I mentioned in my last post that Robert Shiller's new book "The Subprime Solution" was very informative.  Shiller is convinced that one of the causes of the crisis was that many buyers of the loans did not get any objective financial planning advice.  Obviously that is true!  Although real estate agents and mortgage brokers are generally trying to help their clients, they undeniably have an incentive to complete a transaction!

 

One of the things Shiller recommends is that government find ways for everyone to get some basic financial planning advice from an unbiased advisor (that, for example, is paid by the hour and isn't "selling" investments).  While I don't think this will happen any time soon, why don't individual agents do their part by finding a financial planner who will provide some basic, affordable advice.  AND, just like we won't work with a prospective buyer who has not already been pre-approved (or at least pre-qualified), insist that the buyer go through a basic, financial advisory session BEFORE we will work with them?

 

What do you think?

 
Posted by Dean Vanderbilt on 01/05/2009 01:35 PM   Comments (4)  
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4 Comments on Help Buyers get Good Advice

JAN
05
2009
452,806 Points 81 Featured Posts Called Shot Master

Dean, I think the current market and economic situation will create many long-term changes in the way we conduct business. While past recessions have done little to cause change, the depth of this one and the accompanying agony should cause us to change many of the aspects of our business, most of which, I hope will be to our long term benefit.  Ultimately, though, I think the responsibility lies with the buyer.  It's probably unrealistic to expect others, especially those with a vested interest, to speak up when it may cost them a sale.
1:46pm • #1

Good idea. I use a couple people in-town here that are retired financial planners. They provide unbiased opinions and planning for a very reasonable cost. It seems to workout very well.
1:46pm • #2
509,738 Points 8 Featured Posts Outside Blog

Dean, I have been in the Mortgage Biz for a long time. I never stopped qualifying buyers/borrowers. We just changed the way we quailified people.  Most people I know that are true professionals in the industry did this as well. It was mostly the people in the busines for the quick buck that screwed it up. Never asking "would you be comfortable with that payment" Or the Brilliant minds that put fixed income people into options arms. 

there were no such thing as bad mortgages, just the wrong mortgage for the wrong person.  It is not rocket science... it is about our clients: NOT about our pay checks.

I may add, that I did say "no" to a few and lost some business along the way. But my reputation is solid, and I am still in the business after 20+ years, and most importantly, I can sleep at night knowing I did the righ thing.
1:49pm • #3

I think good, sound advice. I think one of the inherient problems with capitalism (although the best system) is that is based on everyone maximizing their financial opportunities --- which doesn't always reward looking out for the other person in the short run.
1:51pm • #4


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Dean Vanderbilt

Decatur, GA

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Dean Vanderbilt

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