With 40 years in real estate and construction - with a law degree:

Home ownership is critical to a democratic form of government. The two-thirds who own homes act to protect their investments in their homes and their communities to a far greater extent than most (but not all) renters. Owners generally have both a greater financial and a psychological investment to protect.

We developed rules, regulations and standards throughout the last century to promote home ownership in a responsible manner. The rules and regs served the industry well up until the Cheney/Bush administration. The total deregulation under the Cheney/Bush administration abandoned all accumulated logic and experience and, in simplest of terms, turned those 1/3 non-owners wanting to purchase over to the wolves.

Properly underwritten loans is the foundation on which everything else in this country rests. Anybody who doesn't understand that is a threat to our basic financial system and, ultimately, the security of this nation.

We went through a very similar process with the S&L disaster under Reagan. But, once again, the smell of money was to strong to resist.

The sickest part of this whole process is that the big money insiders benefit getting in and out early, participating in the workouts and eventually buying up assets at ten cents on the dollar. It is a process very simmilar to the mob manipulating stocks on wall street, but encompasses a much larger dimension. The little guys get killed. The big guys make a killing.

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Clarification: Although I am sure that some Realtors understood the growing problem, I do not believe that they should be the scapegoats for an administration policy.

The industry practice today is for a realtor is to start working with a prospective buyer AFTER they have been pre-approved for a loan by a lending institution.

I am certain that some Realtors sent clients to unscrupulous lenders, because the Realtors had a higher success rate in getting clients pre-approved, not that they necessarily participated in the loan approval process or were aware of the prospective purchasers limitations.

The flip side of that argument is that in every industry there are some who knowingly go over the line, but still, I do not believe that the Realtors should be the scapegoats.

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I am a Realtor. We are taught to show our customers homes that are in their price range and to have the potential buyers pre-qualified for a loan before we ever show homes. This saves our buyers a lot time and helps them get down to the serious business of buying a home that they can afford. I think the blame should be put on predatory lending and the mortgage business in loaning people money knowing that they would not be able to pay back when the interest rates changed. Greed is the buzz word here. People need to live within their means and not live pay check to pay check. If you borrow money for a home you need to look at the long term payment and make sure you will be able to handle a down turn in the market when the interest rates rise. It is called taking responsibility for your own actions. Understand the loan process and how it affects you.

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Homeownership from 1986-2006. A GIANT HASSLE &
UNAFFORDABLE
We gave up homeownership
in 2006. Reasons: 1. inflated prices/aging house inventory
requiring infrastructure upgrades: plumbing,
electrical, roof replacement & a/c--2 which
we were able to do. 2. Urban threats-city nuisance stormwater pond- heavy equipment causing traveling on road next to our house, created vibrations/cracked pier style concrete foundation, requiring contractor insurance
settlement to repair foundation. 3. Sky-rocketing property
insurance/house insurance. 4. climate change-drought,
flood, tornado, hurricanes, ---assaulting US house inventory
every day...billions in housing losses, trauma to homeowners.
Selling house-neighbors angry we did not ask $200,000
for a broken down old house. The Realtor priced house
prudently & house sold in 5 days.
Now live in apt complex/rent---income rich/worry free.

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Awe Shucks - great article.... I know a lot of hard working REALTORS that could use a hug - and never participated in the craziness of sub prime... All realestate is local- our area is doing well. Actually I attended a panel discussion two weeks ago at the WCR in Boston, and Pat Cooms, last years Pres. of NAR was asked a question by a nice broker, 'when will the market return to normal?' Her Reply: Look around and embrace the new normal, this is it' And it's true, rates are still affordable, and don't forget, for most of us, we just want a home, not an investment we can count on for retirement, more for enjoyment, and paying down a mortgage is nice, and having the tax benefits is a plus.

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