It’s Christmas … and poor Lloyd is still alone

Lloyd Kurtz

It’s the holiday season.  Friends and families get together to share meals and parties. It is that time of the year. Some folks are at the end of the line, they have outlived most friends and families are more involved with themselves than remembering the older generation.

Lloyd Kurtz lives in a modular home in Myrtle Beach, SC.  He moved there after a long career as a plumber in the DC area.  Lloyd was married and raised two daughters.  After moving to South Carolina, he and his wife enjoyed the company of two of his wifes sisters and an occasional visit from his daughters.  One daughter got married and was juggling a career and raising a family, while the other daughter limped through one failed marriage and several relationships before remarrying again.

For the longest time, the only time Lloyd got to spend much time with his daughters was when he made the drive north.  Years passed and that drive got longer and longer.  He is past 80 and last year he made the trip one more time.

The professional daughter has made a few trips with her family to visit.  The other daughter found herself divorced again and is too busy with her life here to be bothered with driving to South Carolina.  Those trips ended when her last husband walked out the door.

Lloyd isn’t hard to find.  He lives on Horseshoe Circle. If you are in Myrtle Beach area over the holidays, maybe you could drop by and sit on the porch with him for a spell.  He lost his wife, his children don’t seem to care and within the last couple years he had to sell his boat (it was to hard for him to get it hooked up and then to take it down to the river and launch it alone.)

He still tends to his garden and beautiful blooming plants.  He putters here and there making sure things are ship shape.  He is a kind man.  He is a veteran. He is a father. He is a grandfather. It is the holiday season. He is alone.

If nothing else, keep him in your prayers.  There but for the grace of God go I…

It’s time to stop blaming the lenders

Before we take the entire banking industry to task on the foreclosure mess, it bears reminding that the source of the problem is people who bought homes they couldn’t afford. Let’s blame them, too.

As even Shakespeare might have told us, when caught in a jam, blame your lender. No one loves a Shylock, and they’re pretty much the easiest target going in these financially troubled times. But have we really come to that — a default position that it’s always the lenders’ fault? Apparently so, and we should be ashamed of ourselves.

Allow me to get a few things out of the way before I receive the anticipated full-throated responses to my suggestion that the blame-avoidance culture in this country has finally jumped the proverbial shark.

One: I am not a righteous fiscal (or social) conservative, spouting self-reliance. People make mistakes and they also experience sudden turns of fortune. But I find it very hard to process the notion that the onslaught of foreclosures in this country does not have more to do with a failure of conservative financial planning than with some insidious criminality by lenders. My wife has wanted a bigger house for years, but we have chosen not to buy one. Why? Because we couldn’t afford it.

Two: Like most rational folk, I take issue with outright fraud. If laws were broken, send the crooks to jail. That said, I’m amazed that the country has congealed into the belief that every single borrower who signed a mortgage document has an escape hatch that somehow puts blame on their lender when they can’t pay their debts. While I am much more inclined to believe that buyers of so-called securitized debt instruments might have been defrauded by their packagers, I am at a loss to understand how so many individual homeowners signing loan documents for debt they could ultimately not afford were somehow the victims of a crime. We used to say that there was no free lunch. Now, we’re demanding a refund when we didn’t even pay for it in the first place.

Three: I wrote a book about Jamie Dimon called  Last Man Standing. In it, I praise him for a sense of ethics often found lacking in financial services CEOs. And yet this week, JPMorgan Chase (JPM) is taking the brunt of a populist firestorm that is shocked – shocked! – that the processing of millions of foreclosure documents may have taken on somewhat of a robotic quality. Again, I take no issue with the requirement that we all follow the law, and if JPMorgan Chase or others broke it, then they should pay the appropriate price. But the law also holds that people who default on their loans must forfeit the property pledged as security. It’s as simple as that, and Dimon agrees. “We’re not evicting people who deserve to stay in their house,” he told shareholders on Wednesday.

Blaming others for our excesses

Back to our main point, though: in this remarkably blameless moment in American history — it’s not my fault, it’s not yours, it’s not anybody’s but some corporate bogeyman’s — have we not lost the forest for the trees? It’s okay that people made the mistake of borrowing more than they could afford. But is it really the lenders’ fault? Really? Maybe the banks didn’t deserve to be bailed out for their own poor judgment, but do the rest of us really deserve to bailed out for our own?

Forget about the oft-mentioned fact that we’re in the midst of destroying our long-held beliefs in the notion of property rights and contract law. Does anyone realize what a bunch of babies we must look like to the rest of the world? As Bethany McLean and Joe Nocera point out in their new book, All The Devils Are Here, there’s more than enough blame to go around, and the American public is well past due the time for accepting its own share.

Should we be concerned that a foreclosure freeze will delay the recovery of the housing market, as Dimon recently said? I feel that’s missing a different forest for a different set of trees. President Obama may have disappointed a lot of people in a lot of different ways, but the idea that he – or any president – could instantly heal the wounds from a generation of excess in this country is absurd. These things take time, people. Throw the scoundrels out of office if you want, but their replacements won’t be able to speed up the cleansing.

