Bailout: A $700,000,000,000 Satire
Let's spread the bailout wealth the way we spread the greed!
It really is too bad that no one foresaw (wink) this economic meltdown that everyone says started with the massive flood of defaults by borrowers whose interest rates and payments had doubled and tripled. We never should have trusted those millions of home buyers! The 20/20 hindsight version is that these modern-day peons should never have aspired to owning their own homes in the first place. We all know these people are too stupidly reckless to read the fine print and do the math, right? They are the bottom-rung types that should be grateful for the largesse of those altruistic landlords who allow them, as renters, to build the landlord’s real estate portfolio. Any landlord will tell you renters are just second-classers sent by the devil to destroy property and jeopardize the landlord’s finances by sending the rent a week late. If people can’t afford their own home they must not be very good with money, and thus inherently inferior to property owners, anyway. Don’t you think?
Some folks are just born to be renters. Yet back in the day, with homes appreciating at a deceptively fat and sassy rate, here were these low-to-middle income American dreamers lining up at real estate brokerage doors and jamming their phone lines, eager to get on board the subprime express, and sign on for that eternity of weekend chores that defines home ownership. They were confident in the encouraging words of their president, G.W. Bush: “Homeownership for all Americans!” (This is sort of like the " A chicken in every pot and a car in every garage" promise made by Herbert Hoover in his 1928 presidential campaign....just before the decade of harships brought by the Great Depression.)
But real estate professionals believed it was possible, too. It was a wonderful thing to believe in; both profitable and patriotic! Brokers stepped right up to the challenge of helping those deluded wanabees have their pulses verified at the door to the mortgage company, and thereby secure a loan.
So for a while, everyone was happy as a drunken monkey, celebrating their success and prosperity, and gratified by their savvy real estate purchases. The proud new homeowners hadn’t yet realized they were basking in the glow of their financial well-being going up in flames. The thriving mortgage companies gleefully ‘packaged’ up bulk mortgages at the end of each red hot month and the end product was raffled off as securities to the slavering investors who rounded out the gravy train. Brokers knew, back in those orgy days, that it was hard to get any closings or service from lenders at the end of a month….they had mortgage backed securities to cram into grab bags and sell to the highest bidder. No time to sort those packages for risk, either.
Let’s not forget how elated the credit card companies were in those halcyon days. New homeowners were showered with introductory credit bargains…. that came with twenty pages of fine-print clauses and caveats no one bothered to read. All legal, my friends. Buyer didn't beware, and now you're stuck with bills it will take years to pay off.
And real estate agents were very happy, too. The only fly in their ointment was that everybody’s cousin got a real estate license and started crowding the field with newbie inexperienced agents all wanting a piece of the action. I might add that real estate professionals had the added windfall of established homeowners, who were well on their way to paying off their mortgage, deciding to cash in on the feeding frenzy and put their homes up for sale. They had so much equity, and money was so fast and easy, they too were able to sign up for funky adjustable rate mortgages and move up to mansions they’d never dreamed to call their own. They could have just moved to a nicer home, with a 30 year fixed interest home loan…..but they wanted more. Everyone was doing it.
Brokers got used to the fine life that multiple commissions delivered. They began to band together in “Groups” and “Teams” in order to convince clients that they knew what they were doing when they assured the buyers nothing could go wrong; the buyer could refinance into a 30 year fixed mortgage in a couple of years. Agents worked hard, long days…..trying to fit all this money-making activity into their lives. Brokers expanded offices, invested in technology, the stock market, bought new cars and homes, and they did a lot of it with credit…. & credit cards. They travelled to exotic places. And of course, real estate agents also jumped into the rental housing market.
Have a good laugh....
SAVE THE AGENTS!
You might imagine that with brokers throwing so much new business in the path of loan officers, it became sweet and easy for agents to land one of those high risk loans, and buy up property, or leverage their own homes to move up into the ritzy neighborhoods. Loan fraud? I wouldn’t be the one to point fingers, but as I often heard one broker state: “there are no mortgage police”. (Oooops…there are now and they’ll get around to bent real estate agents sooner or later, I fear.) You would think those who monitor and make their living in the housing market would know better, but they didn’t. It’s against the law and a broker will almost certainly lose their license if caught. Or they were willing to take the risk in the name of investing for retirement? Who could resist? Banks were for pessimists.
When the market softened and slowed, then when foreclosures echoed like slammed doors through entire neighborhoods…..a lot of real estate agents began sinking into the mortgage quicksand and now they are losing their assets. Their rentals, their own dwellings, their credit cards, their cars. They can’t afford Mexico this winter. These troubled brokers are really hurting. And all they did was follow the trend. It’s not their fault.
So I put forth the proposition that as long as we’re bailing out investment banks, stuffing money into solvent banks, and talking about assisting borrowers and bolstering the auto industry….. we should also consider alleviating the suffering of real estate professionals. After all, they didn’t do much different than the mortgage-end victims who are getting a cushion and leg up from the Feds. They handled their business with the same amount of prudence and foresight as upper management at countless investment corporations and conglomerates, and the CEO’s at the Big Three auto manufacturers. If brokers all go out of business who will be there to perform professional services when the housing market recovers? Shouldn’t the real estate sector get a slice of the $700,000,000,000? Why should they be forced out of business while everyone else who "misjudged the market" climbs on the life raft? Real estate agents deserve a restorative resort vacation in the Caribbean, too! And instead they’re in danger of becoming……renters.
Disclaimer: Yes dammit, this IS satire!