The the U.S. House of Representatives Committee on the Judiciary, Subcommittee on Commercial and Administrative Law holds a hearing today. The subject of the hearing is the “Growing Mortgage Foreclosure Crisis: Identifying Solutions and Dispelling Myths” and the new bankruptcy bill is on the agenda.
The Mortgage Bankers Association (MBA) has an agenda and their agenda is to protect and promote the banking industry. It’s amazing to me that this organization is even allowed to participate in these hearings and it’s quite sickening that they are involved in the clean up of the toxic mess that they had a large part in creating.
Yesterday they issued a press release, in which David G. Kittle, CMB Chairman-Elect of the Mortgage Bankers Association that calls a recent report by the Center for Responsible Lending on loan modification and bankruptcy reform misleading.
CRL’s stubborn insistence on clinging to ‘loan modification’ as the only means by which a lender can help a borrower in trouble only serves to further mislead policymakers into overreaction. Repayment plans, forbearance and even short sales are all widely accepted ways of helping a consumer avoid foreclosure. And yet CRL ignores them, because including them would better demonstrate the vast efforts lenders make.
Don’t forget that every one of these witness’s testifying today will have their own agenda that they are fighting for and the Mortgage Banker Association is here for the banks, not the people. No matter what they do or say. Do not trust a word that comes from the bankers camp.
They would throw your grandma under the bus as they foreclose on her home and kick her to the curb in a heart beat. They are not the consumers friend and they are not your grandmas friend.
Make no mistake about it; we are an organization dedicated to helping our members do their business. We actively advocate for our members, and have done so for nearly a century. We have seen the real estate finance industry evolve into one of the strongest and most sophisticated of global markets.
That truly says it all. They sure do not advocate for consumers and homeowners. They advocate for their members. They promote homeownership so they can make more loans and line their fat, silk lined pockets. Period, end of story.
About the Center of Responsible Lending (CRL):
The Center for Responsible Lending is a nonprofit, nonpartisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices. CRL is affiliated with Self-Help, one of the nation’s largest community development financial institutions.
I don’t know about you, but it looks like to me that the CRL’s agenda is on the side of the consumer and homeowner. They are a non-profit organization that is working to eliminate abusive financial practices. This explains exactly why the Mortgage Bankers Association is going out of their way to discredit the Center of Responsible Lending.
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I think I like Poppy’s take on this better with her “These Loans Were Destined to Fail” posting. She’s calling for lenders and homeowners to work together in mutual interest, which makes sense (foreclosure means loss for the borrower and the lender). This post is more evil lenders talk. “It’s amazing to me that this organization is even allowed to participate in these hearings…” Not very productive towards meeting mutual interests if you don’t invite one party to the table.
The banks suggestion that short sales are a good way of helping borrowers avoid foreclosure makes sense. For some borrowers a loan modification will leave them with another mortgage they can’t afford, so a short sale is a good option. I’m not saying the lenders are doing a wonderful job getting their act together to work with distressed borrowers, but I believe they recognize it is in their interest to do so. Yes the MBA admits they are looking out for their members’ interests. That’s what the organization was created for. But since their interests coincide with the borrowers….. I’m not saying trust them or take everything they say at face value, but I’m saying listen to them and evaluate what they say on its merits.
Now that I’ve defended the MBA, it’s time to trash them. Their mission statement:
“The Mortgage Bankers Association seeks to create an environment that enables its members to invest in communities and achieve their business objectives. The association creates this environment by developing innovative business tools, educating and training industry professionals, providing a gathering place for the sharing of ideas, acting as the industry’s voice on legislative and regulatory issues, and developing open and fair standards and practices for the industry.”
They let down their members. Failures include:
1) Achieve business objectives: like massive foreclosures that are crippling the industry
2) Invest in communities: communities are getting wiped out
3) Training industry professionals: it would take a whole post to cover everything that went wrong here
4) Industry voice on regulatory issues: like suggesting that underwriting standards should exist
5) And developing open and fair standards and practices for the industry: won’t bother elaborating here either. I’ll get too worked up.
