Are banks to blame for people signing the Note for the loan they sought?   Businesses (and Banks) are only as ethical as the leadership running the ship.  This is a very complicated issue with many moving parts.

Strategic Default Homeowner of 2004-2007:

“I hate the bank for forcing me to sign the Promissory Note for the loan (I mean the monthly payment) after I have considered my purchase for the 30-45 days it took to close and after my inspection contingency of said property.   I could probably keep making the payments that I knew I signed my loan paperwork for but I just never thought the market would turn down so much.  My value has dropped by 30% from when I purchased it.  I know that I refinanced since I purchased.    I’m aware of neighbors walking and have read that many are doing the very same.  I’m considering walking too.”

Homeowner of 1988-1990:

“I hate the fact that the market turned shortly after my purchase.   I can make the payments and ride this out even though it may be tough.  It might take several years for the values to go back up but if I live within my means I should be ok.  I love my house, my neighborhood and am part of this community”

My mother living on Capitol Hill (23rd and Prospect) in 1979-1980:

“Since the economy soured it has been tough.  My husband lost his job and has been out of work for over a year now.  It’s stressing us to be sure.  We’ve saved and been frugal.  Some of the improvements to our home will not take place.  We’ll have to forego some of the things we’d like to do and we’ll take the bus to get around or ride our bikes.  To get to soccer practice our kids will have to ride their bike, take the bus or walk.   Our kids will work after school to help defray tuition.  I’ll take on any additional work, tutor kids and earn extra money by holding swimming lessons downtown at the YWCA and YMCA in the Central District.

Christmas?  Well, we will make wreaths and Yule logs and should be able to sell quite a few.  We should make enough so that we can get a Christmas Tree on Christmas eve when the prices drop.  Although gifts will probably be few, I’ll probably make some gifts and knit some hats to keep you kids warm during our cold days.

Today (2011)  times are different.  I think back to my mother and father (Dr. Claude Fly) who got us through the great depression in Oklahoma.  This is nothing compared to that.  People of today seem to have lost the work ethic.   With my arthritis and back problems I try to hire kids to help me around our current home.   It’s hard to get them to work for an hour straight around the yard. “

Weekend funnies:   I picked up my kids from school and they spotted this hilarious scene.   They took the photo from inside the car, so it’s grainy.   “Dad, loooook !…..it’s just like the Ikea TV commercial!”  The occupants of the car were actually smiling and waving at each car passing by.  A complete hoot.   Maybe they just purchased a home and are furnishing the bedroom.

I don’t make this stuff up folks.  It is getting to the point where I think loan officers need to seriously think about who they do business with.  It matters zero how low the rates are for this lender if they can’t close or create an atmosphere where it is so difficult to work with that it places stress on your long term business relationship with your customer:

A fully executed, signed and on-time delivered loan package was rejected resulting in a full re-draw due to:

“the vesting on the Deed of Trust said, Husband and Wife, instead of Wife and Husband.”

This is an extremely easy fix, but yet it was rejected.   No progress was made in trying to convince the lender how absurd this was nor how foolish the lender looks to the professionals involved in closing the transaction, never mind how dumb they look to the borrowers who have every right to request another lender.  This places the borrowers loan lock in question and adds expenses including wastes an unbelievable amount of time that could be spent on transactions placed with lenders that have their act together.

This past Sunday, I was given a book by a gentleman who by most measures is financially well off and more importantly is a success story both personally and professionally.  The book he and his wife offered me is called, “Stop Acting Rich,” by Dr. Thomas Stanley (Ph.D) of famed bestsellers The Millionaire Next Door and The Millionaire Mind.

The real estate industry is an incredible laboratory.   It provides us with an interesting foray of social and cultural samples and Dr. Stanley heavily uses housing early on as the springboard for this book.  Perceptions of wealth and happiness seem closely correlated to what the cultural norms place on us and pressure people to become what Dr. Stanley terms, “aspirational Millionaires.”   But, is true wealth achievable and what does it look like?   If you emulate most real millionaires profiled, you won’t be driving a top tier BMW or always wearing Enzo Angiolini, Ferragamo or Allen Edmonds shoes.

In my view, much of what is written in the text is really a story about real estate and how housing shapes our habits of consumerism.   And that is why is it a fascinating read into what people perceive as true wealth.

From the Preface in “Stop Acting Rich“:

The reason why so many homeowners today are having a difficult time making ends meet goes way beyond mortgage payments.  When you trade up to a more expensive home, there is pressure for you to spend more on every conceivable product and service.  Nothing has a greater impact on your wealth and your consumption than your choice of house and neighborhood. (emphasis added)

More exerpts from Dr. Stanley:

• My research has found that most people who live in million-dollar homes are not millionaires.  They may be high-income producers but, by trying to emulate glittering rich millionaires, they are living a treadmill existence. (I know several people who are “aspirational Millionaires.”)
• In the United States, there are three times more millionaires living in homes that have a market value of under $300,000 than there are living in homes valued at $1 million or more.
• Most millionaires do not reach the millionaire threshold until they are near 50 years of age.  Most became millionaires, in large part, because they led a frugal lifestyle.  By the time they reached the millionaire category, they were set in their ways, so even after becoming wealthy, they typically remain frugal. (do you know frugal millionaires like this?  I do.)

“Ours is a culture of hyperconsumerism.  Not only can and do we buy nearly everything (except for the truly outrageously expensive), but we seen to have come to believe that we can and should have it all and that who we are is dependent on the ability to live the right neighborhoods, with appropriately sized homes filled with brand-name appliances, with prestige cars parked in the driveway with expensive golf bags and clubs in the trunk, and so on.”

“In a way, the credit crisis of 2008-2009 is serving as something of an intervention.  But the for treatment to work, you must take a cold hard look at your balance sheet and at your life, and determine if you would be wealthier if you would stop acting rich.” – Thomas Stanley, Ph.D, author of Stop Acting Rich

This book should be at the very top of the list for those in the real estate business.   Get rich slowly seems to be more in vogue today but, sadly, Dr. Stanley feels that although the recession may have caused many to take a breather, every indication is that we will pick up right where we left off when gentler and more favorable economic winds blow again.

Working largely in an industry within real estate that provides a service behind the scenes presents problems in conveying value to the people who recommend our services:  Realtors and Loan Officers.

It has always been an awkward situation.   Realtors and Loan officers are customers, not clients.  There is a difference, not in importance each plays in a transaction (very important), but in how the relationship is treated by each party to the other.

You have essentially two camps:

1)       Agents and loan officers who believe that they control your business by intimidation or by the threat of moving their business to a competitor or both.  They sometimes feel like title and escrow companies “owe