In the past, I was always amazed whenever I visited people in London or France at how small their dwarf-like refrigerators were. How do you keep all the food you need, I used to ask them? Now I realize that the fact that I was recently compelled to buy a freestanding freezer for my basement is just a fitting symbol of our need to have more, more, more. Maybe we don’t need restaurant-sized fridges in our own homes. Or, for that matter, 4,000 square-foot homes in which to put those fridges.

Bring on the vitriol, because I know it’s coming. But for God’s sake, people, buck up. China won’t lend to us forever, and when they turn off the tap, we’re really going to feel what it’s like to face up to our own spendthrift ways.

 

Posted by Duff McDonald, Contributing Editor CNN Money

October 15, 2010 7:00 am

I have to thank Duff for allowing me to repost this in its entirety. The message is on the mark!

 

 

Behind the scenes perils of 2010 in real estate….

Bad enough that prices are unstable

Well, unless you are on an island with no access to the outside world, the news about real estate for the last few years has been rather disconcerting.  If you have been on that island, stick around…you ain’t heard nothing yet!

The public perception is that housing prices have fallen a great deal and they will continue to fall. Some people think that when the dust clears, the owner will pay you just to take the damn house off their hands.  People in supermarkets avoid eye contact with one another.  You can never be sure if your neighbor has just stopped paying their mortgage and their actions will reduce your equity to pennies. The fear of a possible break-in has been replaced by the fear that you will end up homeless on the street.

The public clamor is only the tip of the iceberg

The things that are going on behind the scenes, the way things are being done now and the new world of real estate transactions make the public information tame by comparison.  While the focus has been on what happens to a nation when good loans go bad, the entire industry has stepped behind the curtain and changed in ways that adversely  impact the consumer.

Don’t look to just any real estate agent still in business to sort this out for you.

Darwin did not consider real estate agents in his thesis

There are so many things going on that it should be noted from the outset that the skill level of real estate agents has little to do with their survival in recent markets.  This is a fact.  Regardless of the number of post cards they send out and regardless of how many times they crow that they are in the top 1% or 5%  of real estate agents in the world, agents are at the mercy of the public.  Real estate agents live and die on the basic truth that they will be chosen if they are available when a need arises.

The disdain that most agents have for doing things such as floor duty or cold calling leaves the public in the hands of agents that have no desire to do anything but sit at a front desk and play free cell on the office computer. The person that answers the phone when you call a real estate office is probably not the best and the brightest…but they are available.  The person that calls and gives you a song and dance about having a buyer interested in your neighborhood is not necessarily the best person to list your house (in many states, they can not list your house if they represent the buyer that wants to buy your house).

No, many of the agents that are still in business only have one skill. They have managed to be in the right place at the right time, one transaction at a time. So much for survival of the fittest.

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Banks above the law

Not picking on Bank of America (although their name is a true oxymoron),  just grabbed their picture. I could have stuck any federally chartered bank in that slot.  You see, real estate is governed pretty much by local laws.  Each state has laws that govern the practice of real estate .  These laws impact consumers.  Most people expect local laws to be followed.  Well, the federally charted banks don’t see it that way and there is not one Governor or State legislative body that has the chutzpah to stand up to them.  Once they own a property, caveat emptor becomes the law. It goes beyond “let the buyer beware”.  Banks have a practice in place that clearly states … let the buyer be damned.

You are on your own buying this property!

Little things like lead paint disclosure and property condition disclosure/ disclaimer are totally ignored by banks. If you think you have a ratified contract with a bank, check the small print.  They reserve the right to keep on accepting offers up until the moment you sign on the dotted line at closing.  If a better offer comes in the night before, your offer can be rejected.

You probably have heard the term short sale. Most people think the term refers to the price being short of the amount owed on the property. NOT TRUE.  The word short refers to the amount of common sense used by the people that have to review the offer and assist in completing the transaction.  Firms like Wells Fargo have so many departments, it is a wonder they ever accomplish anything. The policies in place in these large lenders do nothing more that feed the frustration of home owners in trouble and paralyze the attempts of all those attempting to accomplish the sale.

The world wide web gives and takes away

No one is minding the store

The spiraling out of control housing market is spinning next to the tremendous growth of the internet and use of the internet to facilitate real estate transactions.  It is scarier than the wild west.  Rules are created and abandoned as the use of the web increases.  The NAR is more concerned with Joe Smith using the term Realtor in his url than they are with the fact that agents are stepping outside accepted practices with no regard for the buying public.  These internet savvy hot shot agents have no concern for the everyday practice of real estate.  They are focused on volume and squeezing every dollar possible out of every transaction.  They are not members of the profession because they want to work in a field of service, they are here to milk money out of any cash cow that might wander onto their website or in their door.

Pretty harsh?  Not really.  There was a time that a buyer could have their agent prepare an offer on a home and the agent could register and deliver that offer.  Then the listing agent would be required to present that offer within a reasonable period of time to the seller.  Now agents feel comfortable requiring that offers be entered into their internet system. There is no agency governing this practice. There are no provisions for how offers falling through the internet cracks will be recovered.  There is no way of knowing whether or not the offer is actually received.  And should an offer get lost….well too bad.  There is no penalty.  Governing bodies have not even addressed the issue.

Ask the agents why are you doing things this way….oh, it is the banks. We have so many listings, we just can’t keep up.

The one thing that is true about the market … there are a lot of houses for sale.  Good luck if you are thinking of trying to buy one.  Remember …. caveat emptor.