Who's Fault is this lending and foreclosure mess???

By
Real Estate Broker/Owner with Nevada Perfect Homes B.58356 PM.163860

I really want to hear from you all regarding this post, please give me your two cents...

Ok, so... Who is at fault for this mess??? There are multiple winners in my book...

  1. Wall Street - For buying loans that did not make any fiscal math... Ok, it did because the loan was originated, then sold, them sold again, then sold again... Until the loan reached the end servicer who used peoples pension funds and 401K funds to purchase the discounted loans at rock bottom prices.
  2. The Actual Lenders - Our favorite villain the people that made all the loans that had no qualifications, no standards, and teaser rates to die for. They did not care what happened as long as they could sell the loans to Fannie Mae, Freddie Mac, or some other greedy investor.
  3. The Loan Agents - These people are EVIL in my humble opinion. The goal of these wonderful people were to drive there own commissions higher and higher. The Lenders were offering big bonuses for every high risk loan they originated. That's right the actual loan agents were given more money in their pockets if they gave their clients BAD SERVICE and put them in high risk loans because they couple be sold for more money and more times.
  4. The Builders - Sold to anyone that would pay their high prices and increase the stock holder profits. Almost no builders gave a half of a seconds thought about the fact they were selling to investors and no one was moving into the areas to create active vital neighborhoods.
  5. Home Investors - The sharks were in the pool and tossing chum in the water as fast as they could... It did not mater as long as they could flip the house for a fast profit, and that drove up the prices past the real level and now homes can not be sold for what they were purchased at.
  6. The Clients Themselves - There was so much greed that the home buyers were ready to take anything to get a taste of the American dream... Well they got the American nightmare...

You notice anything missing here??? That's right the REALTORS are just as much to blame if not most. How many agents bothered to take the time and talk to their clients and explain these loans and what they meant? How many agents told their clients that the home was priced well above the buyers ability to pay? How many agents told their clients that the home prices had been climbing and climbing and climbing and that what ever goes up, MUST come down???

I can take great pride in the fact that out of all the transactions I did in the last five years that I only had one client... Count it ONE (1) client lose a home to foreclosure... This is because I took the time and stood by my ethics and disclosed EVERYTHING... The one client that did lose the home purchased a home for $200,000 higher then they said they originally wanted and took an INSANE loan, both issues I told them not to do and they did anyhow.

I say look back at this mess and ask yourself, how much of this is YOUR FAULT??? And then change that in the future...

Comments (5)

Doreen McPherson
Homesmart ~ Scottsdale ~ Tempe - Tempe, AZ
Phoenix Arizona Real Estate ~

I was not a REALTOR at that time and I am thankful.  I think I would have been overwhelmed by that behavior and quit.  I have spoken to people who lost clients because they would not play the game. 

Sep 06, 2008 09:11 PM
Chip Jefferson
Gibbs Realty and Auction Company - Columbia, SC

I closed about 8 Million in stated product so I know some of its mine. BUt to my knowledge all of those buyers are still in there homes.

Sep 06, 2008 10:44 PM
Dennis Swartz
Full Circle Property Management - Columbus, OH
MBA, GRI...experience counts!

I held out for as long as I could, but caved at the end so I know a couple of them are mine. Sorry to everyone.

Sep 06, 2008 10:50 PM
Charlie Ragonesi
AllMountainRealty.com - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros

Let me tell you it amazed me how many clients got loans. ! when I sent them to legit mortgage people they did not go. The went to these sub primes etc. When I told them wher they would be in 3 years they said don't worry I can refinance. So you know what we made the deals. My conscience as a Realtor is 100 percent clear. In fact there are deals I lost because folks went to other places because I councilling prudence. I now have a chance to sell their homes in foreclosure. IF NO ONE WOULD GIVE THEM THE MONEY then this would not have happened. Follow the money  it is that simple

Sep 07, 2008 12:36 AM
Daniel J. Brudnok, REALTOR
Berkshire Hathaway Home Services Fox & Roach, REALTORS - Exton - PA License #RS-225179-L / Delaware License #RS-0025038 - Downingtown, PA
SRES, e-PRO,ABR,GREEN,CSP

Richard,

I have maintained it started with the Lenders....they got greedy and when the competition they took advantage of the loose pockets on Wall Street and in the regulatory agencies to make money.  NOW they are crying they are in trouble if they ere too slow to move the money out of their portfolio.

The Brokers took their steps (the bad ones) and made the situation even worth. 

My wife was a Broker and we spent more time talking people out of the low start and crazy adjustable programs that we knew were not for the average Joe.....still after hours of conversation, those who choose to take these programs and were hit with the big payment increases......still made her the first call......CRAZY.

Thanks too for supporting my post.

Sep 07, 2008 06:40 AM