It's 11pm. After my spouse wrote a piece over at Rain City Guide earlier this evening, I decided to write about something on my mind here at Seattle Bubble.
The blame rests on me
I've made some stupid financial decisions in my life. I blame me. And, my ignorance in financial matters.
When I do filing of closed transactions, I usually spend some time quickly browsing some details of the transactions. When the two large file cabinets we have in the office are full, it is usually my cue to move'em out into storage to make room for deals closed within the last month or two.
I've noticed on bubble blogs that lots of blame for the real estate bubble is directed at Realtors and Loan Officers. But, you know what? I've come to realize that over the last two years, we have had a healthy number of customers, who I've coined "refinance refugees," for lack of a better term (like repeat customers), who return to our office to close their 2nd or 3rd refinance transaction.
I don't say this in a condescending manner at all. It's just --that's what it is. I've had several after work dinner conversations with my spouse regarding the probability of borrowers in our market and elsewhere clearly in over their head. I know this sounds terrible, but the truth of the matter is that I do think that some of our clients will be refinancing again or selling to get out of financial problems. Some will return to our office and some will close their transactions elsewhere. But, they will do it.
After meeting with another client today who had refinanced and closed their transaction a short time ago with us, it became apparent that people are in control of their financial lives, for better or for worse. Certainly, to a LARGE extent, we are in a credit bubble caused by easy money, reduced credit standards and fiscal irresponsibility in lending. But, that does not excuse people sitting across the table from me, and scores of other escrow firms across the country, who sign on the signature line. In general, when borrowers refinance over and over and just shift consumer debt onto a home, you can't blame the loan officers and Realtors for other people's decision making. Yes, I understand that loan officers profit from other peoples fiscal irresponsibility. And, I understand that people blame the loan officers for "putting" them in that predicament. But, I just don't think that you can relieve the responsibility (or lack thereof) of the consumer.
This does not excuse some loan officers that gain a financial windfall by preying on the elderly, or who participate in fraudulent loans or some Realtors who participate in unethical or fraudulent behavior.
Escalating home prices due to easy money. People financing purchases that don't prepare for rainy days and don't live within or UNDER their means. Folks who refinance out of trouble and tap out the housing ATM. These are all part of the game to ruin. When people only prepare and live for today and not 5yrs. or 20 yrs. from now, that's what creates bubbles.
"If you strive for mediocrity, that's what you get." - Ken Foreman, Ph.D, U.S. Olympic Track & Field Coach (Seoul Korea 1988 Olympic Games) & former Seattle Pacific University Track & Field Coach.It's fun analyzing the markets and discussing how the Puget Sound market will do. It's easy to blame other people and professions. But at the end of the day, if I can't make my payment after my ARM adjusts in Dec. of 2009, I have nobody to blame but the guy in the mirror.
This is what he literally screamed at me and my class at SPU in 1985 during a lackluster and non-participatory day in class. And after that tirade, he slammed his text book down on the podium and slammed the classroom door and walked away from us all. After he left the classroom I don't think anyone moved for at least 2 minutes. The statement can be used for most anything, including financial responsibility. I'll never forget that day.