Yes, we are all guilty of wanting to make a quick buck. I played a very small part in the whole mortgage industry just as it was starting to fall apart and I have to admit there was not just little regulation but NO REGULATION when it came to lending money to the general public. This is why the real estate industry will take much longer than we think to bounce back.
I came into the industry from being a waitress with no schooling above a high school degree. I was approached by a family member who told me that a mortgage company was looking for loan officers and was promises big income right off the bat. Yes, I was curious but surly they wouldn't want to hire me I had absolutely no training in financing unless balancing my bank at the end of a shift counted for anything. Quite the contrary, they were ecstatic to have me. I got a desk, a phone, a 300 page manual on how to sell mortgages and told to hit the streets to find clients. So I started talking to friends and spouting any lines I could remember from my little sales book. Amazingly for some strange reason people actually trusted me with all there financial information without asking for any type of training certificate or credentials. I would gather all of there information and send it to a processor, who would then package it for me and make sure the investors would buy the loan, that was it. Little did I know I was pedaling high risk loans to people who had even less understanding of these things than I did. I feel fortunate that I got out of it when I realized what was happening and before I caused any real damage.
There has been a big hole in the real estate market in the last 5 or 6 years and that is in the watchdog sector. Dont be lured into thinking it was only the banks and mortgage brokers who were to blame, the real estate agents are just as bad. with little to no regulation on lending it was that much easer for them to talk people in buying way, way, way, outside of there means because they could refer the buyer to their mortgage broker who could get them the loan at 125% paying only a portion of the interest! So why not up the price on the home another $50,000 if the banks where handing out loans to anyone who walked in off the street. If that isn't bad enough house flipping got to be a hot new get rich quick scheme, that realtors were very much involved in which was very much an illegal activity or supposed to be illegal except there was no one there to catch them at it. People in California were even making TV shows about it!
Even though people in the industry like to say that because of a few bad ones out there it makes everyone look bad, don't believe it one bit because this type of fall out means that most of the banks and brokers were acting unethically in some way or form not just a few. If this last real estate boom lasted about 5 or more years then the repercussions will last 10 or more years. Reason being for all the foreclosures that are happening today, think about all those people that only last year were still able to get high risk loans for a fixed term of five years, which means in five years there will be a whole new wave of foreclosures. Therefore affecting supply and demand in the real estate industry all over again.
As I see it there may be a few ups but a lot more downs, and we haven't seen the worst of it yet.