Saving the Subprimes: the Brochure
I received a curious press release in the email today from the National Association of Realtors that I thought I might share. Headline: NAR Partners with the Center for Responsible Lending and Neighborworks America to Keep Families in Their Homes.
My immediate reaction: Come on! So here are all the realtors, who made enough money during the housing boom to put themselves in corporate branded HumVees (I actually saw this in some small market in Florida… made me slightly ill), partnering with genuine community activist groups to help "save" the same people that they played a part in getting into deep water in the first place (how's that for a run-on runoff at the mouth!).
Before all you realtors start slinging lockboxes at my head, NO, I don't blame realtors for the subprime crisis, and they are certainly not on par with certain shady mortgage brokers and subprime lenders, but they did help fuel the fire in the housing market unquestionably.
They were the ones pushing up the prices by juicing up buyer competition. At the height of the boom, realtors would put lines in ads like, "Buyer will be accepting offers from noon to 4 p.m. Tuesday" which was basically saying, this property is so hot we will decide when and how you can offer us more money than you can possibly afford.
So now the NAR is putting out a "brochure" (sorry, the "fifth mortgage-related brochure in the NAR's consumer education series"). The brochure "illustrates examples of mortgages that can put certain borrowers in danger, cautions consumers about predatory lending practices, identifies housing counseling organizations and other resources and suggests steps homeowners should take as soon as they think they might not be able to make a monthly mortgage payment."
I ask, where was the brochure 12-18 months ago? Was this brochure on the entry hall table, next to the specs on a two-bedroom condo in Las Vegas that was on the market for $200,000 more than it was when the speculator-owner bought it two months before?
Was this brochure part of the scads of marketing paraphernalia the local realtor gave to the drooling seller in San Francisco? Was this brochure available at any number of the local mortgage broker offices that situated themselves in subprime borrower bastions? Um, that would be no.
But it's here now. Now you can read about all the trouble you're in, and now the realtors can say that they're doing their part to keep Americans in their homes, because "foreclosures threaten the very communities that realtors work to build," says NAR President Pat V. Combs. They also threaten all those sales and all those commissions.
Questions? Comments? RealtyCheck@cnbc.com