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Name calling borrowers from a pedestal



I didn’t realize the subprime interest rate freeze was such an emotional issue for so many real estate agents. I can’t tell you how many blog posts I’ve read in the last 24 hours, where the borrower has been referred to as “stupid”, “irresponsible”, “idiot” etc. etc. Also most real estate bloggers don’t seem to think this plan will help anyone. The view coalesces around a general feeling that this is a cynical political move by lenders and politicians.

I am here to remind folks in the real estate industry that regardless of what you might think the vast majority of “stupid” borrowers who took out subprime loans are doing just fine. Subprime loans offered them a path towards homeownership and achieving the American Dream. That’s pretty cool in my book.

Second, if you were in real estate the past few years, then you very certainly benefited from these “irresponsible” borrowers who took out a subprime loan and bought homes (and paid your commission).

It’s easy to sit on a pedestal and denounce the move, however, I believe the parties who hammered out this deal are sincere. I think the move will help hundreds of families in need and at the end of the day lenders will benefit as well. And by the trickle effect so will the general economy.

Let’s not forget that these borrowers whom real estate bloggers are calling names are our clients and customers. That makes me scratch my head. That is why I’m choosing to extend my professional services to borrowers whose rates are being frozen. I want them to make the most of this new found reality. All power to them.
Now, if bloggers really want to an emotional issue where you can call anyone any name you want, there is a brewing CIA torture scandal with destruction of evidence. Just the fix you need.

Writer for national real estate opinion column, focusing on the improvement of the real estate industry by educating peers about technology, real estate legislation, ethics, practices and brokerage with the end result being that consumers have a better experience.

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  1. Scott

    December 7, 2007 at 1:34 pm

    Amen! Enough with the snide, smarter-than-thou conspiracy theories so many bloggers have spouted of late. Thanks for your post.

  2. Chicago Real Estate

    December 7, 2007 at 2:32 pm

    Thank you.

    I just wrote about this same thing at my Chicago Real Estate blog.

    When you take a step back and think about it, anything that provides stability and predictability to the real estate and mortgage markets is a good thing for sellers, buyers, and mortgage bankers and brokers.

    Of course, it is good for agents, too.

  3. Wade Young

    December 7, 2007 at 9:26 pm

    The FBI says that up to 70% of early payment defaults may be linked to borrower misrepresentations on mortgage loan applications (according to the FBIs Mortgage Fraud report). The FBI is engaging in name calling as well. It appears that many “liar loans” were indeed made to liars. I’m sure that there were some uneducated, innocent people caught up in this mess, but there were a lot of guilty folks too.

  4. PeterT

    December 7, 2007 at 9:28 pm

    Good post, Shailesh. While I don’t think this bailout plan will go to far in fixing the problem, I think it is a step in the right direction. When things were hot we all did our best to get people in houses. If there was a way to do it I didn’t spend much time telling people they were making a mistake and being irresponsible by buying. I did think some of the loan programs seemed insane, but more from a lenders perspective than the borrowers.

    The bigger problem is that home prices are going down. If prices were still inflating this problem would still be on the backburner.

  5. Ines

    December 7, 2007 at 10:31 pm

    I totally agree that the name calling is uncalled for – those people ARE our clients and they achieved their goal of home ownership. The real question is for those that did not take the time to explain the consequences, although everyone is responsible for their own actions, I do think it’s our responsibility, as professionals to explain.

  6. Vicki Moore

    December 10, 2007 at 4:25 pm

    Has anyone heard: people in glass houses shouldn’t throw stones. How about before you judge me, walk in my shoes?

    Those stoopid people took the advice of us “professionals.” They didn’t make those purchases on their own. They had help.

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?



NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<


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Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.



young executives

job openings

Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.


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Economic News

Gas prices are down, so are gas taxes about to go up?

Do low gas prices mean higher gas taxes are on the way? Budgeting for 2015 just got a bit more complicated, if some politicians have their way.



gas tax


Gas taxes and your bottom line

Many industries rely heavily on time in their vehicle, not just truck drivers and delivery trucks. Sales professionals hop in their vehicles throughout the day, as do many other types of professionals (service providers like plumbers, and so forth). For that reason, gas prices and taxes are a relevant line item that must be budgeted for 2015, but with politicians making the rounds to push for higher gas taxes, budgeting becomes more complicated.

Gas prices are down roughly 50 cents per gallon compared to a year ago, which some analysts say have contributed to more money in consumers’ pockets. Some believe that this will improve holiday sales, but others believe the timing is just right to increase federal taxes on gas. The current tax on gas is 18.40 cents per gallon, and on diesel are 24.40 cents per gallon.


Supporters and opponents are polar opposites

Supporters argue as follows: gas prices are low, so it won’t hurt to increase federal gas taxes, in fact, those funds must go toward improving our infrastructure, which in the long run, saves Americans money because smoother roads mean better gas mileage and less congestion.

Gas taxes have long been a polarizing concept, and despite lowered gas prices, the controversial nature of the taxes have not diminished.

While some are pushing for complete abolition of federal gas taxes, others, like former Pennsylvania Governor, Ed Rendell (D) tell CNBC, “Say that cost the average driver $130 a year. They would get a return on that investment” in safer roads and increased quality of life, he added.

The Washington Post‘s Chris Mooney points out that federal gas taxes have been “stuck” at 18 cents for over 20 years, last raised when gas was barely a dollar a gallon and that the tax must increase not only to improve the infrastructure, but to “green” our behavior, and help our nation find tax reform compromise.

Is a gas tax politically plausible?

Mooney writes, “So, this is not an argument that a gas tax raise is politically plausible — any more than a economically efficient tax on carbon would be. It’s merely a suggestion that — ignoring politics — it might be a pretty good idea.”

Rendell noted, “The World Economic Forum, 10 years ago, rated us the best infrastructure in the world,” adding that we “need to do something for our infrastructure, not in a one or two year period, but over a decade.”

Others would note that this rating has not crumbled in just a few years, that despite many bridges and roads in need of repair, our infrastructure is still superior to even the most civilized nations.

Regardless of the reasons, most believe that Congress won’t touch this issue with a ten-foot pole, especially leading up to another Presidential campaign season starting next year.

“I think it’s too toxic and continues to be too toxic,” Steve LaTourette (the former Republican congressman best known for his close friendship with his fellow Ohioan, Speaker John Boehner) tells The Atlantic. “I see no political will to get this done.”

Whether the time is fortuitous or not, and regardless of the positive side effects, many point to a fear of voters’ retaliation against any politician siding with a gas hike, so this matter going any further than the proposal stage is unlikely.

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