I am a mortgage loan officer. I never delved much into the “crazy” market - most of my clients verify income and have at least decent credit. While occasionally I come across a subprime scenario, I don’t seek them out, they’re usually referrals from another client. If the customer seems to be smart enough and astute enough to not let whatever made them subprime in the first place happen again, I work with them. Never will I do a loan I know someone can’t afford. Never have.
So far, I’m doing OK through this. Not great, but OK, actually better than last year because of moving to a better company and better market. I’m also still in a good enough position to not justify a career change, as I still make more money and enjoy my work more than I would a salaried Dilbert-style desk job somewhere.
However, wishing the entire industry collapse because of some unscrupulous parts of it is unfair and pisses me off. I understand how people feel, and would agree that a large part of the run-up in prices is due to financing terms that probably never should have occurred. Primarily using stated income loans for people that just honestly couldn’t afford them, not for their original purpose, which was to make it easier for self-employed people who write off expenses to qualify for loans.
Most of the problem was abuse of what in and of themselves were good loan programs, for the right borrower. Abuse by giving them to people that either shouldn’t have had ANY loan, or didn’t know how to use what they did get and/or didn’t truly understand it.
However, wishing for all realtors and mortgage brokers to be out of work, and housing values to plummet 50% is going to hurt EVERYONE.
I am not happy this is happening but believe like most everything it is cyclical.
Further comment in some relevance to the housing market and our economy.
I have argued repeatedly over the last few years that shipping all the hard manufacturing jobs overseas would some day come back and bite us in the financial butt so to speak.
I feel sorry for the thousands of people who worked in the industry processing loans.
Employees who must now try to find other service related jobs that may not pay as well or might not be available at all
It is a downward spiral for some and will affect more than just the housing industry.
But, what percentage of Mortgage loan officers were not prudent as you have been during the past 10 years, especially the past 5 years? I’d say, most mortgage brokers are out the make the bucks with loan programs offered to those that didn’t qualify the norm. The entire industry needs to be cleaned up.
What's your opinion of the Partnership for Prosperity agreement and New Alliance Task Force?
What's your opinion of the FDIC allowing banks to accept Mexican Matricula Consular cards as valid ID to obtain bank accounts, home and auto loans?
Everyone except those who see houses for what they are: a place to live.
A home is a liability not an investment. Its value may go up, may go down. But in the end it's a place to live and as long as you can make the payments, short-term swings in housing prices don't matter.