NAR has NO SHAME! (Et tu, Brute?)

In my featured blog entry a couple of days ago - Ten Take Aways from the NAR 2008 Annual Convention - a number of commenters blasted me for this entry:

6. Every REALTOR owes Bank of America a big apology. In fact, we owe it to every bank and mortgage vendor who underwrote the bulk of the events, including the Bank of America night out at Universal Studios. We should be ashamed of ourselves for accepting their money after we just spent the better half of the last decade demonizing banks as “trying to put us out of business.” .......... Still, someone should have stood up at the opening session and did an honest “mea culpa.” It’s easy to argue for protectionism when the market is lining your pocket with easy pickings; but REALTORS have some gall showing up with their hats out when it’s the other end of the market.

I was told in "no uncertain terms" by some readers that the banks "needed" the REALTORS, and that all of the current housing crisis was "the banks fault." Nobody bothered to mention the FACTS - like how Bank of America didn't get into subprime lending - it's CEO Jamie Dimon was and is way too smart for that. And nobody mentioned the Community Reinvestment Act or the cheap Fed money (through artificially low inflation) or even how FANNIE AND FREDDIE were politically motivated, UNREGULATED lenders who "strong armed" banks into lending to "sub" prime or marginal borrowers or "else" not get a bank branch in certain neighborhoods. It's clear in everybody - BUT REALTORS?? - that Fannie and Freddie poured fuel on the fire- backed up by taxpayer money to the tune of what will be more than a trillion bailout dollars, most likely.

Last week, at their Convention, NAR TOOK BANK OF AMERICA'S MONEY - and that of Wells Fargo and plenty of other banks and mortgage companies. LOTS OF IT. Can you imagine what their HUGE booths cost? Can you guess at what it cost to underwrite the Universal Studios night out? No problem with banks being "in" real estate there, was there?

Now, today, NAR's "CALL TO ACTION" email arrives in my Inbox. It encourages me to send my "support" of the Four Point Stimulous Plan to my Congressman and Senator. Here are the four points, right from their site:

NAR has urged Congress to include the following provisions in any future legislation:

• Make the $7500 tax credit available to all purchasers and eliminate the repayment requirement.  The credit’s limited availability and required repayment terms have severely limited the credit’s appeal to potential homebuyers.  As a result, the credit has not been widely used or proven effective at stimulating sales. 
  
• Make the 2008 FHA, Fannie Mae and Freddie Mac loan limits permanent.  New rules for 2009 would significantly reduce the FHA, Fannie Mae and Freddie Mac loan limit from their 2008 levels. Now is not the time to limit the availability of affordable mortgages. 
  
• Get the Emergency Treasury bank relief program back on track by targeting more funds to mortgage relief efforts and increasing efforts to mitigate foreclosures.  Don't just give the banks unrestricted cash. Make the program work to improve mortgage and housing markets as it was originally intended.
  
• Permanently bar banks and banking conglomerates from engaging in real estate brokerage and management.  The banks have proven they have enough to do to simply properly manage their current lines of business.  Do we really want them to manage on the home buying process?  Imagine what could have been the situation now if they already had the added ability to engage in real estate sales.

 

So, let's see if I can interpret:

1. NAR wants to give MORE TAXPAYER MONEY to MORE UNQUALIFIED BUYERS. This means the neighbors who saved their pennies to put down their $7500 or more will simply have their tax money given - WITH NO PAYBACK - to their new neighbors who really can't afford the home. Why is this a good idea? Why are SOME PEOPLE supposed to play by the rules and others NOT? Why is it ok to send SOME people's tax money to OTHERS who have not earned it?

2. NAR wants to RE-INFLATE the bubble by letting Fannie and Freddie now cover EVEN HIGHER LIMITS. As if the limits they already screwed up on were not enough to plunge the finance markets into disarray. NAR says "now is not the time to limit the availability of affordable mortgages" but what it's really saying is "Now is not the time to push more people into HIGHER LEVELS of debt."

Does NAR READ THE NEWS? Like this story from the Wall Street Journal yesterday:

Freddie Mac said it will need a $13.8 billion cash infusion from the U.S. Treasury as losses stemming from home-mortgage defaults surge and its future role in the housing market becomes cloudier.

3. NAR is against foreclosures??? How can an industry that is supposed to value home ownership, property rights and contracts be AGAINST foreclosures? Do only "buyers" get rights? Apparently the rights of the banks who own the homes - and have the right to be repaid - do not count. Foreclosures are the necessary and full-justice method of a market to reset itself. Putting the day of reckoning off isn't going to help anyone - not even NAR's members. And encouraging Congress to take any steps that abrogate contracts - between borrowers and banks - is very reckless.

4. NOW THIS ONE REALLLY MAKES ME MAD! As a businessman in general. How can NAR have JUST TAKEN HUNDREDS OF THOUSANDS (millions?) of dollars from Banks at our trade show and then walked right up to Capital Hill and said, "These guys are our enemies! Don't let them into our industry!" The call for proptectionist laws is made solely on rumor and supposition. There is NO EVIDENCE - only innuendo - that the banks "can barely manage their own current lines of business." It's more shocking because such an approach to the "competition" violates NAR's own Code of Ethics?

Article 15
REALTORS® shall not knowingly or recklessly make false or misleading statements about competitors, their businesses, or their business practices.

Guess that is only an "ethics for other REALTORS"?

Maybe the CONSUMER would prefer to have the bank manage the home buying process - and we can't really control that, can we?  Not unless we use the POWER of the government to BAR (by force, let's just be clear) our competitors from offering consumers what might be a BETTER DEAL?

How can we walk around the convention saying, "Real estate provides choices to REALTORS - to affilliate with different companies, to use different clever ideas and technologies to compete - but that all stops at the FRONT DOOR? Is NAR a trade association - or a UNION? I couldn't even carry in my own BOX into the trade show without some Friedman bullies coming up and saying that had to be "done by the union guys!" Now we're doing the very same thing to our "partners"?

We should all hang our heads in shame. If you want to be "against" banks, that's great. But don't eat their food, don't take their gifts, and don't take their sponsorship money. Sure, I wish banks would wake up and stop shooting themselves with their own sponsorships. But are we really so bold - so unethical - as to act like this as an industry?

Why is it that the Code of Ethics asks us to conduct ourselves at the highest levels of standards and performance - but we then advocate the complete opposite: Consumers don't have to repay other taxpayers' money; Consumers aren't responsible for the loans they take; Govnerment agencies without regulation, causing consumers HARM by encouraging borrowing beyond their means; and pure protectionism, using the force of law to bar competitors from entering real estate.

Why does NAR want to CAUSE another IRRESPONSIBLE HOUSING BUBBLE - and alienate its banker friends at the same time? Is this the BEST answer they can come up with? Or, is it just that the $7500 tax credit is "oddly" similar to the average commission to most of its members.....?

One of these days, what goes around is going to come around. Imagine how awful the convention will be next year when the only people who show up at the trade show floor are the jewelry and back massage booths. Once banks and mortgage companies start to figure out that they are paying their own attackers, they're going to get smart. All it takes is one CEO like Bank of America's Jamie Dimon to say - Hey! We have a few friends in Congress, too. Maybe it's time to call in a few favors.

How Sad.