Am I the only person surprised that everyone is in shock over his or her current financial situation? I live in the Metro Atlanta area where Real Estate has been a booming market until recently. Everyone has theories as to what has gone wrong.
AC writer CR Cataunya Ransom recently wrote an article entitled Inside the World of a Foreclosure Rescue Expert and the Mortgage Industry’s Dirty Little Secrets. In her article, she tells a tale of over inflated homes and greedy loan underwriters. I love how she refers to the Mortgage Underwriters as Drunk Drivers and the Customers as the stupid passenger who gets in the car. I cannot argue with her assessment at all, though I think she stopped short in placing blame.
When I moved to Atlanta about six years ago with my husband’s ex-job, a Real Estate agent assigned to us by the company greeted us with open arms. She likes to call herself our Realtor-for-Life, though we did not ever agree to that distinction. She knew how much money we made and how much we had to spend. She pushed her hardest to get us to purchase the biggest most extravagant house that our money could buy. After all, she had her eye on the prize… commission.
She humored us, and brought us to homes in the price range we had chosen, while trying to temp us with images of country clubs, and extravagant Golf communities. After all, the company was paying the closing costs and down payment on our home. Our only concern should be what we could afford to pay each month. Right? Wrong. Fortunately, we knew better. We knew we didn’t know enough about the Real Estate market in Atlanta to buy a new house. Therefore, we rented a house instead and did our homework.
Our self-proclaimed Realtor-for-life kept in touch with us for the year it took to decide what to do. The buyers market (at that time) allowed us to build a very nice house for just under half of what we were being told by both the Realtor and bankers that we could afford. They were pushing half million-dollar homes and interest only mortgages while we settled on a much lower house price and a conventional mortgage. She thought we were crazy, and so did other people who were making the same money and living a lot more extravagantly. Yeah, we were crazy all right… crazy like a fox.
Fast forward several years. Like many of people around us, we are faced with lower incomes and higher expenses. Unlike many of those around us, we are not worried about losing our home. Sure, money is tightï¿½â’¬ï¿½ very tight. Sure, we have cut back in many places and are in a juggling game, but we really do believe we can ride out this wave of a recession that the Atlanta home market is going through.
As for our Realtor-for-life, she is still circling us like a shark. “I heard there was a job change?” “Do you need to sell?” “I am always here for you”, she exclaims hoping to be the person to list our house for sale to one of her clients looking to downsize. What she does not know is that in the time that we have lived here, we have met another Realtor who has helped us purchase rental houses and who looks at our long term well being. If we ever did need to sell or buy another house, she is the one we would call.
Meanwhile, many people are in shock because they are finding themselves in a mess. As interest-only mortgages convert to high-interest loans, they find themselves unable to swim with the current, or to understand what went wrong. To paraphrase CR Cataunya Ransom, they were the “stupid passengers” that got into the car with the “drunk-driving mortgage lender”. Nevertheless, if the customer is the stupid passenger, and the mortgage lender is the drunk driver, then the real estate agent, in many cases, is the bartender tempting the buyer with more than they can afford and delivering the mortgage broker more stupid passengers who they can take for a ride.