I know we’ve covered this before, but with several letters this week, let’s go over it once more please, and this time with emphasis. If you’re savvy enough to read between the lines coming at you constantly from most news outlets, you’ll notice a widespread and not-too-subtle lie being spread by my arch-nemesis over at Big Bad Banking: “Subprime borrowers with their lazy payment habits, sketchy job histories and poor command of the English language are quite literally responsible for the entire global economic downturn.”
The next time you hear one of these button-downed, bonus-pampered bigots speak this trash, either stand up and scream “Liar!” or send them my way. These revisionists seem to have constant access to CNBC, the Wall Street Journal and Fox News, which shouldn’t really surprise us.
Even the hallowed halls of the USD Burnham-Moores Real Estate Center were soiled last year by the Big Bad Banking’s PR manure spreader, when OneWest Bank foisted the subprime scenario on the glitterati of San Diego’s real estate think tank. I looked on dumbfounded as those gathered “drank the Kool-Aid” being served them by a OneWest SVP who conveniently forgot to mention his bank’s roots at Goldman Sachs, the sweetheart deal they wrangled from government regulators when they scooped up Indymac and how their “losses” from mortgages were all but covered by you, me and the FDIC.
Once and for all: Subprime mortgages are a statistically insignificant total of all U.S. mortgage obligations and worldwide, they’re not even a blip. As a percentage of total mortgages, their numbers swelled during the Bush Administration who made getting more Americans into homeownership a core tenet of its domestic fiscal policy. A good idea, right? Read on.
What we didn’t know at the time – and I doubt Prez Bush understood this either – was the loans created at the behest of our government’s overlords in the finance industry were necessary fodder for the massive credit default obligation (CDO) schemes our trusted Wall Street Bankers were about to spring on world investment markets.
These loans were “tranched” and packaged into the now-infamous mortgage backed securities, sold, resold and sold again.
That’s who and what created this mess, but we have ourselves to blame, too. When times were really bleak – with Merrill-Lynch teetering, with Lehman Bros. dead and the Big Four (Wells-Fargo, Goldman-Sachs, B of A and Chase) circling the drain – you and I bailed them out free of any obligation to significantly assist us taxpayers/homeowners! Wasn’t that extra nice of us?
These people – our neighbors – who were lured into loans they could not afford if the economy even hiccoughed, are not the cause of our problems today. They are victims in a colossal, Katrina-sized redistribution of wealth perpetrated by the places we all still bank at. These folks deserve another shot at homeownership. The real estate industry, me included, our government and our banks have let them down.
Again, credit unions and locally-owned small banks are the answer. If we’re to head off further abuse by a finance system intent on the short-term gain for a few at the top, rather than the long-term financial health of everyone else, we had better make sure our loans are directed to lending partners who will do their best to insure our client’s investments.
Like Dorothy Gale finally figured out, “You don’t have to look further than your own backyard.”
More of banks behaving badly
As Americans file their taxes and conduct cursory inspections of their credit reports, many are finding that the short sale they concluded is listed as a foreclosure on their credit reports. The difference between clearing a short sale off your FICO score and the more damaging foreclosure might be five years or longer.
If you run into this, be sure to correct your credit file immediately and remind the credit reporting agency that they have just 30 days to investigate and respond to you. You should make your claims in writing to all three bureaus and send them via Certified Mail with a return receipt requested.
• Equifax, PO Box 7404256, Atlanta, GA 30374-0256
• Experian, Dispute Dept., PO Box 9701, Allen, TX 75013
• TransUnion, Consumer Solutions, PO Box 2000, Chester, PA 19022-2000
Jim Abbott is the President/Managing Broker of ARG Abbott Realty Group DRE LIC 1843472. He serves on the Board of Directors of the Nat’l. Assn of Gay and Lesbian Real Estate Professionals. He is a former board member at EQCA, SDAR, CAR and a past Library Commissioner for the City of San Diego. He can be reached at info@argsd.com or at his downtown office where his adult children pretend to let him run the company.
