Since it is a holiday, I thought we could try something a little different.
When I first saw the cartoon above, I could imagine the final scene played out in millions of households across America as the bubble deflates. At some point, it will become painfully evident to each family that they are about to lose their home. It will not be a happy moment.
How do you feel about that? Sad, mad, glad?
For the undereducated and poorer folks who never really understood what was happening, I have a lot of sympathy. Enough for a bailout? Probably not.
For the typical upper middle class social climber who was so smug about their housing profits? Let ’em burn, baby.
For me, their attitude determines my sympathy level. Some of these people were truly babes in the woods, and were unfortunate victims of a swindle.
Consumer education is key here –
Every high school student should have an entire semester on personal finance/mortgages/contract law etc. Not knowing these things has destroyed enough lives that their inclusion is almost morally required.
brian
—–
Each foreclosure has its own story, so it is hard to have a generic response to the whole mess. I’m sympathetic to the idea that house-flippers and materialistic idiots who bought more house than they could afford have what’s coming to them. And I think a market correction is overdue, and should therefore be welcomed. A part of me is “glad.”
Yet even for those “irresponsible” folks, there are innocents — I’m thinking here of spouses, children — that will be suffering, and it’s hard to see why anyone should be “glad” over their tribulations. Plus, communities are going to be losing lots of money in tax revenue, which will hurt bystanders who thought they avoided the risks associated with RE speculation.
And there are people who are the victim of circumstance. How many of the “responsible” folk on these threads could handle a few months without a paycheck, or handle a medical emergency without (and even with) insurance? At some point, even non-speculators could have a tough time coming up with the mortage payment if they unexpectedly lost a job or face an illness.
Finally, there are people who might have had the misfortune of listening to Alan Greenspan when he recommended ARMs a few years ago. If the “Maestro” said it, how could it be idiotic?
So for me, it depends. For some, they indeed have what’s coming to them, while others have me sympathy.
Agree with this comment, as I got very sick of the smugness and arrogance exhibited by all my middle and upper-middle class neighbors who walked in over their head, refinanced three times to take money out to buy goodies, and bragged abou their “flips” and speculative profits.
I rather feel for the people who bought with adjustables only because they wanted a minimum condo and were afraid of being priced out forever. But I don’t feel for them enough to bail them out.
Only one think I will differ with, and that’s the matter of devoting school time to teaching financial literacy. Good thought, but no course will replace basic reasoning ability and critical thinking, which our schools no longer teach, challenged as they are to even give our kids basic skills.
The ability to read and understand a contract, and to 2+2 add, along with basic reasoning ability, would have saved millions of people from being sucked into this latest financial rampage.
Let the schools go back to a rigorous academic focus and give our kids the reading and math skills, and the ability to reason correctly, that will serve them in every area of life, including their financial moves. The curriculum is too crudded up with courses that address specifics while ignoring the skills that will help people understand and learn on their own without being spoonfed.
It amazes me to read comments on this blog and others about how “happy” they are to see others suffer. Even though many brought this on themselves, there are still others who got swept up in the hype.
While it is true that many were smug/flippant in their attitudes toward buying, etc., I feel that most bought because they felt that that if they didn’t buy now, they would have no chance in the future. Sure, this does not absolve them their financial decision and getting caught up in the frenzy is not an excuse but their current hardship/stress should be “punishment” enough. No one should revel in their pain.
To Jim’s point, what many need to be concerned with is the bigger picture. This has and will continue snowball into something that affects everyone in the area. No one is shielded from what is occurring.
Its hard to feel sorry for borrowers like those in my neighborhood who refused to say “Hi” or who silently walked by me as I or my kids washed the car or performed landscaping maintenance all because we were renters.