Given the high ideals they outlined in their mission, it is clear they failed miserably.
One of the biggest failures, I think, was the rush to get on board with low-doc and no-doc loans, as well as get people into homes they ultimately couldn’t afford with ARMs by dangling ridiculous teaser rates. While this might promote big business profits in the long run, the loans were too risky (obviously). Responsible lending, and an organization that works to protect its members and encourage good business practices, would be a good thing. As Al points, the MBA failed miserably. Mortgage lenders should have verified income, and also made sure that borrowers could pay back the higher reset rates. Period.
I don’t comment to these posts on all the forms I read (seemingly all day long lately), but I felt I needed to put in my brief 2 cents on this one. While I respect your view that the Mortgage Bankers Association is the Big Bad Wolf in this whole mess, I must disagree a bit.
First, while I am not a member of the MBA, I want to disclose that I have been a speaker for the organization on the topic of Quality Control / Quality Assurance. I do know many of their members, as well as many of their leaders—mostly CA. That said, I know personally that the members are not interested in “Screwing” consumers or kicking Grandma to the curb as roundly suggested. While there are greedy, self-interested, and even criminal players in the mortgage industry, I’d hesitate to paint the MBA as even closely dominated by persons with such motives. Plainly wrong.
Your basis for argument that they shouldn’t be involved in the “solutions” or “what to do now” phase of the hearings in Washington rests on an assertion that the CRL is non-partisan and consumer-only based. Sounds nice. But I’ve been around just long enough to know that nobody’s completely “non-partisan” or disinterested in Washington. Everyone has an agenda, and while you may like one organization’s agenda more than another’s, to suggest that good can only come from the CRL is a bit optimistic at best.
When it comes down to it, the MBA needs a place at the table. It’s their industry–and their members tend to be the most capable of keeping the dream of home-ownership a reality—assuming that’s the goal we’re all in favor of. If I had to place a bet as to who has consumer’s best interest in mind I’d put my money behind the MBA before I would put it behind say the Mortgage Brokers (NAMB) or even the CRL for that matter. Not to say that either of those two organizations are “bad”, just my opinion. Let’s not forget that it’s their money (MBA member companies) we want access to we can keep mortgage loans available. If you swoop in with some third party new organization on the coat-tails of public opinion, chances are that while some good will come out of new policy, a lot of negatives may also result from overreaching or knee-jerk reactionary policy that will ultimately hurt the very consumers you are trying to help.
On the charge or goals of the MBA’s agenda…Not certain that consumers, or guaranteeing that they won’t be foreclosed on, should really be the only criteria used to judge their merits. After all, it paints “consumers” as helpless and violated when they may be far from…Some are. Others are definitely the type that gamble their retirement checks at Indian Casinos, or lease those expensive lifestyles they felt were a “right”. Should Grandma be able to keep that house she refinanced at 125% to pay for her cruises to Hawaii or her “pretty” things, and now can’t cover her payments with her monthly social security check? I’m not sure I can say for certain. It is convenient to paint her in “helpless victim” status when you want to use her to promote your agenda though…
Look, there’s enough blame to go around everywhere–I’m not delusional–I just think that unless you want to see secondary market financing evaporate like it did in August 2007 (which effectively halted all mortgage financing even for Prime borrowers), the MBA should at least be able to offer their solutions along with everyone else that has a horse in the race. I still think that giving consumers a choice when it comes to their futures is a lot better than forcing them into state mandated programs that are run by politicians—or the likes of Ralph Nader types…Just my two cents.
Everyone wants to really complicate this whole mess on why we are in the crisis we are in currently in the mortgage industry. The blames is shared by all in reality. Everything smelled like roses as long as we were all making insane amounts of money.
What happened is simple. Wall Street and the Execs at all the lenders got greedy and started looking for ways to originate more subprime loans. So they came up with 100% financing on “No Income” Loans. They came up with Neg Am loans where a borrower can pay less than the interest on a loan that is until it resets.
That is it in a nutshell. I don’t know the figures but I would venture to say that more than 75% of the loans that are defaulting now fall into one of the categories I mentioned above. Those were just bad loans that were being issued because at the time Wall Street was buying everything and anything so that they could make loads of money.
