Subprime Mortgage Crisis Who’s Responsible for the Mortgage Mess

Who Are These Bad Guys in this Mortgage Mess?

The housing bubble has burst and left us an ugly stinking mess! Who is responsible? Who can we hold accountable? I would offer that the least defensible groups are those CEOs and executives who created confusing and misleading financial quagmires that convinced far too many to buy homes they could not afford. Whether these purchases were for residence or profit, it made no difference. A few might be prosecuted, but the majority weaseled around the rules. They claim to be victims, but they lie! They made millions of dollars they will not give back.

There is another group of bad guys being mentioned. Those who speculated in the housing market, made money, spent the money and now they too are in homes they can no longer afford. My friend Robert is one. Robert lives in California and when he left the corporate world at age 40 to become a mortgage broker, little did he know the ride he was in for. It started out good, as he helped people secure loans to purchase homes, but then home prices began to skyrocket and there was easy money to be made. Robert and friends begin flipping houses and making $20,000 in a month. Heck, you could purchase a home in a development under construction and make big money selling without ever taking possession. It never occurred to them that this was anything other than capitalism. They never considered this was just too easy. Money was flowing in and out of their pockets and life was good!

Robert moved his family to a spectacular home in an exclusive neighborhood. His wife dressed to the hilt, drove luxury cars and traveled on a whim. The kids had the best schools and every latest gadget and toy. Now, please keep in mind that this was a family that went to church, gave to charity, excellent parents with well disciplined kids. It’s just that they were giddy with new found wealth. Robert spent and spent and spent and then, the bubble burst!

As home prices began to crash and so did the world around him. People were not buying and the properties he owned were like anchors around his neck. The mortgage business dried up and even those like himself, who wanted to refinance could not because they owed more than their home was worth. He joined a large group of people in danger of moving their families to the street. Was there to be any help in sight?

Yes, as seen in the new administrations mortgage assistance program plans to help all those in trouble. However, a debate emerged around people like Robert, who were not taken advantage of by lenders, made money then lost money and in short, played the game of capitalism and lost. Why should they be helped? And then there is the matter of all of the people who are not behind in their payments. Are they to receive nothing for doing the right thing? Are only those who made mistakes going to receive government assistance?

I confess that aversion to helping speculators was my first reaction. It began to change when I realized I knew some of these families. The issue was no longer abstract, it had faces. You know, we are all egoists and no matter what we like to think about how good, kind and compassionate we are; if we examine our motivations carefully, there is always something in there for us. Who amongst us can claim there is no possibility they would act like Robert given similar circumstances? If we did not act, was it out of our morality, lack of opportunity or fear?

Sorry, but it was not our high moral standards. We all readily submit to the desires of our egos. Just look at what we value in our society. We watch the powerful, rich and famous and envy their lavish life styles. Does it ever occur to us that this selfish over indulgence should be condemned not copied? The tide is turning because the acts of greed now being exposed are so outlandish that we feel a bad taste in our mouths. The future may bring the concealing rather than the flaunting of wealth. Greed, envy and egoism are at the root of our financial crisis and we all were either participants, enablers or voyeurs.

I appeal to us all to quit watching the world and begin participating. Let’s put faces on people and not objectify them. There is a wonderful opportunity in these times to put the human back in humanity. We need each other to get through this complicated mess. It is not just going to go away! Countries pull together in times of war. We need to pull together as a nation and then all nations need to pull together as one country. This is a global economic crisis. The world must pull together. We need each other, Now!