Amazing Turnaround

An amazing turnaround is happening in mortgage lending. The wild, maladjusted teen-type thinking of “How much more can I have? And I demand it right now! ” is being refined to a more mature thinking. This new maturity will steady the lending arena.

Before the GSEs when there were only FHA and private investors. We learned to create loans with a concept of “do it right the first time”. No do overs. Period. Furthermore, homes were to live in and mortgages were for people who wanted a home for family, generations even. American homeowners of yesteryear planned parties for the day when they would totally pay off their mortgage and could live in their homes without burden of debt. The home was not an endless cash register to be tapped to 110% of its value; instead, homes were considered almost sacred in their sanctity of human family.

We have been through much together since then. I do not advocate going back in time but to stay constantly in motion, creating new loans for today’s borrowers who now understand the big picture and who will once again “regard the end”. In other words, pay their mortgages with a comprehension that they promised to do so and to do anything other than that would be dishonorable. It seems cold that I should write these words when people have lost their jobs and can not afford their homes through no fault of their own promises. However, I contend that the bigger picture of what happened to America was not done by one industry, or by several lenders, or by a handful of borrowers. A massive number of individuals did their own thing to get ahead in the real estate market; whether it was buying 7 more flippers then their $3000.00 wage could handle; or by frauding a lender into thinking the borrower earned more money then they did; or by an investor who fanned the out-of-control fires of real estate passion on main street. The hard lessons of prudent property purchase and the continuum of mortgage lending effect all - at fault or not.

In a society gone money crazy, and property stupid commitments and promises lost the honor they once had. The thinking that the fast buck will always cover the smell of what ever had to be done to get the buck in the first place must be replaced with principles, respect and honor. Ask someone to describe honor and you will be surprised to find a stuttering answer at best. Ask someone else what their principles are and a quick response is most likely not forthcoming. Desires and wants are much easier to describe.

Restoring honor and respect in mortgage lending is a journey that is at once sensitive and sustainable. Lenders, investors, vendors and borrowers must all keep their acts clean in order for the amazing turnaround to be fulfilled. How wonderful it will be to have honor replace greed and corruption as they go by the wayside with sub prime lending.