Real Estate Broker - Consumers Should Bear The Action Of Their Greed : The Real Estate Bloggers

Real Estate Broker - Consumers Should Bear The Action Of Their Greed

September 8th, 2007 • Related • Filed Under

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I just read this letter to the editor in the OC Register. It is by a broker named Bonnie Benton who explains in part that the housing bubble was a direct result of the capital gains exemptions for housing. While she has a  point on that, I think the capital gains excemption is a small facet of the bigger picture.

But she ends her letter with a great paragraph that I wanted to share with you today.

I am a Real Estate broker, have been since 1975. I’ve been through up markets and down markets for a long time. We’ve been through markets like this before. The last time it was the savings and loans that made the bad loans and rightly paid the price for bad decisions. This time it is more widespread into the consumer sector. But consumers of bad loans should bear the action of their greed. All of them knew they were buying homes they really could not afford. And they all thought they could sell the property for much more than they paid for it in a short period of time. They need to accept responsibility for their own actions.
–Bonnie Benton of Mission Viejo in the  OCRegister.com.

Home Run Bonnie, it is the consumers who made these bets responsibility, not the taxpayers.

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There Are 3 Responses So Far. »

  1. Comment by Christopher Johnston on 8 September 2007:

    I think Ms. Benton must have missed the Resolution Trust Corporation(RTC). http://en.wikipedia.org/wiki/Resolution_Trust_Corporation
    Ultimately the taxpayer ended up funding an entire business designed to dispose of assets at pennies on the dollar. I hardly call that the S & L’s paying for it.

    In many cases the government ends up bailing out bad business models(Amtrak and the airlines after 9/11), industries that won’t adapt to global economics(farm subsides), and people who didn’t prepare for their own future(Social Security and the Pension Benefit Guaranty Corporation). We need more people to realize that the only person that will take care of you is you and we need a government that will remind us of it from time to time. Of course that would require that stop robbing us blind by using taxes as a form of wealth redistribution and thereby penalizing the people who do make correct choices.

  2. Comment by david on 10 September 2007:

    Bonnie and you are incorrect.

    I was the responsible buyer (20% down, trying for fixed loans, within reasonable ratios) having to compete, nearly always losing, with the irresponsible. Now they are losing their homes, unable to make the payments and it is ruining my neighborhood. Had I done what they did, I would have bought a more expensive home in a more expensive neighborhood.

    Truth is what is unfair is that the irresponsible, who were goaded on by their agents and mortgage brokers (I know because I dealt with the same agents and brokers). Instead of sage guidance, it was “whatever you want, whatever you can qualify you need to do, no matter how irresponsible”. And the mortgage brokers in particular I blame because nearly every one I worked with offered me the fixed rate stable products I wanted, but in the end worked their butts off to steer me to ARMS in the end, sometimes without telling me that was the plan all along. It’s gotten to the point that I ask for closing documents before I sign, and during the signing, I ask for copies of the documents that I signed.

    Irresponsible buyers are a problem, but those that knew much more and gained much more from that greed are much more culpable.

    And despite not falling for any of that crap, something that even experts might not catch since it was so cunning, it is my neighborhood and home values that are suffering the actions of others –not myself.

    It’s just so easy to say, see, it’s everyone’s fault, everyone is to blame. It’s much harder to blame specific people and groups based on hard evidence because then they hate you. But that would have been more responsible than what Bonnie wrote and you agreed with.

  3. Comment by Bob on 12 September 2007:

    David is dead on. I wonder how many offers and counter offer Ms Benton wrote with clients where they outbid others and went over the asking price. How many times did Ms Benton walk away from a deal because the buyer insisted on being ‘irresponsible’ and greedy.

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