We are upper-middle class tenants who have never been evicted, foreclosed upon, or declared bankruptcy, yet we have been marginalized by smug neighboring “homeowners” – particularly the middle-aged women. Even the kids of the “homeowners” looked upon us condenscendingly as though they were “owners” too and richer than us. The older the kids, the worse this smug attitude. I have read posters’ remarks re this smugness (like those above) too many times to just write it off as imaginary. It is real, probably fostered by realtors, and has led to a “landed class” vs an “unlanded class” attitude which divides the middle class to this day in CA (particularly southern CA).
Two of our three kids are working their way through college (top tier) by working; one, as a all-night grocery stocker and the other as a pressman for the local newspaper (yes, he works all night long too); the youngest is working at a DirecTV technical call center as a tech adviser to subscribers from all over the nation. They are saving their money, and the oldest has established a 401k plus a Roth plus 2 savings accounts all the while his college friends are in student loan debt up to their necks. The younger two are saving and each owns their BMWs (used) outright. so, its not like we are the neighborhood troublemakers or causing our LL’s property to decline in appearance (far from it, actually).
Sorry that this is long, but I really want certain “homeowners” to think and to reflect upon the discriminatory attitudes that they are exhibiting and passing along to their kids. Perhaps their smugness is one reason (among several) why there isn’t too much sympathy for their predicament.
btw, perhaps its been discussed before, but why are Irvine home prices so high considering that the Irvine Company owns the land under the homes??
MG
do we feel sorry for anyone who loses money in any other type of investment? no. if these greedy idiots would have just lived within their means they would not be losing their homes. they all need a good lesson to bring them back to reality!
When I did closings in Florida over the last couple of years,
people did feel nervous about it. They asked me what I thought
What I told them was what I still think, which is in Miami-Dade
county, there is no more room. There are some infill lots, and
a few spots waaaay out near the Everglades, but basically Miami
Dade is built out. So a single family house can only go up long term.
Long term meaning years, not months. I told everybody, I thought
short time, a correction was coming.
So yes, people had some awareness that what they were doing
was risky. And I have long felt that some financial instruction in
say, a math course, would be helpful.
But I did closings for people who understood this stuff perfectly
well, and did it anyhow. Some of them with the understanding
that if the property didn’t appreciate, they would simply default
on their 100% loan.
Morally, I don’t see there is any difference from stealing a six pack
from a 7-11, except loads more money is involved, and no violence.
I told a person who had done this that it was an indication of a
bad character. I really think it is a lack of moral education, rather
than financial education.
None of this applies to the condo market, which is at present
SERIOUSLY overbuilt, and in which there is an additional 20,000
units still in construction. Which the banks and builders are
finishing, in total disregard to reality. Maybe they will be filled
in 8 to 10 years.
Or, maybe a hurricane will come along, devastate things and all
those housing units will be needed. If the insurance companies
actually pay the claims. . . .
For the record, I am dancing a jig to know that this credit bubble is deflating.
On this topic, what struck me reading yesterday was this blog entry
http://real-estate-and-urban.blogspot.com/2007/08/subprime-i-was-probably-wrong.html
(it’s a blog from one of the Jackson Hole presenters)
Here’s an acedemic making recommendations to federal policy makers who thought people looked at mortgage brokers like used car salesman (with the level of trust that that implies).
Somehow, before all this implosion, I doubt most people thought of mortgage brokers that way. It seems more likely they would have regarded the mortgage broker as their geeky friend to help them navigate all the financial confusion financing a house (much like one thinks of computer whiz friends who come over to fix mysterious problems with one’s computer, or that A student who could help you understand algebra).
That’s a fundamental disconnect between policy attitudes and reality …
lg,
To your valid point that “most bought because they felt that that if they didn’t buy now, they would have no chance in the future” I place the blame for this firmly on the Realtors. They were major contributors to the hype during this obvious bubble and are guilty as charged.
Sure there were a lot of us who recognized the bubble and reacted appropriately, but for the victims who were convinced by these real estate ‘professionals’ that if they didn’t act now they would miss out I am truly sorry. Just what will it take for people to realize the true nature of a Realtor? They rate just above used car salesman in my book.
