Housing Starts down. What does this mean to me?

Mortgage and Lending with self employed
I was reading in the Wall Street Journal today that Housing Starts were down much lower than they have been in the last two years. In layman's terms, the number of single-family homes that are currently being built has dropped considerably. Analyst's track this statistic by using the number of building permits that are taken out by contractors or builders in any given month. This can be seen as bad news, or good news, depending on your position. If you are a home owner who is looking to buy up by selling your current home first, before purchasing a new one, then it is very bad news because this statistic signifies a surplus of new homes on the market, which will surely drop the value of your current home before it is sold. Now, if you can hang on to your existing home, and buy the new one you want now, then you are sitting pretty my friend. It is currently a buyers market, and it is only going to get better in the months to come for home buyers. Unfortunately, a lot of people these days are motivated by a certain amount of greed. yes, I said it...Greed! Come on now, admit it, you know it's true. The housing market would not be in the shape it's in today if not for a bunch of greedy people trying to make a quick buck in a short period of time. Speculative buyers (who in most cases happen to be realtors themselves) play a big part in what's happening to property values now. A huge portion of blame goes to the mortgage industry as well. Yes, the consumer is the ultimate decision maker in any transaction, and we are all adults right? You should know what you are signing, especially when it comes to the most important documents most people will sign in their lives right? Wrong! We are the professionals, We are the consultants, We are the ones these people are trusting to give them advise. Too many people in this wonderful industry forget the golden rule: Fiduciary responsibility. To those of you who do not work in this industry, Fiduciary Responsibility is what all real estate and mortgage professionals are governed by. The responsibility to always do what is in the customers best interest. The Customers Best Interest. Let's talk about that for a moment. Is doing what the customer wants always in their best interest? I have talked to other loan originators who say, "The customer wants what the customer wants. And if I don't give it to them, then they will just go somewhere else and get it. So why not make the sale?" Why not? Why Not? I'll tell you why not, because it diminishes your integrity--all of our integrity as a whole Industry. That's Why Not. Sometimes we have to be the bad guys and say "I'm sorry Mr. & Mrs. Borrower, but I cannot in good conscience do this loan for you, you're going to have to rent for a while longer." I assure you that if more loan originators had done this in the last five years, we would not be in the predicament we are in today. Let me rephrase that: if there were severe consequences for agents who did not say this when they should have, we would not be in the predicament we are in today. Now I'm sure there is a real estate agent out there saying, "Everyone has the right to the American dream, Ernie!" Yes, I agree. Everyone does have the right to the American dream but it doesn't always have to be TODAY! A good loan agent, a good real estate agent for that matter, looks down the road for the client. Are you going to be able to sustain the payments that it will take to keep this house Mr. Borrower? Not just the minimum payments, but the real nut: the principle? Or at least the interest depending on your short term and long term goals? That is what a true agent does for his clients so that the American dream doesn't turn into the American nightmare like it has for so many people in the last two years. Are you in a Negative Amortization loan (a.k.a Neg Am)? Is your balance going up instead of down? We're going to discuss that next time. Thanks for reading. -Ernie

Comments (1)

Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

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Sep 12, 2016 11:42 PM