Hopefully lesson learned. Now we need the correction to happen unfortunately. Anything we do now is only postponing the inevitable. The correction needs to happen and the sooner we let the sooner all of us can get back to making money hopefully in a more sensible way.
We all seem to agree that not documenting borrowers’ income helped create the problem. Interesting, then, that neither congress nor the Fed has yet mandated that borrowers’ reasonable ability to pay be documented. Barney Frank’s HR3915 seems to have done that, but it’s only passed the House. The Fed’s 12/18/07 proposed rules …
http://www.federalreserve.gov/newsevents/press/bcreg/20071218a.htm
only require documentation of ability to pay on so-called “higher-priced” loans (which are practically non-existent), thereby leaving open the ability to do stated-income Option ARMs.
First rule of holes: when in one, stop digging. People should be required to be able to pay their loans, since we’re now discovering that when they can’t, we all get hurt.
When people say, “we need to let the correction of the market happen” I personally, on a realistic level would like to know what allowing that correction to happen will entail.
Will it be people being forced out of their homes, children displaced, bankruptcy filings and the creation of a new class of working poor?
If that is the correction people are saying needs to happen, no, I don’t think that needs to happen.
I think that the market can be allowed to correct itself while also buffetting the American families from being devestated by the loss of their homes.
Security, after all, is a basic need for every human being.
Owen: “People should be required to be able to pay their loans,”
How can you require a person to be able?
Either they’re able to or they’re not.
“Interesting, then, that neither congress nor the Fed has yet mandated that borrowers’ reasonable ability to pay be documented.”
I agree that this should be mandated, but you have an interesting way with words. Who are you putting the onus on, the borrower to document their ability to pay or the LOs?
In many cases the income was presented and it was the mortgage professional who went stated anyway — that seems to have been where the money was.
This mortgage situation is deeper seeded than everyone realizes. First you had Enron, well that was a drop in the hat compared to the havoc of dishonest individuals on every level of the mortgage industry. Even the Ma and Pa mortgage brokers got into it. WAMU and First American are named in a lawsuit file by the NY Attorney General due to appraisal fraud. It basically says our society does not have ethics it used to. That is what we should be concerned about.
Everyone wanted to beat the system, from the homeowners to the traders on Wall Street who put the bundled packages together for sale. I saw fraud on many levels, payoffs to employees, it was sickening.
I have worked in this industry almost 40 years, and cannot believe what has happened. However, since I was always above board, my conscience is clear. Course jobwise it is not that great, but other than that, I am glad this came out, it could not continue as it was. I am just surprised it took so long.
The MBA probably didn’t help, but for the record in the 1980s they were very involved with education, and if you go to their site today, there are many courses to take. I took their “underwriting” correspondence course, and it was very informative.
RC’s post is the most level headed and sensible post Ihave seen in sometime. Please take the time to read it.
I wonder sometimes if Moe is truly that disconnected or just enjoys seeing the resulting posts that occur with these type statements.
As a homeowner and not someone in the industry I don’t know the ins and outs of the acronyms. But what I can tell you is this. Buying a home is an investment, at least that’s what most folks tend to think; and if the Mortgage Bankers Association gets a seat at the table, be it good or bad, I hope they realize that in order for “Granny to borrow that 125% and lease her lavish lifestyle” the premise that the ‘helpless victim’ is under is that there debt is reasonably secured by the value of the asset.
In the here in now, unless you’ve been living under a rock, this is no longer the case. Just because a home generally carries a 30-year mortgage doesn’t mean everyone’s on a 30-year plan. As a guy who entered the market on the five-year plan, now looking at a perfect credit score going straight into the crapper (by the way as a military guy who has spent 4 of the last 7 years deployed overseas – that ain’t real easy to pull off) – I wish I’d have played the ‘greedy granny’ role when I refinanced (just for a better rate/no cash. At least I’d have something to show for this debt pool – even if it were a disposable cruise to Hawaii – or some ‘pretty things’.
Unfortunately, I lack the background to address the issue but Moe generally tends to be a straight shooter.
