Under normal circumstances I would be inclined to feel pity for the industry that has slowed the global economy and impacted thousands of families. Of course I’m talking about the mortgage companies. But in light of recent experiences, it is truly difficult to feel much sympathy.
A week ago, my mother, a real estate broker, showed a pre-foreclosure property, a two-year old townhouse located in a new development popular with presale flippers in Orlando, Florida. Aside from the few holes in the wall and rotten food left in the refrigerator by an angry foreclosee, the buyers loved it. They liked it so much that they instructed my mom to make an offer.
She called the listing agent and advised him that her clients were ready to make an offer on the townhouse.
“Oh, it’s not in foreclosure yet and the lawyers for the bank don’t get paid unless it goes into foreclosure,” the agent responded.
“So, it’s useless they make an offer?” she asked.
If that weren’t bad enough…My next door neighbors are in the process of remodeling and is seeking out around 50k to make the improvements. They are half-way through their 30 year mortgage and their credit rating is in the high 800s which is phenomenal. Dawn, the one assigned to research their options, spoke with numerous brokers and none seem excited to give a fixed loan for a second mortgage. Instead, they are all trying to convince her to settle for an adjustable rate which is of course the type of mortgage that has greatly contributed to the crisis. They’ve also advised her to spend any excess money on a flat-screen TV or furniture, instead of paying back part of the principle. “It’s good for the economy” one agent told her.
The industry doesn’t seem humbled at all. They appear as greedy and foolish as ever.