fliprent

 By now we all should know how our country got into this economic depression.  Anyone who doesn’t know isn’t paying attention.  Yes I did call it a depression just like I called it a recession before it was official.  It’s not just me either.  However, if you don’t know how it happened, here is my condensed list:

• Lenders
• Mortgage Brokers
• Regulators
• Mortgage Secondary Market
• Investment bankers
• Bernie Maydoff (yes he gets his own category)
• The Feds
• White House
• Congress
• Past Presidents
• New Home Builders
• Real Estate Investors
• Hedge Fund Managers
• Media Outlets

Where are the so called irresponsible borrowers?  They didn’t make your list, you might ask?  Well…I have a question too.  Who exactly are these so called borrowers?  Are they convicted felons, liars, criminals, scam artists, ponzi scheme organizers, crooked politicians, drug dealers, money launderers, rapists, murderers, or just plain greedy?  Wait… that sounds more like the list above doesn’t it?  I bet you could go through my list above and find at least one match. 

By now we all know someone that is struggling to pay their mortgage or facing foreclosure.  They are everywhere in every city in our nation.  Most of them are everyday working folks that “reached” for the American Dream right?  This is the very same dream that the folks in the list above tells us is possible if we just work hard.  The folks that create credit scores, front end/backend debt, debt to income ratios, asset backed securities, interest rates, mortgage qualifiers, mortgage calculators, mortgage securitization, loan amortization, subprime mortgages, foreclosure laws, real estate investment trusts, fund rates, asset pools and many other complicated structures.  These folks MUST be geniuses right?  Certainly Bob the electrician thinks they are.

Bob the electrician had never been able to qualify for a mortgage because the “geniuses” always said he wasn’t ready.  One day Bob heard that Joe the plumber in apartment B just bought a brand new two story home with a back yard for the kids?  Bob went to that very same “genius” that gave Joe the loan and found that he can get one too.  Not only can Bob qualify he can actually afford the payments.  If a genius thought Bob could afford the home then it’s got to be true right?  That’s what he thinks…

Bob and Joe should have known better some will say.  I say… show me the average american who understands prime underwriting guidelines, heightened perceived risk of default, FICO scores, non-conforming loans, compound interest, APR, LPEAR, exorbitant fees and hidden terms and conditions.   

So when I hear “irresponsible borrowers” even mentioned in the same sentence, I STILL worry about the direction of our nation.