Maryland and Virginia Real Estate and Homes Blog

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IF THE LAWMAKERS AND REGULATORS IN GOVERNMENT AND ON THE HILL HAD A SENSE OF HOW OUR ECONOMY WORKS, THEY’D UNDERSTAND THAT:

“AS THE HOUSING INDUSTRY GOES, SO GOES THE ECONOMY OF THE UNITED STATES OF AMERICA”. 

When the fools in Congress, Fannie Mae, Freddie Mac and on Wall Street reduced housing legislation and regulation to a mechanism for enhancement of their personal piggy bank, they were guilty of no less than economic treason.  Our economic recovery and lasting individual financial health depends on the health and viability of the housing industry. 

WHERE IS YOUR MONEY?  It has been estimated by many financial experts that about 80% of the individual wealth of Americans is the equity in their real estate holdings, residential and investment properties. 

THE 201(K)?   The loss of personal residential real estate equity is only half of the picture.  The savings of many Americans is in their 401(k) savings and retirement accounts which have been reduced by about half due to the decline of what??. . . . . . .  the housing industry.

THE ECONOMY FROM THE BOTTOM UP.  Consider for just a moment the many Americans who have lost their source of income due to the collapse of the new home market:  Entire building segments including builders and the many skilled tradesmen employed in the construction of residential real estate.  Building trades including electricians, carpenters, plumbers, masons, roofers, painters, dry wall workers, landscapers, well drillers, mechanical systems installers, architects, draftsmen, material suppliers for wood, siding, roofing, windows, concrete, tile, carpet, flooring, lighting, plumbing, appliances, and so many, many more. 

Of course, when the new home construction industry declines, the millions of Americans who rely on that income for consumer spending for food, transportation, clothing and all of the basics for maintaining a consuming household.

1,000,000 REALTORS WORKING PART TIME.  The collapse of the housing and financial industry caused the incomes of hundreds of thousands of real estate sales and mortgage financing employees dramatic losses in average income.  Real estate agents, brokers and mortgage loan representatives are citizens too and we rely on real estate brokerage for our incomes.  We are also consumers and have mortgage payments, car payments, need for clothing, transportation and other consumer goods as with all Americans. 

IS THE FOX GUARDING THE HEN HOUSE?  We, the real estate and mortgage representatives don’t have unions or governmental advocates seeking to protect our incomes.  In fact, far to many of the entities designed to protect the consumer consider real estate agents, brokers, loan officers and others in the housing and mortgage industries to be enemies of the consumer.  That mideset defies logic, but it’s been demonstrated many times over.  Every state in the nation has a Real Estate Commission or Real Estate Board with a mission to “protect the consumer” ostensibly from the real estate agents and brokers.  Growing numbers of states are in the process of conducting or promulgating laws to protect the consumer from mortgage companies, mortgage brokers and loan officers. 

THE TRICKLE UP COLLAPSE.  The collapse of the housing industry was felt at the depths of the real estate and mortgage industry.  The vast majority of homes sold were done so with mortgage financing.  Without home sales, loan officers, underwriters, processors, appraisers, real estate attorneys, title officers, surveyors, inspectors and so many more industry segments have declined to a point where many have been forced to leave their chosen field of employment to seek jobs in unrelated fields.  Financial disruption has touched millions of Americans who relied on the housing industry for their income. 

THE TRICKLE DOWN FIX.  The government, in it’s wisdom, has determined that the cure for the financial disaster is to take equity stakes in vast segments of the financial industry, commercial banks, investment banks, insurance companies, mortgage regulators and more.  At the end of this experiment in government financial and social engineering, the government will own to a limited degree an equity position in banks, investment houses, insurance companies and mortgage regulators. 

While Messers Bernanke, Paulson and Cox ponder ways to rescue the commercial banks, investment banks, rating insurance companies, Fannie and Freddie; the housing industry, individual home owners and the millions of Americans employed in the housing industry are sinking ever deeper into the financial quagmire.  Yet, the very government institutions whose job it is to protect the American citizen, the SEC, the FEDERAL RESERVE, the TREASURY, the CONGRESSIONAL OVERSIGHT COMMITTEES and the OFFICE OF THE PRESIDENT, have determined that the cure is to invest $$$BILLIONS OF DOLLARS into the very entities that profited the most from the mortgage mess that many now realize that they created. 

WE DISCOVERED A NEW REGULATORY THEORY.   Rather than holding the entities responsible for the mortgage mess responsible and relying on the market to determine which entities will survive, the government has decided to let the victim, the American taxpayer pay, with about $1,000,000,000,000 or more $Dollars for an experiment in a new kind of financial management, The Trickle Down Fix.

Ramlings of Lenn Harley, Broker, Homefinders.com.