The ‘industry’ IMHO needs to take responsibility for all of this ficticious equity they artificially created.
Those are my two cents.
Here’s a novel idea from an outsider. In a foreclosure proceeding, assuming the market is always going to creep up slowly – should the market value of the home (when foreclosed) be less than the loan value at 100% LTV of the appraised value when funded – any deficiency judgement cannot be for more than the current fair market vale. Since the market should always rise, even if only gradually and with inflation, lending institutions shouldn’t be real opposed to such a thing. It might even promote an idea formerly known as business ethics – in fact I think this should be retro-actively instated as to a year or so ago. Maybe there’s a seat at this table for me, but that would probably be a conflict of interest as well.
Additionally, even folks not having problems and paying their loans on time without the need for a modifications – are now going to be SLAVES to their homes and loans. They can’t get out or move if they want to in some cases. Now markets always go through cyclical changes due to natural disasters or other business related ventures such as large geographical employment centers, etc. Nonetheless, this market failure was engineered by the folks manipulating the market – quite a different ballgame.
I hope some good comes of this and folks can get their head out of the clouds and look at the real issues – and not just see the extreme cases of idiocy in this mess we’ve seen in some of the news stories. There are real people with real problems in this mess, and many of them haven’t even figured it out yet. Give them time and another 20% depreciation, in California my guess is that’s about a year from now.
I got my tax assessment papers today — my property has depreciated 50K below what it was appraised for to get me refi.
That’s going to be everyone’s issue, whether you need a mod or not, if you’re life changes and you need/want/would even like to move that’s not an option because you’ve become an indentured servant to your loan service (I don’t want to say lender b/c I don’t think any of us actually have one of those). You could have a perfectly affordable loan, even a cheap one if your income grows, but you wont see this artificially injected equity reappear for a long time.
At the rate the market is going down the tubes, unless someone comes up with solutions – dumping now (while prices have only begun to drop) will result in less of a deficiency judgement should that apply. I don’t think we’re near the bottom. You don’t have to have a PhD in mathematics to figure that out. Not that I’m suggesting anyone should do that without looking deeply into it.
One of the main components that are still prevalent to this debacle exists. Greed. Everyone look back in their history books. This is a cycle that has repeated itself before. As a solution evolves from loan modifications, foreclosure, people just walking away from there homes, i.e., things will naturally tighten up. Unfortunately the pinch will hurt many.
The powers that be will systemically make money even during this recession or depression or whatever you want to call it at the cost of the consumer. Now its real estate, tomorrow it will be something else. The consumer is the Ginny Pig each and every time. Education and accountability solves that.
If little ole granny “knew” what was happening, she shouldn’t keep her home if she did all of that and can’t make her payments, but even if the loan was free of charge, little ole granny should not have been given that loan either………….even if she knew.
By the way grannies are coming in ages from 29 and up now. Grannies aren’t that old anymore. Lack of education is the result of foolishness like this
There is a segway between what the borrower wants and what the borrower needs. Then, there is a segway between what the L.O. should be doing and what he/she shouldn’t be. It’s that segway where right and wrong gets lost every time.
JacMac
Don’t feel too bad, in Atlanta, property values are dropping in the hundreds of thousands. This “catastrophe” happening here is by design. None of this is a fluke. Follow the C-A-S-H and you’ll see who’s controlling the market and its outcome. It’s a pimpish move to say the least but in the end watch from the bushes emerges the cash heavy investor gobbling up everyone’s property for dirt cheap selling it back to us like we are at a pawn shop. Remember my “blue dust” theory?
Chris…..great post….
I can’t help myself and this information is given with the utmost respect……
the correct spelling of words in your post are: cognizant/ladder/counsel…..
“you will be attackED for your comments before the day is over”,,
Have you ever looked at a Amortization Schedule on a 30 year fixed mortgage? This is why people are walking away from this nonsense
People move every 3 to 4 years, and it takes 8 years to make a dent in the mortgage. The greedy banks set this up so they get paid FIRST, not the person with the mortgage. We dont have the time to pay on a mortgage for 15 years, especially if it’s adjustable rate, so we can sell the house and break even.