For the record, I left Irvine in September 2006 and moved to the Charlotte area for a much better job and less of a real estate bubble. Oh yeah – I also swapped my 30 year-old 1,500 square feet in Irvine for a brand new 5,000 square feet on the golf course for a lot less money. Sure, the weather is no match but I just stay in side or use my own pool on 1 full acre with no intrusive neighbors.
http://img257.imageshack.us/img257/4695/P1010085.jpg
I wonder. There’s the same ethical dilemma with stock brokers/stock advisors (ie. is this really a good investment? Or is it some commission based recommendation he’s selling me), which people often avoid by buying mutual funds instead.
I wonder if there is a similar analogy for mortgages. Can you avoid a mortgage broker? (ie. what other options are there – any website comparison tools or anything?). Looking at the FTC website (
http://www.ftc.gov/bcp/edu/pubs/consumer/homes/rea09.shtm) they seem to take the car salesman approach (ie. go to several dealerships and get quotes – same deal, but multiple lenders).
Actually, to follow that analogy, there are car comparison services that just charge a flat fee to find you the best price on a car. If there was a mortgage brokerage house that worked that way (ie. flat fee, no additional commision to put you in this mortgage or that one), that would probably remove a lot of the ethical dilemma for the mortgage brokers working there.
Forgive typo in above post, in 3rd paragraph.
Ok business guys, this is Irvine after all, home of innovative finance companies. Some financial business person swipe that idea and run with it! We need a new mortgage brokering company that donates all it’s usual BS finders fees to some charity, that consumers can just pay $500 flat to save us shoe leather and go find us the best mortgage!
i agree that there were many factors influencing the decision for many homeowners to buy: media, realtors, mortgage people, friends and personal factors. and it is hard/impossible to offer rude people our understanding… but people equate “new” money with superiority and even more unfortunate is that this attitude trickles down into their children. nevertheless, something just does not sit well in celebrating about someone else’s misery.
i know that i will be chastised for this but yes, i am a loan guy (aka. lg). sure the image of this profession will probably replace the “used car salesperson” since so many company’s hired anyone with a pulse to act as telemarketing salespeople but once all these people who jumped into this industry to simply follow the bandwagon filter out, i believe (hope) that what this profession is truly supposed to offer is personal advice and sound information for homeowners and future homeowners. Ditto for realtors.
This is not to receive a pat on the back since this is what the profession should be doing (and I do not believe someone should be applauded more for simply doing their job) but I frequently turn hopeful homebuyers away and place them on a 3-, 6- or 12-month plan to buy a home. Could I have placed them into a loan? Absolutely. And I am sure that many went elsewhere to obtain the loan.
The point of this is to say that the image of professional mortgage lenders and realtors has been marred with the recent down cycle (almost everyone was still cheering on the upswing). During this time, it almost seemed like clients were standing in line at a club hoping you would pick them. However, in a “normal” market, a professional realtor will help you find the gem you are looking to buy and give you that edge in selling your home. A professional mortgage lender will help structure the best loan to meet your short- and long-term plans and find ways to get you qualified for a lower rate and/or more stable program. And do all this without over-charging.
Financial advisors, brokers on Wall Street need to have DEGREES. There simply is(was) nothing like the mortgage broker industry EVER. NO barriers to entry. All you needed was a pulse and you could sell loans. It as really scary.
The boom is just capitalism’s way of setting up the next bust. Too bad most people will never really figure this out.
This is a country of law. It doesn’t matter if we feel sorry for a mortgage holder’s circumstance. It doesn’t matter if we gloat over their circumstance. It doesn’t matter if the borrower was greedy or fearful. It doesn’t matter if the realtor or mortgage broker was greedy. It doesn’t matter if someone bought a home to live in or to flip. It doesn’t matter if someone used their home as an ATM to buy a Hummer and a plasma tv or they used their home as an ATM to pay medical bills. It doesn’t matter that home owners look down on renters. A mortgage is a contract and contracts are protected by law in this country. Contract law is basic to the tenets of private property rights. And if someone broke the law while initiating that contract, we have laws to deal with that. And when I say it “doesn’t matter”, I am refering only to how the government should or should not intervene.
