Let's get the easy stuff out of the way:
- Willie Clinton was in office from 1994 until 2001;
- George Bush, or Dubbayu from 2002 until 2007;
- Barack O from 2008 until the present.
- Willie Clinton - Democratic president with a republican congress;
- George Bush - Republican pres with republican congress;
- Barack Oprah Obama - Socialist president with a democratic congress;
A. Great Housing Boon in the early 1990's. Clinton gave a directive that was published in the Wall Street Journal saying that Wall Street should lead the way to record lending. There should be a record amount of new home owners. Home prices were bought above list price. Pricings went through the roof;
B. 1996 - Sub-prime and Alt-A loans, stated loans, no income verification loans, no doc loans, stated income and stated asset loans become the bane to all of wall street. There are many contributors to this collapse. I think the biggest thing is the government telling the world that we're going to lead the way for homeownership whether the homeowner was ready to own or not. As a result contributions for the economic collapse came from:
- Appraisers guilty of inflating values;
- Lenders pushing clients into loans they really don't need;
- Consumers saying that if lender A doesn't approve them then they'll go down to lender B;
- Wall Street buying up paper that never was intended to perform;
- Title companies in the midst of flipping and fraud scandals;
- Realtors - the greed of the next deal over the best interests of a client;
- Our government - they paid no attention to the needs of banks or the consumers. They focused in physical crimes or crimes against man instead of white collar crimes;
- Lawyers - although there to protect, were often times found in the middle of a fraud scam and linked to a crooked title company;
C. After 1996, the death of the big banks came. Check out www.ml-implode.com. Since 2006, there have been over 374 major banks to bite the dust. I mean GONE!!!! Kapooey! Couldn't stand under their own weight. Pretty tough pill to swallow:
- First Home Mortgage;
- American Home Mortgage;
- and First Horizon to name a few;
D. Now the Government is all about control. The government should have prosecuted the crooks to begin with but failed to do so. As a result the whiplash is often extreme and over reaching. We now have the Good Faith Estimate reform beginning the first of 2010. RESPA reform and compensation changes are imminent for those in lending.
E. Is there any good news? YOU BET!!!!
- Most of the deadbeats and the dead weight has left the industry;
- New licensing regulations as the National Mortgage Licensing System will create a higher standard for lenders who want to be in the industry;
- Relationships are more important that ever before. Therefore, getting with referrals sources and adding value is imperative to great success in this next decade.
R.E.O. Speedwagon has a song called "Only the Strong Survive." I know that this has been true over the past couple of years. I think that the title can be changed to say that only the strong will thrive. I think that if you're adding value to your clients and to your referral partners, you will THRIVE in 2010. I'm game and I'm ready. How bout you?