In The Beginning
I recently received a very spirited response to a posting that I did in regards to what a Loan Officer should never do. All thou I do very much share this persons frustration in regards to the mortgage meltdown I am not sure if we see it in the same way. One of the points raised in the response was that there is a large part on the public that are ignorant to the pitfalls of a home mortgage. Well this got me to thinking so I am going to do a several part series about the pitfalls that the consumer should be aware of.
So let’s look at this without emotion and from a neutral view point. People that are happy or excited are buyers. People that are generally not happy will not spend their money. For example, if you do not enjoying yourself at a public outing you are most likely looking for a way out. So way does the average person part with their money? It is for self satisfaction, from a candy bar to a home as long as we feel good about the transaction. So that is a salesperson’s job and you as the consumer need to understand this.
I would have to say that the best sales people are movie stars. Think about it, people are paying as much as $40 for two tickets to the movies at prime time. Brad Pitt has got to be one of the best salesmen of all time in some ways. You are paying for a big name movie and sometimes disappointed later. Much like a big bank or broker mortgage that let’s down because you did not understand something in your loans structure.
My point is that you have to leave emotion out of these types of transactions. Everyone including myself has made an impulse purchase only to be disappointed later. This is a fundamental flaw in the way we respond to things that we like or want. Sometimes our desires can over power our needs. This can become a very serious issue when our own survival is at risk because we bit off more than we can handle.
The Media and Public option will often help us to make misguided steps as the information we used to make our decisions was flawed from the beginning. For example, the Arizona law that has everyone in an uproar mirrors the Federal Law that has been ignored for years. Personally I do not see a problem with the law and yes some of my own personal family does not have permanente citizenship status. Everyone 18 and over is required by law to carry identification. So why is it a problem to ask anyone here legal or illegal to show ID? Those that say the Arizona law is unconstitutional are clearly ignorant themselves to what the constitution says and the Media runs with. So ask yourself why? The answer is because they, the Media, makes money from telling the story true or not. Yes they would prefer to tell the truth with their stories but “if it bleeds, it leads.” Then something that is questionable at best can suddenly seem as fact.
Here is an example of the Media at work. The guy that tried to set off the bomb in Times Square was arrested and is Pakistani. The Media and even the NY Mayor thought that this guy was most likely a tea party or home grown person that was unhappy with Obama or Heath Care. This type of thinking is absurd yet many people will run with it because they heard it on the news or the Mayor said it. Where is the common sense? People are not that civilized. It is these types of emotional responses that get us off base and not thinking about what we are really doing. Hey, so as long as I have you thinking the same way as me go ahead and sign here. So who should get the academy award?
Over the next several postings I will break down the entire mortgage process step by step with what the brokers, bankers and HMC’s are doing so that anyone should be able to make an informed decision on a home mortgage.