Every morning I read "Lowe's Daily Real Estate News". It's full of articles, opinions and ideas, many of which are very useful. Yesterday I read an article by Scott Einbinder which I believe tells the story and offers solutions to today's Real Estate Problem.
Scott relates the subprime issue (brought about by 5% of the population defaulting on their mortgages) to the problem of non-professional, non-productive, poorly trained and even unethical agents that have placed the industry just below the perception of lawyers and used car salesmen. He urges a cleansing of our industry and suggests that now is the time to do it.
We are very passionate about our profession. We believe the standards we must meet are very similar to Attorneys and Investment Specialists and our liability is certainly up there too. We believe entry into our profession is much too easy and like many other professions those entering should have to apprentice for a specific period of time and have a set number of transactions on both the seller and buyer side before they are unleashed on the public. What do you think??
Check it out, http://rismedia.com/wp/2008-11-10/real-estates-bigger-subprime-problem/
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The mortgage industry has been plagued by inexperienced and poorly trained sales people as a result of regulatory greed. Most states hand out licenses to anyone who can say the word "mortgage". This is done for the revenue of the annual license fee that most states charge to become a "mortgage professional". I have been in this industry for over 24 years and have seen first hand the problems that have been caused by states handing out licenses to mortgage brokers who did not have the proper education nor experience, to advise anyone on what may impact the clients financial future for the rest of their lives. There should have been stricter guidelines and compliance to become a mortgage professional. The cleansing of the industry, unfortunately has come at a great price to all of us. Greed and fraudulence has been the biggest problem in real estate not subprime lending. Agents and brokers using the system to get stated loans approved knowing that the prospective borrower could not afford the payment. Also the biggest fraud of all committed to unsuspecting borrowers, is yield spread premium. If the borrower is qualified for the best interest rate, then why would any lending institution give brokers an opportunity to make more money on a client by giving him a higher rate and payment, other than pure greed. With the current economic turmoil going on today in the real estate industry, you would think that the Federal government would start realizing its mistakes of the past.