Wouldn’t you like to know the answer to that one? Oh, I’ve read plenty of opinions from pin-heads and pundits who never spent a day on the frontlines of real estate where the real people and the real stories are.

 

And, all seem to have a vested interest in what we believe. So, as it turns out, depending on whom you believe, we have a pretty long list of villains to choose from.

 

Angry bloggers want to blame incompetent real estate agents and greedy mortgage brokers for talking a bunch of morons into buying homes they could not afford.

 

Lenders blame borrowers for getting in over-their-heads and for using their homes like ATMs. Shout out to Angelo Mozillo for being the king-daddy of slime balls, happily creating a grand lifestyle for him, complete with leathery tan, out of the hopes and dreams of people he apparently detests. If you don’t know who he is, Google him, he’s the poster boy for this mess.

 

Politicians blame the American consumer for consuming.

 

Socialists blame builders for building homes too big that cost too much.

 

Economists still cannot seem to agree on exactly what happened, let alone who did it. They admit they didn’t see this coming, don’t know what it is and don’t know how to fix it.

 

And, now a major fish-wrap, which I will not dignify by naming, comes out with a front-page article in which the headline says this was created by the goal of homeownership itself. Excuse me?

 

“Oooh, those homes are so seductive. Once I got a glimpse of her dormers and that cute little back porch, I just threw caution to the wind and thought, I don’t care if she ruins my life…she has a three car garage.”

 

I would have been content to keep my nose out of this except for one thing, now they’ve gone too far.

 

First, they blamed the American people themselves and now they are trying to characterize the goal of home ownership as being at fault for the nation’s problems.

 

Now, that strikes me about the same way as the oil execs testimony before congress when they said that there was no connection between record prices at the pump and the obscene windfall profits they were banking. It’s baloney!

 

Homeownership is a great goal!

 

For more than thirty years, I have been involved in the practice of helping people transfer title to real estate and to obtain financing secured by real estate.  Based on that experience, I know that homeownership is a worthy, if not the most important financial goal that any gainfully employed, marginally intelligent, reasonably stable individual could pursue.

 

But, in the real world, stuff happens. Jobs go away, careers go away, spouses go away, accidents occur, addictions develop, health fails, and as we now know…fortunes can evaporate. Not everyone will succeed because of these events. That does not mean that they shouldn’t try. And do what…..invest with Bernard Madoff?

Absent from the hysteria of the moment is any sort of balance or reason. We are deliberately being frightened by a bogey man who doesn’t exist. The people who drained away America’s prosperity aren’t greedy homeowners who wanted a third bedroom or to live in a better school district. They are the politicians, the wall streeters, and the CEOs who sold us out and who now seek to deflect blame from themselves. So far, they’ve done a pretty good job and been handsomely rewarded with bailout money.

And, I personally resent those with blood on their hands pointing at us and saying the American consumer wanted too much while in the next breath saying that the American consumer is the engine behind our economy, and if you don’t believe that, just look what happens when we stop consuming.

Being upwardly mobile, wanting a better neighborhood, and buying the things that are advertised to us are dependable American traits, not flaws. It is people who wanted a better life for themselves and their families that settled this country. Our market is the envy of the world. Every country that makes something wants to ship their crap to America.

The FACT is that American’s wages have been stagnant for years while the cost of food and fuel and everything else has been skyrocketing.  For most middle class Americans, “living within your means” is a cruel joke.

And now, the very people who exported our jobs, imported cheap labor, and made huge profits on everything from artificially inflated gas prices and the wars we’ve waged, to worthless investments and bogus accounting, want us to bail them out while they pretend that it was our fault.

Forget about toxic mortgages, they are small in number. This was fraud. Massive, and as yet, mostly undisclosed fraud on three levels: fraud at the highest levels of management and oversight, fraud by loan servicing companies who literally forced borrowers into default so that they could extract fees and penalties to which they were not entitled, and fraud by practitioners who dummied up phony buyers who either never intended to occupy the property or didn’t exist anywhere except on paper.

Many of the latter were perpetrated by vast criminal enterprises often involving foreign nationals or by people with ties to other countries, but because many of these people were members of the industry’s most prestigious organizations, nothing has been said about it.

Some of these frauds have already been uncovered and a few have been prosecuted.  But, like an iceberg, 90 percent of this is still below the surface because no one wants to own it and law enforcement doesn’t have the resources to investigate and prosecute every instance.

No single thing caused our current predicament. Costly wars, a vast wave of white collar crime, and a loss of jobs are all key players; but, one thing is certain, a handful of people profited while everyone else must lose. I don’t see where more people renting rather than owning would have prevented any of that.

The alternative to homeownership just concentrates more real estate in the hands of the wealthy.

Like most real estate practitioners these days, I spend a lot of my time talking about the uncertainty while reassuring potential buyers that buying real estate as part of a long term plan, is as good an idea today as it ever was.