Mortgage Philosophy, Your Mortgage File

Bank or Borrower . . . . or?

Our economy continues to stumble through a storm of uncertainty and hesitation, unable to take a confident step in any direction. We can trace the tailings back to the mortgage crisis which began a crescendo in 2008, climaxed in 2010, and now, what we hope is the diminuendo going into 2014.  I’ve been in the industry for over ten years and I’ve watched and read as the media attempted to find a scapegoat. Since personal accountability flew out the window years ago, let’s blame the cold, heartless banks, right?  After all, they were just in it for the buck and obviously willing to screw the poor, unfortunate American out of a home.

Really? You think a bank wants a foreclosure? Do you know how much that costs them?! Check it out here.

So while the borrower is busy blaming the bank, and the bank is busy dealing with the hemorrhaging associated with the foreclosure trauma, the real culprit is busy baking up that red herring they love so much.

In this NY Times article we get a glimpse into the events that started it all. In 1999, the Clinton administration pressured Fannie Mae and Freddie Mac to loosen the belt on lending in an effort to accommodate minorities and low income consumers. This idea –regardless of best intentions– had unintended consequence and the reality was far opposite the plan

The payment for this government debacle will cost our country billions, if not trillions in the long term. Since no one feels responsible we have been shrugging off the financial burden of this catastrophe in every way imaginable: TARP, Government MBS Program, no budget, etc. The bill is due, and if we fail as a country to handle it as adults, it will be handled for us.  The latter, as I’ve discovered in my life, is not as pleasant as when you willfully resolve the problem yourself.

Good luck, America.

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