It was a feeding freezy, the industry snowballed out of control. Too easy, too fast, too much. Everyone made a killing, now it’s time to feel the pain.
If you put all the people in jail who were involved in this nonsense, for the first time in history they’d be more white people in jail than black…………… wait that’s not possible
If you want to put people in Jail..don’t forget to include the mortgage brokers FIRST-why? Because as a realtor my job is to send the buyers to a mortgage broker who is suppose to QUALIFY them for a mortgage based on what they could AFFORD..and yes..there are good brokers out there who do that..but many looked at buyers as their next BMW payment. So brokers did not do the best for the buyers but instead looked at the programs that paid THEM the most amount of money on loan(The legal bribe). Even if the person could have qualified for a fixed they put them in a ARM! Because the YSP paid more!! Then the process snowballed from there. Most brokers learn after time how to make the file pass. The learn the weaknesses in the system of the lender and use it against them. I am happy tha wholesale channels are diminishing or being tightened for brokers. They have gotten away with too much in the past.
Yes there should be some recourse from just walking away from the loan and there is…the buyers credit will be damaged!..But hey for how long?..Before you know it lenders will be back tooting to buyers 1-3 years out of foreclosure and the MORTGAGE BROKERS will be at it again..getting paid high commissions for puting these people back in to homes! THE CYCLE CONTINUES>>>
Ann,
As a realtor, you shouldn’t be attacking mortgage brokers as a group. Realtors have been cheerleading the run up in house prices as much as anyone. It’s always the right time to buy according to the NAR because prices always go up. If you don’t buy now you’ll get priced out of the market. All sorts of this drivel came out of realtors’ mouths designed to run up prices to get more out of that 6%. Greed, greed, greed. I’m guessing you’re angry about the bad situation because of how it affects you. An attack on brokers probably makes you feel better because you can minimize your own fault in the matter. If realtors don’t accept their own screw ups and the greed that bred it, then they can kiss whatever scraps of credibility they have left good bye.
http://en.wikipedia.org/wiki/Due_diligence
As a concept in civil litigation
Due diligence in civil litigation (also known as due care) is the effort made by an ordinarily prudent or reasonable party to avoid harm to another party. Failure to make this effort may be considered negligence. This is conceptually distinct from investigative due diligence, involving a general obligation to meet a standard of behaviour. Quite often a contract will specify that a party is required to provide due diligence.
Realtors?? Credibility??
Those 2 words should never be used in the same sentence!! Why is anyone even using realtors and paying 6% commission when there are so many “Cash Back Realtors” who will give you, the buyer 2% back at the closing table??
Do your homework people!! Realtors are not protecting your interests, even though they DO HAVE a fiduciary relationship with you!! WHAT A JOKE!!
You are kidding yourself if you think a realtor is taking your interest to heart! They are just as greedy as the next broker. I can’t begin to count the number of realtors that have pulled loans from my company because “their” borrower did not qualify for the home the realtor wanted to sell them.
I have also had realtors produce false SS cards, W2s and check stubs! So don’t try to tell me how ethical/credible you are as a realtor!
I had many reltors yelling at me and treath me because I told them the borrower didn’t quaalify and they end up taking them elsewere.
Guess what ??? those people are facing foreclosure now !!!
Thank You Realltor !!!
Okay here’s my two cents, everyone is right.
There are many contributors to this problem as has been said over and over, but here’s the thing, if anyone who participates in the loan origination process, from the brokers who supposedly qualify the lenders for the loans to the Wall Street investors who provide a demand for the type of loan, to the banks who create the products being offered — if any single one of these groups escapes accountability for their wrong doing, this leaves an open door for the massive — and I mean massive FRAUD to continue.
All of us, individually, collectively on the whole can only be responsible for what WE do wrong.
Let me give you a little illustration. My daughter came home upset. A boy in her school was playing with another boy and held him down in an awkward position that kept him from breathing. He pleaded to be let go but the boy didn’t let up. Finally he did and went off happilly to play basketball.
