Written By: Bonnie Wilt-Hild
Over the past 5 years I have had many conversations with people regarding the housing market which invariably becomes a discussion as to who is at fault for the collapse in 2007. Depending on who you are talking too, the blame is laid at the feet of big banks or mortgage brokers, Wall Street, FNMA or FHLMC and of course the diagnosis is generally that one or all of the aforementioned groups did it out of greed. It isn’t very often however that I see the finger pointed at the consumer and very recently had someone tell me that it couldn’t possibly be the fault of the consumer or the borrower public in general because they don’t know anything about buying or owning a home. Really? So all of those people who became victim to the housing industry collapse grew up in caves? I don’t think so, and unless the majority of the population of the United States has less than an 8th grade education, I have to believe that have some kind of handle on their own personal finances and what they can realistically afford from a housing standpoint. Bottom line is I not entirely convinced that only a lack of knowledge on the borrower’s part and sheer greed on the part of the financial industry are the only factors that contributed to the collapse, I think a broader social issue also played a part.
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When I was a child, I live in a home with my parents and siblings just as all of my friends did. My parents owned the home, having purchased it before I was born. When I finally decided that it was time for a place of my own, it was from that home that I moved only to stop by every evening for supper on my way home from work (no point in cooking if mom was going to do it). The point I am trying to make is that my parents remained in that home until the day they died and my sister, having purchased the interest of my brothers and sisters as well as myself, still resides there. My older sister owns the home that was my grandparents who also resided in that very same home for over 50 years before passing away. The point I am trying to make is that up until the most recent 10 years, people purchased houses which they intended to make home and generally they purchased only one. A home was the roof over your head, a place to raise your children, the stuff of Easter pictures in front of the garden and for running through sprinklers on a sunny day. Your friends lived on the same street, those friends being your neighbors who you shared cookouts with on summer days and had snowball battles with on winter afternoons, the backdrop of all this activity being the homes on that warm and friendly street. Growing up in that home, I remember some things changing by that I mean the wall paper or carpet but the home was always there, familiar and comforting and my parents never made a late payment on the mortgage because they dared not lose it.
Twenty some years ago, when I first began working in mortgage industry, people where so excited when they bought their first homes. They didn’t believe they deserved the mortgage, but would always share how they had worked so hard to save the money for the down payment. When they made application which was usually face to face, they would even sometimes share with you how they intended to decorate it, what schools their young children would be going to, what parks where nearby and how close they would be to their own extended families. They were making life plans. Today attitudes are different, people purchase homes for investment or simply because they can, not every really making any long term personal commitment to the property as their home and when they become board with it they trade them in like used cars. Even losing a home at foreclosure doesn’t seem to bother most people anymore with some saying things like, “I didn’t like the neighbors anyway”, or “I really just couldn’t afford it anymore”, like it was a gym membership or something otherwise disposable. Not a home but something you trade in or trade up or just get rid of because you don’t like the color anymore and after all you can just get another one because you deserve it not because you worked really hard to earn it. People now look at the houses they buy as housing, not their homes. They don’t consider if they can or cannot afford them, maintain them nor do they see their future, a house is something you buy because you need a place to live or maybe just because you friend got one.
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When I contemplate the collapse of the housing market, not only do I see a need to place the burden of blame on irresponsible behavior in the financial sector but also on social attitudes where homebuyers are concerned, in short, everyone is responsible. Good credit used to be a thing of pride and owning your home was the American dream, a symbol of personal success and this is just not true any longer. I am not saying that all homebuyers have this attitude but I do think that many do just as there are still many a lenders out there who see no problem with putting a borrower into a home they simply can’t afford. Moving into the future, my hope is that people learn to manage their financial houses, accepting responsibility for their achievements and failures while learning again to take pride in homeownership and I hope lenders find a way to revisit the values that made many of them community lenders. This I think will go a long way in solving many of the housing issues we face today.
About The Author
Bonnie Wilt-Hild - As an NAMP® staff writer, Bonnie currently serves as a senior instructor for FHA Online University (www.FHA-Classes.org) as well maintains a full-time mortgage underwriting position as the Senior FHA DE Underwriter for a major lending institution. With over 25+ years of senior-level FHA/VA Government underwriting experience, Bonnie is considered the "Queen of FHA Loans". If you're interested in becoming a writer for NAMP®, please email us at: contact@mortgageprocessor.org.
