"Show me the money?"
What used to be a funny line in Jerry McGuire, is not funny at all in the real estate world. Many people closely related to the industry are loosing their livelihood at a mind boggling rate. Whether you average 5 appraisals a month, or 100+, everyone is feeling the pinch. But especially interesting is the old saying "The bigger they are, the harder they fall", could not be more true in the current environment.
Those that have made $100K+ a year for more than a decade, are feeling the pain in ways never imagined only a few short years ago. Many felt bullet proof, but now the kryptonite market is nearly killing them. Now just like in politics, those that have made less will often fault those that made more with lines of "They are getting what they deserved". Well, everyone did not make their money unethically and not everyone is getting what they deserve.
There are many that have been crusaders for more than a decade for ethical business. There are many who have been able to stand up to the pressures provided by their clients. I am not only speaking of appraisers, but the loan officers and agents with high moral character that are also suffering. These people should be commended for their efforts. Instead, these same people who fought hard against abuses in the industry, and sacrificed additional business because of their moral foundations, are finding themselves on a slippery slope towards devastation.
How did this happen? There are several reasons. But for this thread, I want to try and stay focused on some specifics. I read in an article this morning that stated the following:
Regardless of who you are or where you work comes from, math is math. The business has slowed down back to December 2000 levels. But something else has changed since Dec 2000. The number of LO's, agents, builders and appraiser's is exponentially higher. I was unable to find exact figures for the number of each professional in 2000 vs. 2008, but I do know from reading various sources that the real estate industry accounted for much of the employment opportunities over the past 7-8 years.
This is simple supply and demand. There are now too many professionals fighting for the same piece of pie. But knowing the statistics does not soothe the pain. I know if many of you think like I do, my initial thoughts and the thoughts that have been haunting me for weeks now is "Where did I fail? How could a business model that provided for me and my family, completely evaporate?"
As I've pondered this question over and over in my mind with several sleepless nights now, I can say today with confidence, "I did not fail. A systematic failure in the mortgage markets has failed".
We have an entitlement belief system in our country today, from the bottom to the top. "Show me the money". That is all that seems to be important anymore.
From the AP earlier this week:
Quote: Fannie and Freddie entered the market for risky loans just as they emerged from accounting scandals. At the time, Wall Street giants such as Bear Stearns and Lehman Brothers Holdings Inc. were backing a growing share of ever-riskier loans, and both government-sponsored companies felt pressure to compete.
Freddie Mac wanted "to stay competitive in the market and take steps to preserve market share," spokesman Michael Cosgrove said.
Fannie Mae increased its purchases of liar mortgages "at the requests of many of our customers," according to spokesman Brian Faith.
Both companies also were able to use subprime and liar-loan investments to meet government-set affordable housing goals.
If the decision makers at the top can't prevail over the temptations and pressures, then how can we as appraisers at the bottom of the totem pole make a difference? Well, I've finally come to the conclusion that we can not. You CAN NOT change someone else's belief system. Rarely will a Republican and a Democrat convert one to the other party. Why? Their belief systems are different. Rarely can a Catholic convert a Baptist to Catholicism or vice versa. Why? Their belief systems.
I can continue for a year with belief systems we have in society and give example after example of how no matter how one tries, they will never change someone's belief system.
In our current mortgage crisis, there are home owners who BELIEVE they are entitled to a home. There are appraisers who BELIEVE, they are entitled to make a high wage earning living. There are appraisers who BELIEVE, that form filling is OK, because there are LO's who BELIEVE that is all that is needed. There are lenders who are OK with this, because they have FNMA/Freddie or FHA to sell their crap to, because FNMA and Freddie BELIEVE that having a higher stock portfolio supersedes common sense and logic.
So why in God's green earth should I BELIEVE that I can change all of those belief systems, especially when those pulling the real purse strings (the Govt) BELIEVES they are entitled to their positions and they BELIEVE giving the entitled public what they want will keep them there? Well, I don't anymore.
Growing up, my mother hung a little picture (you know, the country cross stitch style) over the toilet. So every morning from age 6-20, one of the first things I would read each day was the following:
"God grant me the serenity to accept the things I can not change, Courage to change the things I can, and the wisdom to know the difference"
While I never understood what any of that meant as a child, I understand it crystal clear as an adult. I was reminded of the Serenity prayer in a modern twist, shared to me in a story by my good pal Money Man earlier this week, that he had heard his preacher share.
"When I was a teenager, my family had a ski boat. One day, my brother was driving the boat, and was whipping me in circles around the outside of the boat. He continued to go faster and faster, so I was flying faster and faster. I was screaming for him to stop, all the way until I caught the front edge of my ski and hit the water so hard I was temporarily paralyzed. Today as an adult, I look back at that event when there are things I am struggling with. The entire time I was screaming at my brother to stop the boat, all I had to do is let go of the rope."
I feel like I've been identifying and screaming about the changes needed in the industry, all the while I've been getting faster and faster on my skis. Now that I can see this industry for what it is, it is time for me to stop yelling at the driver, take control, and let go of the rope.
I will continue to appraise what ever assignments come my way, but I will no longer grasp at the hope that some politician or organization is going to come riding in on a stallion and "fix" the industry. There are too many in the industry that don't believe there is anything to fix. I have chosen to seek a new full time career, so that I do not have to depend on this industry to provide for me and my family. I will continue to teach anyone who wants to learn, or assist anyone who needs help. I am not leaving. I've simply decided to have fun with the parts that I like, and take the much waisted energy that this system drains from my soul, and put it back where it belongs with my family.
The Serenity prayer makes sense to me: "Accept the things I can not change (people's belief systems) Courage to change the things I can (find a career where hard work, morals and perseverance is rewarded) And the wisdom to know the difference (it took me awhile, but the writing has been on the wall. I just needed some glasses to read it).
I wish the best of luck to all of you who are struggling and pray that you will find peace in what ever choices you make.
Kind regards,
John Holbrook
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