Actually you don’t have to have a degree to be a garden-variety broker at A. G. Edwards, Edward D. Jones, or even Mother Merrill of the House of Pa(i)yne.
You need to pass a S7 exam, the little S63, and these days, an S65/66 (which is the 65 and 63 together. The 65 registration is for people who are “advisors” and offer “fee based” products, which are usually just asset allocation programs prepackaged for the advisor-brokers to offer clients. Most customers are raising the bar in advance of the industry itself, by demanding a CFP (Certified Financial Planner) for which you now need a degree, or the vastly more difficult CFA (Chartered Financial Analyst) for which you may have either a degree or commensurate work experience, which doesn’t matter because the coursework to pass the exam for this designation is so difficult that most MBA programs aren’t nearly so demanding. Marketing majors don’t have a chance. Wealthy, savvy clients are demanding that their advisors prove their depth of knowlege and experience, and more, demanding that the advisor demonstrate sensitivity to the customer’s situation.
The financial industry is still pretty much a free-for-all, and all the credentials in the world won’t guarantee you have someone competent and ethical. There are many people without degrees but with all the registrations (of course) practising who are absolutely top drawer, while people with MBAs are often not competent at all, and also tend to think the customer wants to take as much risk as they do.
There is no replacement for having a long sit-down with a prospective advisor to see if you and s/he are in agreement on philosophy, especially on the matter of risk;and that your advisor has the level of knowlege and competence you need. Most advisors probe their clients for their level of risk tolerance and then take them to the very limit of it, with unhappy results for client and advisor alike. A good advisor will find the “efficient frontier” between your financial goals, and the least amount of risk you can take and still have a chance of achieving them.
Good comment , says it all.
It doesn’t get any simpler than this.
I understand the dilemma with commissioned based professions but this goes beyond financial professions. What may seem more frightening is that doctors often prescribe medications based on the influences of many of the drug reps. Although they are not suppose to receive a direct financial incentive, they do receive a lot of perks through meals, events, etc. which does influence their decisions.
The problem with a business offering a flat fee is that service suffers tremendously. I would imagine that a business that requires more than a simple order (eg. buying diapers online) would find it difficult to staff professionals willing to go the extra mile when they are working for a flat fee (we have seen this in the healthcare industry where a doctor spends ~5-7 minutes per patient). For the mortgage industry, several companies attempted to do this to varying levels of success. These companies were staffed with unexperienced telemarketers and the lack of service left many homeowners frustrated and upset.
For consumers, it is important that they do their due diligence in the person they choose whether it be realtor, lender, doctor, babysitter, etc.
And an fyi, mortgage brokers seem to receive the most criticism even when banks often offer higher rates/fees. However, most/all banks actually screen the people they hire while only a few brokers actually screen the people they hire. Again, due diligence is key.
I have NO SYMPATHY for those just use their house as an ATM, refinance so many times to withdraw a lot of money then now underwater and cried.
And NO SYMPATHY for those Realtors, Loan Officers… now work in McDonald or unemployment, few years ago, they made a ton of money then spent on fancy cars, nice vacation….
And NO SYMPATHY for those people who did not sell the house at the top (because greedy, thinking the price will go up more), now just keep trying to sell with WTF price because they can not accept why they have to sell LESS than the guy sold before.
Remember, Yahoo once is over $140/share (over $70 after split) and now in the mid 20.
I you are the victim of a “swindle” there are a long line of attorneys to help you.
I’m puzzled by the comment:
“I rather feel for the people who bought with adjustables only because they wanted a minimum condo and were afraid of being priced out forever.”
