Housing Melt Down and the 60 minutes show

By
Mortgage and Lending with Corridor Mortgage Group; Inc NMLS# 208805

I read a post by Fred Thomas III; in which he spoke about how the Real Estate Industry and the Lending Industry seem to be taking the brunt of all this discourse over the number of foreclosures and defaults on mortgages. It has put us all in a situation that we feel like hanging our head in shame. I agree with Mr. Thomas III on a few key points:

  1. Real Estate Agents are the professionals with respect to showing people properties that fit there needs and their price range. It is not there job to handle the financing for a particular client; that is the job of the mortgage professional. My saying has always been "I sell loans and the Real Estate Agent sells houses". My reasoning for this is that I spend my entire day educating consumers on the various products and options that are available to them. I do not care about the difference between a colonial style house verses a split foyer; it is not my job. What is my job is to make sure that the property is valued properly and that the consumer knows all aspects of the financing package.
  2. Let me be clear about my thinking regarding mortgage products, as Mr. Thomas III spoke about earlier. There is no bad loan product (ARM's, Option ARM's, Fixed Rate Loan, etc). The mistake that was made is that loan originators and some banks allowed consumers to choose from all options when it was our responsibility to educate them as to why certain loans could be dangerous for them verses other more predictable loan products In other words certain loans are for specific consumer issues, they are not for everyone.
  3. But just as important as it is for loan originators, banks and Real Estate professionals to act responsibly; it is equally important for consumers to "READ" and understand what they are signing. If they do not understand they need to state that they don't and seek clarification until they do understand. Every Client must receive a copy of the Good Faith Estimate, which clearly outlines the total costs of the transaction and the amount of the monthly mortgage payment. Also the Truth-In-Lending; further informs the Client as to the numerical reality of the mortgage payment now and in the future. My point here is that the Client either choose to ignore these documents or more than likely was disillusioned into believing they could afford the payment.

I was listening to Joel Osteen on cable yesterday,  and he said something important; "If we keep speaking negativity, then that is what we will experience, but if we think, speak and act in the positive then that will become our reality" My point here is that there is still alot in this market to give us cause for hope, and this is what we must focus. Like:

  1. FHA Loan Limits are the hoghest they have ever been, which can help get rid of some of this excess inventory.
  2. Interest rates are dropping to an "All Time Low", therefore there are people who can afford a home and still get a good fixed rate.
  3. Most of the poeple who were in this industry for the "quick-buck" are now gone or soon will be, which is a good thing. We who are left will change this industry back to the respectability it and we deserve.

Comments (7)

Julie Chapman
DR Horton - Ormond Beach, FL
New Homes Sales Ormond, New Smyrna, Daytona Be

I watched Joel Osteen yesterday as well. 

Because real estate is local as are bad mortgage loans, what matters most to each of us is where these bad loans will fail.  Before 60 minutes had time to run their segment, my research for my area was already complete.  But I have 27 years experience in land acquisition, development, marketing and financing of real estate and my job is to make sure a product sells. And to demonstrate that point, my very small office did more transaction sides than any other in 2007 according to our MLS and we did zero short sales and zero bank owned sales. 

Many of the firms that have been in business for 25 and 30 years closed in my area.  I shifted my builder's products starting almost 2 years ago and we not only survived, I have a builder (who is 3rd generation in construction) who has more in escrow now than even  3 - 5 years ago when we were booming. 

Dec 15, 2008 04:11 AM
Connie Goodrich
Keller Williams Realty - McKinney, TX
CRS ABR (McKinney Realtor)Texas

I do believe the same as you on the points you made.  I also believe that the financial market did look the other way with unqualified buyers and made loans to many who had no business obtaining a loan for the level of purchase or any purchase, just Silly Loans is what I call them.  Now that is a thing of the past we do need to turn our attention to the positives that are present.  I always try when overviewing the market situation to others to incorporate positive aspects and end on a good note.  Perception becomes reality.

Dec 15, 2008 04:38 AM
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg Real Estate

It sounds like you took the comments personally as to what homeowners choose as a mortgage option.  They are going to choose the lowest payment everytime!  The lady that was the investor that said she didn't know what she was doing was just hogwash, she took the loans to make future money and her guess turned out to be wrong!  So now, she'll say she didn't understand to shift the blame onto someone/something else.  She gambled as a bad business investment and came up flat.  One roll of the dice and she lost, same with the other homeowners.  Can't anyone take any responsibility!

Dec 15, 2008 04:43 AM
The Trumm Team Omaha Homes for Sale, Real Estate
Keller Williams Greater Omaha - Omaha, NE

 

Welcome to ActiveRain!

If you would like a few tips on getting the most out of ActiveRain, please visit my blog Welcome to Active Rain.  It has a few simple steps of what to do now that you have joined.

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Dec 15, 2008 07:26 AM
Everard Korthals
---Preferred Lifestyle Advisors--- - Lancaster, PA
Mountain Realty

Welcome to Active Rain. This is a great place to learn and share with others. IF ever you were to have any questions then feel free to contact us and we'll try to help. Please take a look at our blog for links to valuable information in our sidebar that you can use to navigate this extensive network. Subscribing to our blog is also a great way to read our blog straight from your home pages. We also suggest taking a look at the Active Rain Wikipedia group for resources that may be valuable to you. We hope you have a great day in the Rain! All The Best-

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Dec 15, 2008 09:08 PM
Sasha Miletic - Windsor Real Estate
RE/MAX Preferred Realty Ltd. - Windsor, ON

Hi Steven, Welcome to AR, Be a Blogholic and start writing your own blog soon on AR. All the best for your RE business. This is the right place for customers, friends, realtionships etc.

Best - Sash

Dec 15, 2008 11:54 PM
Morris Childs
PEP source - Spartanburg, SC

Welcome to Active Rain. It just gets easier after your first blog. Just write about what interests you.

Dec 17, 2008 01:55 PM