weeks asking me how to structure a legal flip.  My thought process had been, until last night, that this might be a good thing.  If these prospects come in and buy a house for one price and turn around and re-sell at a higher price then property prices will rise again to the levels they should be at (not the inflated ones, but true market value).  I have to ask myself "Who am I kidding"?  What is to prevent prices from escalating past true market value again, as they did three years ago, if we have investors who want to go back to doing what casued all of this to start with and we haven't learned anything from past mistakes.

I hear realtors, lenders and myself saying "If I don't do it they will go somewhere else and I can't afford to lose that business right now."  But don't we all have a moral and ethical responsibility to ourselves and to our industry to stop this from happening again?

So, if you want to know who is to blame, look in the mirror.  Can any of us say to that person "I'm not to blame?"  How many of us not only turned away business, but reported those to the proper authorities when we knew they were doing business under illegal, immoral or unethical practices.  Many of those persons are now gone but so are many persons and companies who were doing business ethically.  We were all hurt during this past real estate fiasco.  Can we afford to get involved in seeing it happen again or is it time to "clean up our act, get involved on a higher level and make sure our industry doesn't help create a national economic disaster?"  Only you can answer this question for sure.

Mike- I agree that consumers need to be educated.  The problem is who has the  responsibility to educate them? 

Peggy - Very thoughful and insightful post.  I feel guilty that you only got 25 points for commenting on my blog when you could have got 200 if you had posted it on your own.  It is something that everyone needs to read.

In regards to filipping, I think in areas where there are not a lot of foreclosures it can be good.  If someone buys a home for below market value, improves it, and increased the value, good for him.  But the flippers based on speculation which occurred in FL are not. 

I too agree the blame game has been just rediculous and counterproductive to earning back the good name of true real estate and mortgage professionals. 

The bottom line is that those of us who were in the business before the boom and are still here after the fallout are responsible for moving forward and earning back some of the credibility, consumer confidence and reputation that was lost due to the current market fiasco.  We need to look to the future and emerging market segments and see where we can help people instead of just where we can 'earn a buck' and truly be genuinely interested in the greater good and restoring confidence in the market.  So in conclusion, lets blame less and take more responsibility for the future and stop living in the past.  What is done is done, nothing can change what happened yesterday, but we can live for today and plan for tomorrow.

Michelle---Amen and a round of applause to you!  No one wants blame, everyone wants to finger point.  It's amazing.  Very thought provoking post and you presented it very well.

Love it! Stop blaming everyone and try to fix it is exactly what we should be doing. The past is the past, but if want to move forward, we need to do it and do it fast and not worry about who is to blame.

James - Thank you.  Let's stop placing blame and let's all accept responsibility.

Amy - Thanks for the compliments. 

Todd - I agree but is this easier said than done?