Ummm…if you’re the average buyer and fear being “priced out forever,” then your logic is the “average buyer” will be priced out forever? Well, who is going to buy that Condo you were counting on for your retirement? If average buyers are “priced out” in the future, the prices will have to FALL to get transactions moving again. So, extending this logic, you buy at a high price now with the full expectation that prices will fall in the future? And you leverage yourself to oblivion to do that? Sorry, no sympathy for the stupid…….
Regarding Sue’s comment from 08:48 :
Why not a mortgage consultant business ? “Pay me $500 and I’ll review your paperwork prior to close, and let you know if you are getting hosed”. “Then, I’ll help you renegotiate the terms, or direct you to someone with better terms”. “If I don’t save you at least $500, my services are free”.
Or something like that.
Sorry, brokers have to have background, credit and fingerprint checks by the Department of Real Estate.
Sorry – wrong on the credit check, just the other two.
2 things about the cartoon are funny:
First – that you could actually get face to face with someone in the financial industry that wasn’t getting a commission.
Second – That someone thinks the bank is “keeping the money”.
Real estate’s slowdown trickles through local economy
This Labor Day weekend finds all sorts of professions, from movers to mortgage brokers, affected by the sluggish pace of local home sales.
http://www.ocregister.com/news/association-estate-real-1837111-housing-mortgage
many mortgage brokers will hire people who are not licensed with the DRE and whose background is suspect. i have seen it where a company was trying to implement a normal screening process with a background check and still turned a blind-eye when someone said that the individual could produce.
some standard should be required on mortgage brokers.
(sorry but my earlier comment was directed at the lending side since that is my profession)
Average Buyers can indeed be “priced out” of specific locations, and simply forced to endure longer commutes (e.g. driving the Devil’s Highway known as the 91). Average buyers have certainly been priced out of Manhattan and London Real Estate.
“Average buyers have certainly been priced out of Manhattan and London Real Estate.”
This is a unique circumstance where job creation is allowed to outstrip the available housing stock. In California, each city is required to do an analysis of its potential for job creation and balance it with its available housing stock as part of the Environmental Impact Report for their General Plan.
Orange County has excessive job creation at this time. This is one of the reasons they were able to defeat the airport on the El Toro base. It is also one of the reasons house prices are too high. The amount of commercial and office zoning is restricted in order to bring job creation and housing availability back into alignment.
We still have an issue with affordable housing. There are no easy answers for this one. Irvine has been mandated to provide a lot of affordable housing, which is the source of a lawsuit filed by the city of Irvine.
Alan Greenspan’s advice was to use adjustable rate loans as the interest rates average lower over time than fixed rates.
But, the loans that get bagged as ‘adjustable rate loans’ are really ‘adjustable rate loan WITH a low introductory rate’, that was never reflective of what the real rate would eventually and surely adjust to.
The ture ‘adjustable rate loan’ was just that, without negative amortization, teaser rates, 0 down, liars loans, or any of the other nonsense that’s tarnished and probably eliminated a loan that’s appropriate for a responsible adult.
MG take a look at this excellent post
https://www.irvinehousingblog.com/2007/07/16/land-value-101/
The Irvine Corporation has a *lot* of room to drop prices if they need to monetize the assets they’ve been over-constructing lately.
There is a standard for mortgage brokers.
It is the strongest standard in the industry, bar none.
The situation you are describing is completey forbidden by the Department of Real Estate, and would result in revocation of a broker’s license if discovered.
Processors may speak with clients, but under no circumstances may quote rates or terms.
Only licensed mortgage brokers/salespersons may have this type of conversation.
If by the lending side, you mean wholesale, they do not have the same requirements, because they have no contact with the public. They have contact only with licensed mortgage brokers, who don’t have a need of being protected.
I don’t feel sorry for most of these home buyers since they didn’t have enough sense to purchase a put option. These people deserved what they got with their reckless abandon.
The ones I feel bad for are the home buyers that implicitly purchased a put option with their interest only loan only to have the bank pretend that they didn’t know what the Hell they were talking about when I instructed them to exercise it! That is fraud!