When the injured boy recovered his breath, he went off after the boy playing basketball in a rage. The school teachers seeing this (but of course failing to see the original injury) wrestled with the boy to the point that they had to handcuff him to subdue him.
My daughter said it was so sad, she was almost in tears.
I asked her why.
She said because he was the one that had been hurt by the other boy but they put him in handcuffs.
I asked her: “Did you say anything?”
She said, “Well, everyone was yelling to let him go.”
I laughed and said, “Didn’t you hear my question, I asked: Did YOU say anything.”
She said, “Well the teachers did eventually go get the boy from the basketball court to ask what happened.”
I said: “I didn’t ask you what happened I asked you if YOU said anything.”
So she blushed and said, “No.”
So I asked, “Why?”
She was silent and so I took the opportunity to explain to her about the Bystander Effect. It’s this crazy psychological phenomenon where the more people there are witnessing a crime or a heinous act, the less possibility there is that anyone will do anything.
You see, everyone is thinking THE OTHER PERSON will do something about it, so they don’t have to.
The phenomenon was coined when in 1967 Kitty Genovese was attacked and screamed for help FOR THIRTY MINUTES. Thirty-eight people watched from their UPSTAIRS APARTMENT windows AND DID NOTHING.
Finally one person called 911 and the police arrived in two minutes.
So here’s the moral of this story. ALL OF THE OFFENDING PARTIES NEED TO BE HELD ACCOUNTABLE.
BUYERS: Get educated. Do what you can to save your homes. If you can’t do so, save your credit and your livelihood. That’s right, I said it, Leave the homes to the hands of the banks who should have known better.
Don’t listen to those who want to talk about responsibility to pay debts, this is business. Half of you guys were swindled and you didn’t even know it. You bought a house that wasn’t worth what they said it was, and the person handing you the keys had given you a bag with a hole in it to carry the debti.
Soon the equity and your hard earn money started leaking through the bag, and now you’re supposed to fix it, because you should have looked at the bag closer. Okay, maybe you should have, but if you can’t carry the load without the bag, what are you gonna do? You got to leave the crap on the corner and move on. The BANKS who have an interest in the house, will come by and clean up the mess. They have no choice because no one else will do it for them. It’s their house after all. They’re not afraid to let you know that if you ever stop paying the mortgage.
MORTGAGE BROKERS: Get some integrity. If you have it, then you don’t need it. You know who you are. Stop making excuses and playing the blame game. It’s time to pay the piper, and you’ve made enough of a profit to do so — unless you were also caught up in the debt cycle, then you have nothing left. Drug dealers go straight to jail. They don’t get to blame the supplier. The supplier goes straight to jail, they don’t get to blame the manufacturer. Supposedly the manufacturer should go to jail — he doesn’t seem to, does he. That’s the fault of our government officials. That needs to change. But this is a capitalistic society and the biggest drug dealers are the FDA. We all know this, that doesn’t me we, individually should stop calling for justice and what is right.
BANKS: Get serious. You’re about to bottom out and you’ll have nothing left if you don’t start playing smart (and not clever) by modifying as many loans as you can as fast as you can. If you keep thinking you can run the system and get away with murder the hands you burn will eventually be your own.
By the way, Kitty Genovese was killed that night. She could have survived but didn’t. Many of the homeowners being slaughterd are casualties of the greed of Wall Street and the audacity of the banks, who obviously believe they can do whatever they want and get away with it.
If a homeowner wants to walk away, why is anyone having a problem with that? We have lots of ways of dealing with people for breach of contract. In housing, it is called foreclosure. If the lender is stuck holding the bag because the value of the asset has declined dramatically, too bad for the lender for relying on such valuations. Businesses walk away from contracts all the time, when it makes business sense to do so. If I were facing a bill for 400,000 for something that was worth only 200,000, you can bet I would be considering walking away – depending on the cost of doing so.
Where there is no deficiency claim possible, walking away from an unsecured debt in the 100’s of thousands makes perfect sense. The hit on a credit rating will prevent easily repeating the same mistake twice on the consumer side. And having an inventory of homes worth less every day might make lenders think twice in the future also.
