Politicians should be helping us move forward, not freezing forward movement

Anyone that reads this blog knows that I am not a big fan of government intervention in the housing market. Anyone that reads this blog also knows that I am a big fan of honesty and integrity both in one's personal and professional life. Much of what has happened in the mortgage industry and the housing industry stems from a lack of honesty and integrity in the personal and professional lives of Americans. The government's attempt to "save" the housing industry has simply kicked that can farther down the road.

The latest knot in the housing market unraveling is the admission by the top three lenders that there have been flaws in their foreclosure documentation--putting into question the legality of millions of foreclosures. While I would never condone a lender purposely ignoring the laws of the states they operate in nor their own internal system of checks and balances, I also have to ask myself if we, as a country, have really left them much choice.

Should we let lenders off the hook? Absolutely not! Should we continue to hold them accountable for the mistakes that they made? Absolutely! Can we get blood from a stone? Not the last time I checked.

When I read that one Bank of America official signed up to 8,000 foreclosure documents a month, I started to do the math. I timed myself; it takes me eight seconds to sign my name and ten seconds to sign and turn the page to sign the next document. It would take me 22.22 hours to sign 8,000 documents. Just to simply sign her name would take 16% of this official's work-month. The second part of her admission was that she typically didn't read the documents she was signing. If it takes her 16% of her work-month just to sign her name to one of those pieces of paper, how long would it take for her to read the documents that went with each one of those 8,000 foreclosure files? Oh, and by the way, that is probably just a small part of her job description.

As a Realtor, I lean on lenders all the time to process a short sale faster, give me a response on an offer on a foreclosure faster, redo a BPO (Broker's Price Opinion) because it's four months old... Those are all processes that were a very small part of what a lender did each day. Now lenders are not only trying to stay in business by doing what they have always done--originate loans--they are also tackling short sales, foreclosures, and the selling of foreclosures in monumental proportions. I'm sure this is adding tremendous pressure to already tapped-out personnel and financial resources.

So why am I writing?

Because the reality is that the lenders are not the only bad guys in this. Politicians who encouraged the "everyone has a right to own a house" mentality, investment firms that ignored their own safeguards and purchased risky securities that lacked required documentation, buyers who wanted what they wanted regardless of whether it was wise or even feasible for them to pay the mortgages they applied for, and homeowners who chose to use the equity in their homes to buy luxury items rather than do it the old-fashioned way and save their pennies...all of us contributed to the bits and pieces that added up to the total melt-down in the lending and housing markets.

When my boys were little and something got broken as a result of their rough-housing, I always made both of them clean it up, regardless of whose hand actually did the damage. We all need to be willing to clean this mess up now, regardless of whose proverbial hand touched that last document. As frustrated I am with lenders, I do believe that they are doing their very best to get to the other side of this mountain of foreclosures. It's in their best interest. I'm sure they would rather have homeowners pay on their mortgages rather than have to foreclose. Lenders are not in the business of being landlords. We need to support their efforts to this end, not thwart them.

Home owners that do not make enough money to afford the mortgages they have should not be wasting their lender's time and resources to get loan modifications. Lenders actually learned one of their lessons and are no longer willing to strap a family with a monthly payment that they cannot qualify for nor keep up with. This is a good thing!

Politicians need to stop shrugging responsibility off of their own shoulders by attempting to place it solely on the shoulders of the lenders as they call for a "freeze on foreclosures" as if somehow the lenders continue to be the bad guy. I really think lenders are just doing their best under nearly impossible conditions. There is no question as to the delinquency of the mortgages that are being foreclosed on; there is simply an acknowledgment that proper procedures have not been followed once the delinquencies have occurred. Perhaps a freeze is necessary to shore up the process, but politicians should be asking what they can do to help the process move forward instead of doing everything they can to freeze it.

We Have to Earn Our Way Out

You have to earn your way through life--Trevor and Ian's Mom

My oldest son is working two jobs—one of which is a delivery job for a local deli. He needs transportation, and it can’t be me anymore. I found myself in a Catch-22: support his need to work and buy him a car, or stick to my firm belief that my boys need to earn their way through life and tell him to buy his own car. The reality is that without a car, he can’t work, but without work he can’t buy a car. I wrestled with this dilemma for days before I hit on a solution that I think supports both concepts. I will buy him a reliable used car that he can reasonably repay me for each month for a specified number of years. At that time, the car will be his. This way, not only is he earning the right to have a car, but he has “skin in the game.”I love my son, but he has not always been kind to the family car. Now, it’s in his best interest to take care of this car because he will be paying for all gas and maintenance.

In America they are too full to swallow sorrow--Double Luck by Lu Chi Fa

I just finished reading Double Luck—the story of a Chinese orphan who works hard through adversity to make it to America via Hong Kong and Taiwan. He was sold into slavery at age 5 and was the sole bread winner for his brother’s family at age 9. It’s caused me to revisit my childhood memories in a major way because Chi Fa was leaving Taiwan for America just as I was leaving America for Taiwan. He was 18. I was 5.

To Chi Fa, I was one of those Americans that were too full to swallow sorrow. My first thought was that at age five I was too young to have any sorrow to swallow, but this author had already experienced more sorrow by the time he was five than I experienced my whole childhood. My family lived just outside of Taipei for three years, and while we probably didn’t live the way most of my friends lived back in the States, we lived much better than most of the Taiwanese families that lived in the lean-to’s behind my house. Interestingly enough, my memories of playing with the kids back there all involve laughter and smiles. They didn’t have a lot, but then they didn’t need a lot to be a family and be happy.

I have still joy in the midst of these things--Confusius

In the decades following the Great Depression, Americans were forced to live their lives differently. They learned to save and not take even the smallest luxuries for granted. During World War II they had to fight for their country, their way of life, the freedom that seemed inherently theirs, and in a lot of cases their very lives. That generation of Americans did without, sacrificed, worked harder than many of us can imagine… and in return, they earned every penny they saved, every car they drove, every house they lived in, every privilege they experienced, and every luxury they cherished.

My memories of family gatherings at my grandfather’s house are warm and wonderful and full of laughter. My grandfather, all of his sisters and brothers—one who was even held as a POW in Germany during World War II—and their families all gathered to share and be with each other. It was a time to cherish what everyone had. It was a time to cherish each other and family.

The families that lived behind me in Taiwan didn’t have much, not even a true roof over their head, but they also didn’t have credit card debt, mortgages that they couldn’t afford, or a feeling that their joy was based in anything other than family and friends and that which they earned—including integrity and dignity which is very important in the Chinese culture. In the book that I just read, Chi Fa had many reasons to be bitter, to be full of sorrow, to blame everyone and everything around him. Instead he made wishes on the first star in the night sky and recited Confusius for comfort:

With coarse rice to eat,

With water to drink,

And my bended arm for a pillow—

I have still joy in the midst of these things

We Have to Earn Our Way Out--Margie MacDonald

I think the solution to stabilizing the housing market is to go back to the concept of earning what we have and keeping our priorities in perspective. The mortgage industry has to earn the world’s trust back, and the only way to do this is to operate from a foundation of honesty, principle, and integrity from this day forward. Buyers need to earn the right to own a home, and the only way to do this is to work hard to earn and save a down payment—their skin in the game—and to live within their means. Americans, still, live a better life than most of the world, but we need to refocus our priorities and responsibilities to ensure we don’t lose the privileges of the American way of life.