If it was, in fact, wholesale you were referring to – this person would be called an Account Executive (for the lender).
This is totally different than a Mortgage Broker.
True, there are standards that are supposed to be followed but several brokers in the OC do not.
On the retail level, anyone quoting a rate is supposed to be licensed under the DRE unless the company does not require this of employees under the DOC.
The problem is that many companies do not follow this standard and that is why I stressed that consumers must do their due diligence. I know of several companies that forgo the licensing requirement. I would assume that this practice extends beyond the few dozen local companies of which I am aware.
so my earlier comment about having a standard in the mortgage industry should be revised to “the standards set on mortgage brokers should be enforced”.
It’s difficult to find much less feel any sympathy for the professionals in the real estate/lending business. Why? Because they’re professionals. It’s their job and if they’ve done little or nothing to protect themselves and their clients from a wide array of mistakes one could point to (buying at the wrong time, for too much money, too large a loan) then why should I feel bad for them? Their professional was found lacking and chances are, even though those pros may now be feeling pain they’ve contributed to a large group of peoples’ suffering.
The buyers are a mixed bag. Some fall under the heading above. Call them flippers, ladder climbers, whatever. Some people, who weren’t real estate professionals, made buying and selling homes a business. Some got burned (some got rich). That’s life. The people I do feel sorry are the ones whose life plans have been disturbed, delayed or derailed by an artificial contrivance of greed in the name of the housing bubble.
I don’t recall who said it but I hope it’s true, “Time wounds all heels”.
I would have liked to buy a house the past few years but delayed my plans because I did not want to bail out anyone from this damn bubble on my expense. Because of this I have had to deal with many major inconveniences. Everyone in their own eyes has a unique situation and the bottom line is nobody wants to take responsibility for their own actions. I do not feel any sympathy. Many Psychologists believe the pain in losing something is 2.5x as great as the joy one would get from gaining that same thing. Because of this, the bubble has made everyone a “loser”. This situation is very bittersweet.
Interesting article.
Why California housing matters
Commentary: Affordability ultimately hits the economy
http://www.marketwatch.com/news/story/why-california-housing-matters/story.aspx?guid=%7BDD9839A0%2D1A46%2D4B94%2DAF0D%2DF6C2706BC99A%7D
Links to papers from the Federal Reserve Bank of Kansas city
http://www.kansascityfed.org/PUBLICAT/SYMPOS/SYMMAIN.HTM
Nice home. Makes me carefully think about the trade-offs.
It’s spelled “McMansion”.
So it’s you, the trophy wife, the dachshund, and the maid/cook in 5,000 sq ft. Very eco-conscious.
I’d love to see the utility bills on that thing.
Right. There’s no more land. Anywhere. The whole country looks like Manhattan already.
I still think you are confused about this. Maybe you are referring to persons holding a CFL license. Astonishingly, they have next to NO requirements, nor barriers to entry. Even banks are not held to any standards. I repeat, DRE licensees MUST comply with regulations of both the Department of Real Estate and with RESPA. Consumers should be aware that strong protections exist ONLY when they are dealing with a Broker/Lender who is licensed by the Department of Real Estate. If you know of violators, you should report them.
As for Brokers having “no barrier to entry”: in addition to test requirements, background checks and FBI fingerprint clearances, you must meet the following (from DRE website):
(FOR SALESPERSONS SUPERVISED BY A BROKER)
“This license is required of individuals who are to be employed as salespersons under the supervision of a licensed broker. A license may also be obtained by a person who does not immediately intend to be employed by a broker. However, a salesperson without an employing broker may not perform acts requiring a real estate license. The license authorizes real estate activity only if the salesperson is in the employ of a licensed broker. Information on what constitutes licensed real estate activity can be found in the Real Estate Law.”
