I read an article in the newspaper last week about a man named David Stern. He was called the “Foreclosure King” of America. The bulk of his multimillion dollar law business was acting as the ramrod for large US banks as they moved swiftly to foreclose on homes of delinquent home owners. Understand, that during the real estate boom of the previous decade, banks saw an opportunity for huge profits in property foreclosures. The age-old axiom that banks would rather have you make your loan payments than own your home became untrue in the super-heated millennial market. Mortgage bankers caught the real estate bug like many others and rushed to foreclose on homes and businesses thinking they could flip those properties for huge profits. For a while it worked, and many, like David Stern got disgustingly rich in the game.
If there is one thing we as a nation should have learned is that bubbles burst – always. There is no perpetual bubble that keeps growing. As David Stern was amassing huge fortunes and snatching up luxury properties from his buddies in the mortgage business, the market was weakening beneath him and his empire was crumbling from within. Instead of saving his money for the inevitable end to the smorgasbord, he spent lavishly on homes, sports cars, and a luxury yacht. All that is now going away.
Stern is now the subject of an investigation by the State of Florida. He is suspected of fraud and is named in a class action law suit. Some would call this karma. I don’t believe in karma, but I do believe in a principle called “reaping what you sew.” David Stern, and many like him, built a fortune on the backs and anguish of the American citizen. He forged documents, and created fictional bank employees to push through the foreclosures of ordinary people who were late on their mortgages. Did some buy houses they couldn’t afford? Did some purchase homes with interest only mortgages? Yes, there were excesses from home owners too, but many just got caught in a bad economy and fell behind. Instead of working with the borrowers to help them stay in their homes, banks pushed them out as quickly as possible and used lawyers like Mr. Stern to achieve their goals. Well, it seems they are reaping the whirlwind now, and I feel no sadness for their plight.
My point? Not all banks are huge machines, chewing up and spitting out dreams. Not all lawyers are David Stern. There are very good people helping other very good people to achieve the dream of home ownership. There are good mortgage lenders who will walk you through the process and make sure you’re getting the right loan that you can actually afford. There are great attorneys who help you navigate the confusing landscape of real estate law. There are Realtors who know these people and will guide you to them, will make sure you don’t get taken by unscrupulous types, and will see the process through to the happy ending. I am one of those Realtors.
All Real Estate. All The Time.