2010 could be the turnaround year for the economy. It could be another great depression. Government budget short-falls for 2011 could be worse than this year. In the early years of this century, the real estate/mortgage industry carried the economy when the stock market, job market, and gross domestic product were all dropping in the same direction as in 1929. We faced a similar situation in 2008 and are still struggling to climb out of this current hole called recession.
The difference between now and seven years ago is the position and health of the housing market. Because the real estate/mortgage industry was so powerfully healthy with the “refi-boom,” many banks became uber-competitive and created what Greenspan dubbed as “exotic loans.” Being a mortgage broker myself, I clearly remember a rep from a mortgage wholesaler coming into my office with the exciting news of their newest loan program. A potential homebuyer need not have any credit…none, could have no money down, qualify for 103 percent financing on ‘non-traditional credit’ and make interest only payments for the first five years. I am sure many of those loans and others are the crux of foreclosuremania.
I never did originate a mortgage with that program, but I did utilize many pay-option variable rate programs for investors and refinancing home owners. Needless to say, none of these mortgage companies are in business today, including Countrywide, Greenpoint and DecisionOne. I still have the staplers, backscratchers, squishy balls and a drawer full of pens to recall glory days. That is all I want from those years.
With new restricting regulations, foreclosures at record high and the sub-prime dinosaur in the Museum of Mortgage History, we are redefining our industry again… again… again. What this means to all of us still standing is to establish the norm; a new reference, by which future years will be compared. We need to perform our jobs with pride, ethical compassion, professional rigor, and reclaim the title of ‘trusted advisor.’
This leads me to our feature article this month, from Mandelman, who gives us a different view on investment strategies. Forget everything you’ve been told, from the time you were a kid, about diversification and keeping your money in the market long term. He will certainly wake some folks up.
In this issue we launch the highly anticipated premier column from the guys of Think Big Work Small – Frank & Brian. You won’t want to miss what they have to say about their visit to Washington DC for the NAMB legislation conference.
We also are launching a new column titled From The Blog. I will be picking one post per month from our recently launched TNR Blog to publish in this very magazine. This issue has Naomi Trower, a social media guru to the mortgage industry, talking about what this concept means and how we can utilize it to roll with the changes. Get used to seeing and hearing about Naomi, she is a classic overachiever and a rising star.