FORECLOSURES !

Who is at fault for the current mortgage crisis and real estate crisis and what did they do to cause it?

We are having a huge mortgage crisis and real estate crisis where millions of people are all of a sudden losing their homes to foreclosures and real estate prices are collapsing.

Also real estate buyers cannot get mortgages on homes that they want to purchase.

This seems to have happened all of a sudden.

It was not long ago that homes were being bid up at ridiculous rates with multiple offers and huge overbids.

Financing was readily available.

All of a sudden home prices are collapsing, there are foreclosures everywhere you look, and lenders will not give you financing to buy a house even if you have excellent credit and a large cash down payment.

Who caused this problem?

How do we solve this problem?

How do we make certain that this problem does not happen again?

One of the big problems that I see in the mortgage industry and real estate industry is the lack of training of loan officers, mortgage brokers, and real estate brokers.

These people command huge fees. Their fees are far larger than my doctor’s fee or my attorney’s fee.

We can blame the people who accepted these overpriced mortgages and overpriced homes, however that is like a surgeon blaming the patient for accepting surgery by the surgeon that later proved unnecessary or harmful.

The real estate brokers, mortgage brokers and loan officers are adamant about calling themselves professionals.

I know, recently I told one, (who was trying to convince me to sell my house and pay him $60,000 to do it) that he was just a salesman and nothing more.

He became very huffy and said in a very loud voice “I AM NOT A SALESMAN, I AM A PROFESSIONAL!!”

If they want to hold themselves out as professionals with some level of expertise, they had better act like professionals.

A good comparison is the practice of medicine. Back in 1900 doctors were as poorly trained as real estate agents are trained today.

Doctors were little more than salesmen of largely worthless remedies.

Dosctors were trained in diploma mills that gave them only very superficial training and an impressive looking piece of paper to hang on thir wall as proof of their supposed expertise.

A man named Flexner did a report on medical training in the United States. The result was that the diploma mills were shut down and all medical training was conducted at a very solid University that had to meet a long detailed list of requirements if it wanted to retain its approval as a medical school.

After the classrooom training, the student was also required to serve for a period of time as an intern to get hands on training in addition to the classroom training. The intern has to meet strict performance critetia and his performance as an intern is closely monitored and evaluated.

The student does not pass from the internship until he has shown the ability and determination to meet some very high performance standards.

The closest type of training that I have seen in the real estate industry is The Appraisal Institute.

The requirements for the MAI designation are a substantial period of rigorous classroom training and a minimum of 4,500 hours under the supervision of an MAI appraiser and the requirement to have his work reviewed by a committee of MAI appraiser before he receifves his designation. The 4,500 hour requirement is the equivalent of approximately 3 years as a student under the supervision of a highly qualified appraiser.

We need to establish a similar trainiing program for real estate brokers, mortgage brokers and loan officers.

We need to shut down the diploma mills and have real estate education at accredited Universities and Institutes such as The Appraisal Institute.

That way we will turn out people who actually are professionals instead of poorly trained hacks who are merely salesman claiming to be professionals.

This is reasonable to expect. Where I live, the average house sells for 1 million dollars. The typical 6% real estate commission is $60,000. That is far more than attorneys and doctors charge!!!.

If the real estate agents are going to charge fees like this, it is about time that they started earning those fees.

This mortgage crisis and real estate crisis has had a negative effect on all of us, not just the poor homeowners who are losing their homes.

For the ridiculously large fees that the real estate agents and mortgage brokers are paid it is about time that we started expecting a much higher standard of performance from them.

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