While immersing myself in the latest development in our foreclosure dominated markets, I keep running into this feeling–while markets mechanically function as they always have, we’ve somehow lost our way.
Which direction is “the way out”? Here are some disturbing, disorienting trends:
- Signing a mortgage agreement doesn’t seem worth the paper its written on–if anyone can just look at their biggest single financial commitment and say “I quit” or “I made a poor decision at the wrong time, so I quit.”
- Holding clear title to property is called into question because the mortgage industry and its vendors have been short circuiting legal process to “foreclose and move on.”
- Name calling and finger-pointing in the real estate industry has taken on the tone of cable news political commentary–at its worst.
- The best answers from industry experts and national leaders to what to do about the “robo signing” flap are “it won’t be so bad” or “beats me.”
This is a great industry with a long history of being at the core of the American economy. But something new has happened lately. You can feel it. We are in more than a “down market.” We’re in a transforming time for or industry.
The “market of the moment” is feeling more like the market of a decade, counting from early 2007 through at least 2016. Before it is over, half a generation of agents, lenders, loan servicers and title and escrow professionals will have grown up knowing little else but what we see today.
Am I over-dramatizing the situation we’re in? OK, so a tree always seems bigger when you’re standing right next to it. But, today’s reality is big. It will change a lot of mindsets and practices for a long time before it’s done. And that will be a good thing.
My old real estate coach used to say “the only thing wrong with the real estate industry is it’s too darned easy to get in.” He’d been a broker and agent for 30 years and he was saying that years before the crisis. Now more and more people are saying it ought to be a lot tougher to be an agent, it ought to cost more, and it ought to be a lot tougher to keep your license once you have it.
In addition, what about some ideas like these–on the national level:
- Standards and practices codes enforced for lenders, loan processors, and loan servicers.
- Standards for appraisal including a process for appeal and decision.
- Standardized credit scoring.
- Consumer disclosure standards for the real estate sales, lending and title businesses.
Together we are driving a trillion-dollar industry called real estate sales. This is a high-profile high stakes profession (as it turns out.) Maybe the real estate licensing exam should feel a little more like a bar exam. Not a week goes by when I don;lt hear a tale from a responsible agent about a fellow agent who “knows little or nothing and doesn’t seem to care.”
Wall Street got financial reform legislation. Enough? Too much? It’s debatable. What about that “other financial services industry”–real estate?
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