“Education: Successful completion of the following college-level courses is required to become a real estate (same for mortgage) salesperson:
Real Estate Principles (must be completed or in progress to apply for examination and must be completed prior to applying for a license); and
Real Estate Practice (must be completed prior to applying for a license or within 18 months of license issuance); and
One course from the following list (must be completed prior to applying for a license or within 18 months of license issuance):
Real Estate Appraisal
Property Management
Real Estate Finance
Real Estate Economics
Legal Aspects of Real Estate
Real Estate Office Administration
General Accounting
Business Law
Escrows
Mortgage Loan Brokering and Lending
Computer Applications in Real Estate
Common Interest Developments”
(FOR BROKERS)
“Experience: A minimum of two years full-time licensed salesperson experience within the last five years or the equivalent is required. For further information, see Documenting Experience Requirements for the Broker Examination.”
“Education: Applicants for a real estate broker license examination must have successfully completed the following eight statutorily required college-level courses:
Real Estate Practice
Legal Aspects of Real Estate
Real Estate Finance
Real Estate Appraisal
Real Estate Economics or Accounting
And three* courses from the following group:
Real Estate Principles
Business Law
Property Management
Escrows
Real Estate Office Administration
Mortgage Loan Brokering and Lending
Advanced Legal Aspects of Real Estate
Advanced Real Estate Finance
Advanced Real Estate Appraisal
Computer Applications in Real Estate
Common Interest Developments”
“Very eco-conscious”…..oh brother
I think I will go turn on a hose and let it run in the street.
“I feel that most bought because they felt that that if they didn’t buy now, they would have no chance in the future”
If a buyer could only afford the payment on a adjustable IO mortgage, then they shouldn’t have purchased the home. It’s that simple. If people wanted to ‘get in’ then they should have used some sense and bought a home with a payment that would allow them ‘stay in’ rather than have to sell within 5 years.
I still think you may be confused. Maybe you are referring to CFL “brokers”. Astonishingly, they have next to NO regulation, nor barriers to entry. Banks also have few requirements. Licensed Mortgage Brokers are HEAVILY regulated by both the Department of Real Estate and the long list of rules contained in the federally-mandated RESPA.
Consumers should know that only Department of Real Estate licensees offer these protections. (If you know of persons breaking these rules you should call the Department of Real Estate and report them.)
As for brokers having “no barrier to entry”, this is not true. In addition to examinations, background checks and obtaining fingerprint clearance from the FBI, you must also meet the following:
(FROM THE DRE WEBSITE)
(FOR LICENSED SALESPERSONS SUPERVISED BY LICENSED BROKERS)
“This license is required of individuals who are to be employed as salespersons under the supervision of a licensed broker. A license may also be obtained by a person who does not immediately intend to be employed by a broker. However, a salesperson without an employing broker may not perform acts requiring a real estate license. The license authorizes real estate activity only if the salesperson is in the employ of a licensed broker. Information on what constitutes licensed real estate activity can be found in the Real Estate Law.”
“Education: Successful completion of the following college-level courses is required to become a real estate salesperson:
1. Real Estate Principles (must be completed or in progress to apply for examination and must be completed prior to applying for a license); and
2. Real Estate Practice (must be completed prior to applying for a license or within 18 months of license issuance); and
3. One course from the following list (must be completed prior to applying for a license or within 18 months of license issuance):
• Real Estate Appraisal
• Property Management
• Real Estate Finance
• Real Estate Economics
• Legal Aspects of Real Estate
• Real Estate Office Administration
• General Accounting
• Business Law
• Escrows
• Mortgage Loan Brokering and Lending
• Computer Applications in Real Estate
• Common Interest Developments”
(FOR LICENSED BROKERS)
“Experience: A minimum of two years full-time licensed salesperson experience within the last five years or the equivalent is required. For further information, see Documenting Experience Requirements for the Broker Examination.”
