Why Housing Market has not fully recovered
It’s funny how so many people have so different reasoning why certain things are happening or have not happened. I am such a person but instead of using words or ideas expressed to me by others, I use my own personal experience and whether it is not the exact same thing that happens to others, it does give me reason to conjecture and surmise what may later prove to be factual. Listen to politicians and you will hear that the reason the housing market has not recovered as it should have by now would be because of President Obama, this I now know is a lie. You will hear Wall Street express to those they carry around in their pockets to convince the public it is because of the Dodd-Frank legislation, this I also know now to be a lie. The reason that housing has not recovered as it should have is simply the very same reason the economy collapsed in the past, greed, avoidance and selfishness. Look at AIG, the biggest cause of the economic collapse now pushing reverse mortgages, really?
The above characteristics are not just a Wall Street thing but have become an American Institution just like high learning. As a matter of fact, those most sought after to help solidify this new way of American business are exactly those of higher learning. It is believed that capturing those at the top of their class in these prestigious schools is the only way to maintain a company at or near the top of their industry. That by capturing those intellects, a company can rise and it is becoming more and more evident that the only task assigned is to make or save that company money by any means necessary. Here is what I mean.
I started a VA Home Loan application with Wells Fargo. Now according to the VA website, I had to possess a DD-214 (discharge papers), have a 600 credit score and a VA Certificate of Eligibility. This loan would be guaranteed by the government to reduce the risk of any bank making the loan. It would require banks to collect only that amount for which they were on the hook to hold before they would at minimum break even, but this is and never will be the purpose of bankers. Enter the greed to not only make as much money on the loan as they possibly could but add on as much to the loan as legally possible as well. Now they wanted to make a mint on every loan they lend but here comes the avoidance because the new law says that they would have to maintain a certain amount of money to cover the loss so that we do not end up dangling over the cliff again. To avoid this lenders are now looking for buyers of every loan they do before they even do the loan.
Anyone familiar with purchasing a home knows that first you apply with the basic information then your lender will issue you a pre-qualification letter so that you can proceed to the next phase of selecting the property you wish to purchase. While you are doing that all verification for the previous submitted documentation is gathered and now begins the qualifying of the chosen property. If the property passes and all else matches, you proceed to the closing and now another step into the recovery of the housing market is made. This is not the game being played today. The rules of the game today, is sell the loan before you make it, then you can avoid carrying the reserves to support that loan. If you cannot find anyone to buy the loan from you then deny the loan.
But let us not forget the third past reason this economy was hanging by a thread from that cliff. It is the selfishness factor and it is the one that does far more damage than any of the others combined. The selfishness factor is the clear non-caring for this economy or its people. It’s not caring that those on the other end of this new game are people too with feelings, desires and dreams just as you have. That many may have sacrificed days, months even years to arrive at this point, thinking that finally their American Dream is coming true only to run into a player and feel that crushing weight of ineligibility yet again. Just when you feel that you are finally free from that boulder, this player of the new game places another one right back around your neck. Now a dad who thought he was a provider has to stand in front of those he loves and hope that they do not see him as he sees himself, a loser. Not because anything he did but just because some person wanted so badly to win that toaster at the next office gathering that he cared not what happened to that person on the other side. He just wanted to be the one that all other employees looked at as he crossed the stage to get his reward for saving the company the most money this quarter.