Unless there was specific fraud (not the kind where someone rounded up to the nearest 1000 an annual income), no one should go to jail, or even be threatened with it.
For Al the realtor:
I couldn’t help noticing your claim
that it is your job to refer your buyers
to a mortgage broker. Since when?
Last I heard, this was called “steering”.
Since you believe this was part of your
job, please outline exactly what you
included in your investigation of the
mortgage broker(s) and the broker’s
loan officer before you turned your
clients over to them.
Your comments ring hollow and sound
like sour grapes. As “all” of us reflect
on our own responsibility for this mess,
may I remind realtors of just exactly
where the point of sale began. Frankly,
as a group I should think you would
have a little more common sense than
to place charges at everyone else’s door.
Ann,
Your statements show just how uneducated and mindless most (not all) R/E agents truly are. Here is a novel idea\’e2\’80\’a6Everybody that YOU sold a home to or that purchased one of YOUR listings, that is now heading towards or in foreclosure, give your commission back to them? \’e2\’80\’9cWhat\’e2\’80\’9d you say, \’e2\’80\’9cThat\’e2\’80\’99s crazy.\’e2\’80\’9d Well that is just how downright stupid your contentions are. You Ann with your statements sum up just how unprofessional, uneducated and classless most (not all) R/E Agents really are.
I am going to let you in on a little secret\’e2\’80\’a6In speaking with, Appraisers, Title Companies, Home inspectors etc. (I have been in the Lending Industry for 14 yrs) they all to a person have said that the weakest link in the entire transaction is the R/E Agents. Way overpaid for what they actually do\’e2\’80\’a6 If all of thee above ran their respective business like R/E Agents ran theirs (most, not all) they would be out of business.
Louise,
Ann is the realtor. I’m a soldier.
So sorry, my bad. I realized my
mistake too late. No offense intended.
I should be outraged by being called a realtor!!!!! Just kidding. I know they’re not all bad people. REALLY stupid leadership though. I’m interested to see if Ann has any rebuttal for posts 4, 6, 7, 8, 12 and 13.
Ann,
Most likely will NOT respond to posts 4, 6, 7, 8 12 & 13. She will treat us like her clients. Unprofessionally.
Tracy,
I agree with your comments. A lot of gray areas are in this industry. Walking away sometimes is the best solution in business. But most of the foreclosures from the consumer aren’t going into a deal as “this is business.” It’s a double edge sword of sorts. When the L.O. is originating a bad deal and the consumer, loses then is it just business? Maybe yes and maybe no, but none the less it\’e2\’80\’99s bad. Fortunately, natural mechanism will correct the bad business overall. However, when the borrower for negligent reasons just walk away because the deal wasn’t all they thought it could be then is that just “business?” Yes, but that’s bad business too and other pay the price. The natural mechanism in place will correct that as well. The big problem is no one person or group is fully to blame. It trickles down from Wall Street to the consumer but it also trickles up from the consumer to Wall Street.
Cut out everyone else except these two entities and you can see it more clearly. The consumer wants something. Wall Street is providing it. The intricacies are semantics, i.e., loan debacles, theft, fraud, greed, you name it. It is in those intricacies you find the Consumer and Wall Street floating around. The problem is Wall Street has a product that the consumer has convinced themselves they need and Wall Street is exploiting that need to no end. Does the consumer know this? Yes they do, but they roll the dice anyway.
Now, add the agent, the title attorney, the broker, the insurance agent, the appraiser into it and look at the confusion and frustration you get. This is why I constantly say education is the way out of this thing.
JacMac said it very succinctly. Education. I want to add Accountability. The industry is all business, no play, and no emotion.
Ann- I left out Real Estate Agents, Title Companies, Insurance Agents and Appraiser. My bad. And yes, you too need to go to jail. It begins with the borrower who wants whatever. No crime has been committed yet, but because of greed, praise, inner satisfaction, whatever; most agents are trained to execute the theory of “I do whatever it takes for my client to get a home.\’e2\’80\’9d
Most Agents- leave out in that speech, \’e2\’80\’9ccommission.\’e2\’80\’9d You need the client so you will do whatever to make your money. That\’e2\’80\’99s cool. Remember, its business.