“Education: Applicants for a real estate broker license examination must have successfully completed the following EIGHT statutorily required college-level courses:
• Real Estate Practice
• Legal Aspects of Real Estate
• Real Estate Finance
• Real Estate Appraisal
• Real Estate Economics or Accounting
• And three* courses from the following group:
o Real Estate Principles
o Business Law
o Property Management
o Escrows
o Real Estate Office Administration
o Mortgage Loan Brokering and Lending
o Advanced Legal Aspects of Real Estate
o Advanced Real Estate Finance
o Advanced Real Estate Appraisal
o Computer Applications in Real Estate
o Common Interest Developments”
I’d also put some blame on HGTV for shamelessly promoting flips to people that had no idea what they were getting into. And for hyping expensive upgrades and the market generally. BTW, aparently granite coutertops are becoming passe now because everyone has them.
Very good point you make, and it’s the thought that stopped me from buying into this lunacy.
I thought- if I should need to sell it because of job transfer, job loss, whatever- who will buy it.
However, I can see why they did it. I just don’t believe in providing a bailout for these people.
Part of being a citizen and an adult is using your brain and not letting yourself be led by the mass delusion of the moment.
Sorry for the double post!
That was strange: it didn’t show up the first time, so I thought it was lost.
I know the requirements that are placed on mortgage brokers. What I was saying is that many mortgage brokers do not abide to the requirements and thus the consumer should do their due diligence (eg. check that the person they are working with has an active license with the DRE).
Same here. Got tired of dealing with the rigors of renting and wanted someplace stable to live. However, I could not find a place that did not require me to either:
1. Take an ARM Loan (something I was warned about 20+) years ago
2. Take a fixed mortgage note that took 80-95% of my take home pay (BEFORE Property taxes).
For this reason, I have NO tears to shead for the greedy floppers.
Ahh, thank you Rich. Bookmarked!
MG
Affordable housing mandates are a joke, and I imagine that TIC will do everything in their power to prevent from having to puke up a few more S***boxes for the proletariat.
“In California, each city is required to do an analysis of its potential for job creation and balance it with its available housing stock as part of the Environmental Impact Report for their General Plan.”
Gotta Love that Newspeak. Don’t you mean the NewSoc libs have decided that MiniPlen can better manage our happiness through central control. The Chinese central planners couldn’t do it any better.
No, I think in reality TIC has proven deft in its ability to negotiate favorable terms with The State, through a combination of carrots (contributions, land gifts) and sticks (contributions to the other guy). I would expect Orange County will continue to have excessive job creation into the foreseeable future.
Hey, awgee, someone finally turned some of those computers off
Treasury Market Volatility Rises to Most in 3 Years (Update2)
http://www.bloomberg.com/apps/news?pid=20601109&refer=home&sid=aElY_bfozOp4
MG,
Kudos to you and the spouse for teaching the kiddos financial responsibility and the value of a dollar. My parents did the same and now being a young professional, I have zero debt, max out my 401(k), have Roth IRAs, and save my $ rather than buy lots of toys I cannot afford. I live within my means; I have several friends and acquaintances that don’t.
Good job, there need to be more parents like you, especially here in Irvine.
That’s a great point. Somehow when we turn 18 we are magically granted the ability to enter into contracts, yet most of us have never had any information on the subject. While parents can help, primarily because of experience, they can’t be there to guide in all situations.
Call the course “Personal & Social Responsibility” and introduce it along with the current health and sex education as a full semester course required for graduation.
This is all Alan Greenspan’s fault. Our economy should have fallen into recession following the Dot.com bubble. By lowering rates so low and maintaining them too low for too long, Greenspan allowed the economy to move along in an artificial economic boom based purely on leverage.
Greenspan knew we would fall into recession and didn’t want to deal with it. All this did was create an even larger problem with housing and IMHO LBOs done by private equity firms, which will become a growing problem soon. Bernanke’s best move will be to hold the line on the rates, only moving them to protect against inflation, and allw the economy to take its comeuppins.
We will emerge stronger, but it’s necessary in order to bring balance back to our economy.