LETS TALK ABOUT RIGHT AND WRONG.......Most people dont want to talk about the subject of what is right and wrong in this day and age of "situational ethics" translate.. "I dont HAVE and ethics....",
So what does that have to do with Real Estate, Specifically it has to do with the melt down in the Real Estate Markets and the correpsonding meltdown in the Financial markets. The core cause of which is the meltdown in the ethics of INDIVIDUALS making UNethical business decisions. AND, YOU may be one of them. Dont think so? Read on.
Not all, but SOME, Wall Street, Main Street and the Mortgage Lending offices along with the Real Estate office and the Brokers that run them. There is a Commandment in THE Ten commandments that is oftren overlooked. We like to focus in on...murder.....adultery......idol worship....and all the "really bad stuff". But there is one fatal sin that is equal to them all.. COVETING. It manifests itself in people wanting more than they can afford, more than they are due and the jealousy that today we like to call... " SOCIAL JUSTICE" . Because Bill and Mary Sue have a big house., then I AM OWED a big house too. Never mind that Im a complete idiot and cant even remember to make the Newspaper payment on time.
Our all knowing and ALL wise government ORDERED Frannie Mae and Freddie Mac to make honme owernership the RIGHT of ALL Americans. Never mind that SOME Americans cant hold down a job, pay thier bills on time and would rather light up than clock in. But that doesnt matter. What Americans covet.. they MUST have and the Banks and brokers hungry for commissions were more than willing to step up to the plate with exotic derivatives and financing schemes that not even a super computer at the NSA could figure out.
Its all about PRIDE and wanting to be and have something that you are NOT. Its also the good book that says.. PRIDE goes before a FALL. And BOY aint it so!
CHAPTER TWO OF THE FALL.....
In comes that all knowing ALL helping hand of government ( looking for votes) to let people step away from their commitments and contracts and DEFAULT on thier mortgages simply because the game changed and the investment that they had BIG EYES for isnt so big anymore. Never mind that someone else bought thier commitment and depends on them making that payment. You have enough people that skip out on their contractural commitments and the entire financial system goes into free fall. IN COMES THE government again.. This time we call it a BAIL OUT.. Compliments of the Chinese government and funny money printed somewhere in a dark basement of the Federal Reserve in Washington D.C. This year 1.8 trillion of those dollars to be exact. If I were Chinese I would be worried that the 2.7 trillion in US Treasury notes that I have purchased will only be good for papering the bathrooms of about a billion screaming red hot mad Chinamen when they find out that the US notes they are holding are about as valuable as a roll of USED Charmin.toilet paper. And sadly.. its true.
I recently counseled a young man that was upside down in his mortgage to stick it out and not to fall into the trap that so many have. He was advised by an attorney to default on his mortgage in the hopes that the bank would work with him on a Loan Modification. After ruining his good credit, the bank has yet to offer him a toaster or a nifty bank calendar much less a loan modification.
POINT? Im going to type this in BIG letters for those of you that have half your brain tied behind your back..... IF YOU CAN PAY THE MORTGAGE ON YOUR HOME...PAY IT.. DO THE RIGHT THING AND EXPECT RIGHT THINGS TO COME BACK TO YOU. Just because the commitment you made earlier is not working out as your planned does not release you from your ethical obligation to be a man....or woman of your word. Honoring your word is more important than keeping home equity. Are you an honest person ONLY when it doesnt cost you money?
Case in point..... Man walks up to cute girl and asks her. If I give you a Million dollars will you sleep with me? She says, Are you serious? A million dollars? Wow,, I guess so. Sure. He then says.. Ok how about ten bucks. She says.. HEY! What do you take me for? He says.. We already established that. Im just trying to get to a price.
Not to toot my horn, but I have a condo on the beach in South Florida that I paid $360,000 for. Its now worth about $250,000 The Loan is $270,000 I have faithfully made the payments. In fact, I havent even applied for a Loan Modifcation. Bottom line, Chase bank in the last three months, modified my loan by reducing my principle by $110,000 and dropped my interest rate to 4.8 percent on a 15 year amortization. It dropped my payments by $900 a month. It DOES pay to do the right thing. And WHY did they give me the modificaiton? THIER answer. CLEAN credit, High FICO score, Never late on a payment, LOW risk for the bank. END OF BLOG...ENOUGH SAID
