Real Estate Financing...

The media and our industry have been crazed with news of the subprime market, in its disasterous state, and how that very state may lure our very economy into a downslide of Apocalyptic proportions.  I'll try to be as diplomatic as possible.  We, at times, are a society of drama queens....waiting to feast on what is so very, very, bad.  Well, let me also say something else, "Is It Really So Bad?"

No assumptions, no accusations, just a few tidbits of my off the cuff thoughts that may not have been delved into and 'hyped' up enough.  EXAMPLES:  Is it possible the economy could take some of the blame and inspiration for what is happening on the 'other side' of the mortgage market?  Is it feasible that a hike in the price of the very necessities many of us count on....heat (oil), transportation (gas), may have a tad little bit to do with what is going one?  Some point out >>>The subprime market was making risking loans......YES THEY WERE!  But risky loans are risky also because of risky borrowers.  How about some of that responsibility falling on them and their financial choices along the way?  I recently posted a blog from an email I received from the Pennsylvania Association of Mortgage Brokers about a Consumer Advocacy Group wanting to regulate the costs of mortgage loans to 3%.  I have an idea, why don't we regulate the prices of gas as well?  If we are going to regulate capitalism, we might as well be consistent...I think at least, and Regulate Capitalism.  How much does that Attorney/Accountant/Cleaning Lady/Iron Worker/Doctor/Bartender/Entertainer make....doesn't matter, it is too much.  Let's try to regulate that too.   Damn, there goes my diplomatic mood I wanted to portray in this post!

Let me step off my proverbial high horse of thought, my initial idea in even writing this was one of looking at things not so much from a different angle, but trying to breath in every bit of reality I can muster.  That deep breath led me to the thought, "Is It Really So Bad?"

  Yeah, in many circles it is bad, in fact...a nightmare.  But you can't have the good, without the bad.  Afterall, you take the good, take the bad, take them both and there you have...The Facts of Life, THE FACTS OF LIFE!!!    Sorry, that was unnessary...I was actually singing that in real life.  Back to my point.  You can't feel love, without knowing hate.  You can't have a boom, without a bust being an eventual reality.  What is going on now is simply a response to that very boom.  So, where does that leave us as professionals?

I've been doing this for a little more than a mere five years, so what do I know?  There are so many of you out there more seasoned than me.  So, what do I know that hasn't been thought of.....if anything?  Not sure, but I'm very sure I will tell you what I think.

-As the industry contracts, the strong will survive and perhaps expand, which is good for consumers who really only need/want a true professional in transactions that are of such importance that they involve the very roofs over their heads.

-As the parameters tighten up with lenders, being approved for a loan to buy a home will become more difficult.  Yet, that will ensure that when you apply for a mortgage and are eventually approved as a consumer, you may actually be ready to afford the responsibilities of home ownership....financial and otherwise.

-65% of mortgages done in this nation, at my last statistical working knowledge, are done my mortgage brokers.  (I must point out, as a broker...perhaps I'm bias on this.  Of course I am...)  A lot of heat is and will come down on some of the less than ethical boys and gals in our particular profession.  Some of it is very relevant and long overdue.  Yet, I once dated a corporate attorney for a highly recognized corporate entity and when finding out that I was a mortgage broker she said, "You guys are schysters!"  I responded, "Laura, you are a freaking ATTORNEY!"  There are schysters in every profession...but if you are good and true to your cause (your clients)...they will benefit by what you do.  The shrinking of that industry, my industry, will ensure the removal of a lot of the bad and ensure the good remain true and strong to our cause. 

- A las, I would like to point out the true thing that I hope happens with all this fuss over what is going on in the mortgage industry.  The very thing that may not only help our economy, help the industry, but submerge our culture in a new wave of that thing that has helped make humanity so strong.....KNOWLEDGE.  The attention to our industry I hope, will lead to education in our high schools, our colleges, and in our homes, with our families and conversations with our friends, about credit and buying a home.  I hope it better equips and educates our industry because of mistakes made in the past.  I hope it makes the bulk of us less ignorant as to the why's, where's, how's, what's, when's, of home ownership.  I hope and think all this negative attention will make our culture's thirst for that knowledge greater.  Perhaps it will increase our Pride of Ownership.....of Real Estate...of Knowledge.

Is It Really That Bad?  Perhaps, but maybe it just has to be to ensure it becomes so very good all over again.