I'm a broker, and play the piano. Unlike Nero, who fiddled when Rome burned, I'm commandeering the fire truck and only have a bucket of water. Although I devote most of my energy to computer and internet related issues. I've been Ray Bouder Real Estate Schools web master for five years, and have built many webpages for realtors and other businesses over the last ten years, most pro bono. My father was a real estate agent with Marx and Bensdorf when I came into the world. My great uncle, Frank Romeo, was the president of the Memphis Homebuilders Association. The profession has always been a part of my life, and I never generated more enthusiasm for it than when I began to see the horrific greed and corruption perpetrated on the homeowners locally and nationally over the last decade. I've given of my time and energy tirelessly to realtors and their concerns all over Memphis and the Mid South and I would take offense if any realtor would challenge my loyalty to the real estate profession. Music is also a great passion of mine. I'm a pianist and a composer and I'm privileged to have received some fine honors from our local government, including the adoption of two songs I wrote as the Official Songs of Memphis in unanimous Memphis City Council resolution by proclamation.
It is my intention this day, and every day, to battle the greed that takes place in our housing industry as a whole. When I see local realtors at board meetings complaining because not enough people in our profession are contributing to support the legislation that the Realtor Political Action Committees are seeking I don't just see a local board reacting in support of it's own needs, I see a local board seeking the help of a local body supporting the need of a national body of realtors. When one realtor, closing attorney, lender, appraiser or anyone else in the housing industry commits a disgusting act of greed it affects everyone in the industry, not just the local market that some realtor board leaders and lenders want to shroud with distinction apart from the body as a whole.
I'd analyze the market before placing my name on a contract without absolute confidence and assurance that I'm working with someone of unquestionable integrity. I have nothing to hide, and my past is in a glass house.
Regulation of financing is a necessity in view of the many callous and thoughtless misrepresentations that have occurred at the hands of unscrupulous and greed driven lending institutions. When lenders exceed qualifying mortgage caps for their borrowers they knowingly place their clients at the risk of foreclosure. We now know that realistic rates should remain in place in order to make financing more affordable, not just for the borrower, but to lower the risk for the lender. If debt to income ratios exceed realistic limitations the outcome is predictable with almost certain accuracy. This is especially true when qualifying a buyer for an adjustable rate mortgage of either a fixed or hybrid type, such as a loan with a teaser rate of 4 percent for two years that explodes to 8 percent or more when the introductory rate period expires. The ensuing payment shock inevitably decimates the borrower, increases the debt to income ratio, depletes their cash reserves, depletes escrow, creates negative amortization, and eliminates the possibility of refinancing because the debt exceeds the value of the home. These are precisely the reasons why we need legislation such as HR3915, the Mortgage Reform and Anti-Predatory Lending Act of 2007, to protect our most valuable asset, our homes. Lenders should undergo rigorous training including continuing educational opportunities required by law and local and state financial regulatory boards. Local, state and national governments should require greater levels of skill and attentiveness by lenders when excercising discretion and prudence when qualifying a borrower. It is the utmost responsibilty of our lenders and our banks to protect our borrowers, and to protect your "investment", which "is" their money until you receive a warranty deed and a satisfaction of mortgage document.
I'm not blaming realtors, lenders or others in our profession for all of the problems. I am suggesting that a forum such as this be used to address the problems facing the nation rather than camouflage the occasion with cheerleading the industry. If I had wanted to be more specific I could address the horrific issue of mortgage fraud and predatory lending of which hundreds have been indicted nationally for their roles, including recent real estate fraud indictments and sentencing of Memphis Realtors, including their closing attorneys, straw buyers, dozen of their affiliate agents, appraisers and mortgage brokers, who prepared false documents which defrauded our banks out of millions of dollars.
I blame those who refuse to recognize the advancing financial horrors affecting the liquidity of investors all over the world. I blame the government for starting this crisis which began ten years ago with the artificial inflation of property values so that the tax assessors could tap the higher equity in our homes for more tax money. It was easier for the government to do this, to increase our property values rather than our property taxes, rather than face more opposition from angry homeowners fighting higher property tax percentages divided between the city of Memphis, the Shelby County government, and many other cities and townships throughout America. The two tax rates imposed on Memphis homeowners have been a constant source of confusion and should be combined into one rate.
I keep a vigilant eye on market conditions, I have for many years and I knew that this current disaster was within a stones throw after record tax appeals in 2000 and 2001.
A realtor board member commented to me recently: "Maybe you should spend more time studying the market conditions and trends and you would realize that Memphis has been #1 in FHA foreclosures in the US for almost 20 years and that will continue with the education level we have in the Memphis Area. "
I've always preferred gentle reasoning to strong arm logic. Why not begin educating the community to reverse the alarming trend?
I recently read the National Association of Realtor's price analysis for the Memphis Metropolitan Region. I'm fully aware that sales activity is down and that the NAR is attributing this to an issue of confidence. I agree with this distinction in view of the state of the mortgage industry and the fact that closing attorneys, appraisers, straw buyers and lenders are being carted off to prison by the busloads. Other factors such as crime, high property taxes and corrupt government may also play a role in reducing the confidence levels of the community. Ask anyone in my company that knows me and they'll probably tell you that I tirelessly research market data well into the night, many of them sleepless nights to have the edge I need to bring up shattered confidence levels. I receive daily reports from industry watchdogs all over America in addition to the treasury department financial crimes reports ( FINCEN reports). I subscribe to many mortgage fraud reporting groups as well, and vigilantly pursue the information to determine the extent of the problem locally and nationally. My company will also tell you that only once did I ever miss a sales meeting and it was because I was sworn in as the grand jury foreman pro tempore for three months on the Shelby County Grand Jury and had to review cases on that day, which happened to be our Thanksgiving luncheon.
Another realtor comment to me recently is that: "The main lesson you should learn is that real estate markets are all local and whatever is happening in one city does not always apply to another."
What I'm addressing is national in it's scope and impacts the nation, although there is great concern locally for solvency and liquidity in view of the recent tragic bankruptcies and foreclosures of many mid-south area homebuilders. Rapidly declining prices along with the increased housing inventory is reaching catastrophic proportion. Many properties are now in the hands of the banks, bankruptcy trustees, state, local and county government and sit for months without interest and ignored. Enough negative stuff creating enough depression to fill up a psychology clinic. I wonder sometimes if psychologists found a windfall in this market.
Real estate agents, attorneys and lenders must be prepared to answer questions about real estate financing, foreclosure, title theory, the RESPA, inspection issues, predatory lending matters, brokerage, deeds. property law, listings, agency and disclosure issues, real estate math, sales contracts, Tennessee real estate laws or the laws of your state, leases, appraisal issues, fair housing and the NAR code of ethics.
I've said this many times:
"Owning a home should never have to be a "dream" for anyone. The responsibility of every legislator, real estate agent, lender, closing attorney, homebuilder or anyone in our great profession is to make home ownership a "right" & a "reality", in conformance with fairness, the principles of sound ethical judgement, justice & the laws of our nation."