Is this the bottom?

[S-Crow]

We are not at the bottom. And if we were the bottom, my gut is that it will last a few years, maybe longer than anyone prefers.

David L.... I don't think it was a publicity stunt for Ardell. But it certainly is a different tone and I think that is one of the reasons she was quoted in the paper by Aubrey at the Seattle PI.

My post was to place a different perspective on the idea of a bottom, not to disagree emphatically, but to essentially say, hey, I don't think that agents really knew how out of hand things were. The amount of fraud going on was very high and the memo I referred to was to hopefully bring home the idea that the damage to our economy speaks for itself.

Certainly, agents discuss deals over the water cooler, but unless you were in escrow/title or in lending, you were pretty insulated from the "other" market just going 1000 miles per hour. That being refinancing.

What I'm getting at is that the sheer number of transactions (both refinances and sales) title/escrow were closing was just amazing. And, it has always been my contention that the very loans that were being closed were going to put a lot of people out of business and make home owners renters again. It was not something the real estate industry prepared for---the hangover from the party.

[Markor]

[rose-colored-coolaid]

[sniglet]

Here's a surefire way to tell when we've hit bottom: no one will care. Right now it is big news when someone claims we are at a bottom because there are still a lot of people hoping to pick up bargains. When the real bottom comes, very few people will be in a mood to buy. There will be a general discuss with real-estate purchases in general. At the bottom, the accepted wisdom will hold that buying a home is one of the worst financial decisions you can make.

That will be the time to go out and finally buy a house.

[tomtom]

[rose-colored-coolaid]

[EconE]

[rose-colored-coolaid]

[EconE]

RCC...

I agree with what you are saying...especially the arrogance that came with it. I think that the reason I considerer myself as "being outside the forest" is that I was living in Missouri watching the coasts. I wasn't the only one either that thought the coastal bubbles would come crashing down. My Realtor who sold my house tried to do some legwork for a client that had sold a much larger home and was moving to D.C. She was told by the local D.C. Realtor that "they didn't show anything under 800k". Even being in the profession, she was extremely suspect of the values in the "bubble" areas. We would talk about homes in South Central Los Angeles selling for 500k. (now similar homes are closer to $150k)

So....my perspective at the time was that of a mid-westerner looking at property values on the West Coast scratching their head thinking....they want how much for that?!?

Then again...my neighbor right next door to me was buying condos in Florida.

[sniglet]

[ira s]

Great post, Sniglet.
Sometimes when one is deeply involved is precisely the reason there is a lack of clear perspective.

[davidlosh@davidlosh.com]

I will second Ira's thought.

My strategy was based on inflation. I honestly thought we would have a period of rapid inflation contrived by lenders and reinforced by the Fed.

Oil prices were bound to go up, I bet on $100 per barrel from the first mention of invading Iraq. It all made sense until the Fed raised ineterst rates and the whole thing collapsed.

sniglet's comments here were the first time I ever considered there was a "credit crisis." Goldman Sachs? Lehman Brothers? What would they possibly have to do with my Real Estate plans for the future? Those are some kind of stock something or others, I was thinking.

Credit is a tool. It works for you and against you. Credit inflates pricing and it was looking like the rest of the markets would catch up.

[jillayne]

Let's talk about insiders for a bit.

As an insider, I (and others. I don't claim to be the only one) started talking publicly and writing/publishing articles about the problems with the lack of ethics of loan originators. I also taught classes on predatory lending, ethics, and mortgage fraud as far back as 2001.

I have had veiled threats made against me, I have been on the receiving end of aggressive attempts to discredit me and my family because of the dirt I exposed. My family has had contracts cancelled with national associations because I spoke out against the practices that were making millions of dollars for some of these corporations. I regret nothing.

I remember teaching a class a few years ago called RE2.0: How to Create a New Business Model where I talked about alternantive business models such as Redfin, Zillow, 4SaleByOwners.com, etc. The agents LOVED the class but I heard that a broker(from a traditional company) put out a soft ball mandate banning his agents from attending my classes and attendance dropped dramatically.

It is not easy trying to affect change on the inside when you rely on people from the inside for business! I could have made LOTS of money during the bubble run-up working with slimeballs like New Century but I turned it down.

I think that there will always be challenges out there, however, not everyone on the "inside" was dirty.

Some of us tried for years to get regulators, corporations, and associations to make changes.

I approached all four national mortgage associations with ideas on how to better self-regulate ethical conduct. ALL FOUR turned me down and said they had no interest in regulating the ethical conduct of loan originators because they would lose members. This was 2002.

So...I started my own association. It's small but growing and attracting people with a vested interest in helping the industry grow.

Not all insiders were silent about what was going on.

[sniglet]

[jillayne]

Corporate culture also plays a big part. For example, Sniglet, you mention California cities but right here in Yakima the seller downpayment assistance money laundering schemes were so widely accepted that one group of students (in Yak) said that if it were not for the DPAs, none of the people in the room would have made ONE sale during the entire year. They gave me blank stares when I suggested it was creating an artificial bubble in their city.

I think that was 2006, could have been 2005.

Not everyone on the inside was a slime ball. Fed up loan processors quit and moved to other companies, appraisers "fired" slimeball mortgage brokers refusing to take their business, underwriters walked off the job, loan originators left companies like countrywide when they realized what was going on.

We don't hear these stories often enough in the mainstream media but they're out there.

Not everyone can just walk away from a good paying job. Not everyone will choose to be a whistleblower. Not everyone will choose to confront blatant fraud.