Brokers- we look to agents for business. If I don’t satisfy the agent\’e2\’80\’99s needs, they go somewhere else. Commission gone. \’ef\’81\’8c
Appraisers-They look to brokers and banks for business. If they don’t give us the results we need, then we go somewhere else. \’ef\’81\’8c
Insurance agents- same as the appraiser \’ef\’81\’8c
Title company- if they explain toooooo much and the borrower backs out the deal then we (meaning the agent and the mortgage broker) go somewhere else. \’ef\’81\’8c For the title company
The bigger the sale, the bigger the check everyone gets. Everyone. The borrower gets the big house, the seller gets the big proceeds check, everyone\’e2\’80\’99s commission is “fat” and when the borrower is homeless, looking for some answers we all direct them to someone else. Ann, save you “g” for someone else. YSP hasn’t been a topic here for some weeks and since you brought it up, let me ask you a question.
Can you explain to everyone, on a million dollar deal, what in the hell type of performance you would do to get 6% or 60k?
What do you add to a pre-printed contract that yields that amount of money?
What kind of walk thru do you do for that amount of money?
What are you saying at the closing before you get that check?
What inspection are you performing?
What policies are you binding?
What are you doing? Exactly, nothing. However, agents like you get on everyone\’e2\’80\’99s nerves and disrupt the flow of a deal “doing everything to help you client\’e2\’80\’9d And you know what, it\’e2\’80\’99s cool. Because, no one, even myself sometimes can justify the income I make on a deal like that. So sometimes I have to remain quite because any response will sound stupid. So move along with that or accept your role in this mess and offer some solutions.
Ann the realtor should not throw stones at a glass house when she herself lives in one. From the get go mortgage brokers and their loan officers have been demonized by the media, government officials, the NAR for what they are now calling predatory loans made to their clients as well as other observers. Granted, there were and still are those mortgage brokers, who fraudulantly originated home loans – they should go jail! However, the large segement of us in the mortgage business are professional and honest hard working persons.
The dust is beginning to settle in this great debacle and now the real culprits are having their day. Ann’s ignorance is understandable!
From her venting it seems she has NO CLUE as to the role of a mortgage broker. Here’s a quick lesson Ann, mortgage brokers do not create home loan programs, write guidelines for those programs nor fund loans.
I have worked with some of the best realtors and I have come across some of the worse who give their organization a bad name. I don’t judge the entire industry on the less than professional practices of those few individuals. Ann’s blanket statement accusing all mortgage brokers of being shady is baseless, unprofessional and exposes her ignorance!
Here’s what I think everyone did wrong (not all people in each category made each mistake of course):
Realestate
1) Convinced (tricked) people into an overpriced market (greedy)
2) Convinced people that realestate always goes up (immoral)
Borrowers
1) Bought too much house (greedy)
2) Didn’t analyze their financial situation, give themselves a safety net (foolish)
3) Didn’t perform due diligence chosing a mortgage (foolish)
4) Falsified documents to qualify (illegal)
Brokers
1) Committed fraud in falsifying criteria (illegal)
2) Guided borrowers in to high cost loans (greedy)
Appraisers
1) Providing inflated appraisals on demand (greedy)
Lenders
1) Didn’t maintain reasonable lending standards, and thus gave loans to people that shouldn’t have had them (foolish/greedy)
2) Turned a blind eye to fraud (foolish/greedy)
Wall Street
1) Turned a blind eye to the detachment of risk of owning mortgage debt from underwriting it – CDOs (foolish)
Government
1) Couldn’t be bothered to pay attention to what is going on (more of the same)
Don…..very good analysis….I agree 100%
Al, so I get you’re saying that foolishness, greed and immorality are at fault? Is that it?!?!?!
Seriously, Al, I like your post, but I think you need to tac on some greed to the Wall Street Investors.
I was being sarcastic in the first line and supportive in the next, and then sarcastic again — I hope that was clear, Al
“The finest opportunity ever given to the world was thrown away because the passion of equality made vain the hope for freedom.”