Common Sense: What IS THAT?
Good Morning Everyone,
The more I observe the world, the more I am given to think that if one could teach "Common Sense", you could make a fortune. It seems to be the single thing lacking in almost every area you look.
For years I have had my California State Real Estate License and used it to sell mortgage loans. I began in the mid 1980's selling mortgages and learned from a wonderful older couple, Bob and Lucille Latta.
In those days we had no computers or fax, so loans were hand done, literally. We filled out the 1003 by hand, calculated the disclosure statements by hand, etc. We also learned that the 20% down which was customary was the lender's required equity position in case of default. In other words, generally speaking it cost a lender that 20% to foreclose, re-market and eventually get that property off its books. That was mortgage lending 101.
In those days we did a lot of FHA loans, which are always self-insured, for people with sketchy credit or no credit. FHA loans were a huge pain in the neck because the appraisals always called for some sort of repair to the asset. Imagine that. The lender required a "healthy" asset against its loan. But the success of the FHA program is its test of time. Every borrower paid for his own mortgage insurance against default and the asset was solid. Good, common sense lending. In the conventional market, 20% down insured a healthy bank position in a loan. Good common sense lending.
Right now we're experiencing a huge mortgage lending debacle, as the direct result of departure from Common Sense.
When I began to notice the changes in programs offered by the mortgage lenders about 3 years ago, I had the sense of deja vu to the Savings and Loan debacle of the late 1980's when the Resolution Trust had to bail out the S & L's.
Why would a lender even offer a program of 100% plus financing to anyone let alone folks with marginal credit? A departure for sure, from Good Common Sense. There were lots of explanations for this: that the price of housing was too high for people to afford it, so they had to offer instruments to compensate. But the truth of the matter was that the banks were greedy and decided to speculate in the real estate market much like the junk bonds of the mid 1980's. And it seems in the world of the human mind, greed trumps Common Sense every time.
Common Sense is that which we all have, innately. We are born with it. We know what feels right and good, and what feels iffy and risky. We know by how it feels to us. However in this world we are conditioned by the edicts of "human thinking" which is always lackful. The human mind is conditioned in fear of not enough: not enough money, not enough time, not enough love, not enough health, not enough of the good stuff. So human mind will rationalize right over the top of the whispers of Good Common Sense.
Recently a friend of mind caught up in attempting to buy a house right now because she could cash in on the low prices, made 4 offers on 4 different houses over the course of a month. None of them did she love. But her human mind kept telling her that she had to buy something right now. Eventually someone accepted her offer, which she received with a huge feeling of fear and regret. But her human mind plodded on and told her all the rational reasons why she should complete the sale. She moved in ahead of the closing only to discover that there were significant items wrong with the property and she really didn't like it at all. You might think she backed out at this point? Nope. She was in such fear of missing an investment opportunity that she went through with it. Just before the close she ended up with double pneumonia.
I tell you this story because it is a classic case of going against your Good Common Sense - your Godchip - whispering to you to follow It. It only feels Good. When you constantly go against your Godchip's direction, you move counter to your Good and it feels bad. And done continually, moving against your good, you end up sick and find yourself in situations you don't like.
So now the lenders find themselves in a financial situation they don't like. Many borrowers find themselves in situations they don't like. And borrowers and lenders alike had full benefit of their own Internal Guidance Systems - their Good Common Sense - to have avoided this altogether.
There are no victims here.
So let's begin to resurrect an old fashioned, inborn gift that we all came in with and still have benefit of counsel. Consult your Common Sense - the wisdom offered up from your Godchip which only has your best interests and joy at heart.
thanks for reading!
Kath
The more I observe the world, the more I am given to think that if one could teach "Common Sense", you could make a fortune. It seems to be the single thing lacking in almost every area you look.
For years I have had my California State Real Estate License and used it to sell mortgage loans. I began in the mid 1980's selling mortgages and learned from a wonderful older couple, Bob and Lucille Latta.
In those days we had no computers or fax, so loans were hand done, literally. We filled out the 1003 by hand, calculated the disclosure statements by hand, etc. We also learned that the 20% down which was customary was the lender's required equity position in case of default. In other words, generally speaking it cost a lender that 20% to foreclose, re-market and eventually get that property off its books. That was mortgage lending 101.
In those days we did a lot of FHA loans, which are always self-insured, for people with sketchy credit or no credit. FHA loans were a huge pain in the neck because the appraisals always called for some sort of repair to the asset. Imagine that. The lender required a "healthy" asset against its loan. But the success of the FHA program is its test of time. Every borrower paid for his own mortgage insurance against default and the asset was solid. Good, common sense lending. In the conventional market, 20% down insured a healthy bank position in a loan. Good common sense lending.
Right now we're experiencing a huge mortgage lending debacle, as the direct result of departure from Common Sense.
When I began to notice the changes in programs offered by the mortgage lenders about 3 years ago, I had the sense of deja vu to the Savings and Loan debacle of the late 1980's when the Resolution Trust had to bail out the S & L's.
Why would a lender even offer a program of 100% plus financing to anyone let alone folks with marginal credit? A departure for sure, from Good Common Sense. There were lots of explanations for this: that the price of housing was too high for people to afford it, so they had to offer instruments to compensate. But the truth of the matter was that the banks were greedy and decided to speculate in the real estate market much like the junk bonds of the mid 1980's. And it seems in the world of the human mind, greed trumps Common Sense every time.
Common Sense is that which we all have, innately. We are born with it. We know what feels right and good, and what feels iffy and risky. We know by how it feels to us. However in this world we are conditioned by the edicts of "human thinking" which is always lackful. The human mind is conditioned in fear of not enough: not enough money, not enough time, not enough love, not enough health, not enough of the good stuff. So human mind will rationalize right over the top of the whispers of Good Common Sense.
Recently a friend of mind caught up in attempting to buy a house right now because she could cash in on the low prices, made 4 offers on 4 different houses over the course of a month. None of them did she love. But her human mind kept telling her that she had to buy something right now. Eventually someone accepted her offer, which she received with a huge feeling of fear and regret. But her human mind plodded on and told her all the rational reasons why she should complete the sale. She moved in ahead of the closing only to discover that there were significant items wrong with the property and she really didn't like it at all. You might think she backed out at this point? Nope. She was in such fear of missing an investment opportunity that she went through with it. Just before the close she ended up with double pneumonia.
I tell you this story because it is a classic case of going against your Good Common Sense - your Godchip - whispering to you to follow It. It only feels Good. When you constantly go against your Godchip's direction, you move counter to your Good and it feels bad. And done continually, moving against your good, you end up sick and find yourself in situations you don't like.
So now the lenders find themselves in a financial situation they don't like. Many borrowers find themselves in situations they don't like. And borrowers and lenders alike had full benefit of their own Internal Guidance Systems - their Good Common Sense - to have avoided this altogether.
There are no victims here.
So let's begin to resurrect an old fashioned, inborn gift that we all came in with and still have benefit of counsel. Consult your Common Sense - the wisdom offered up from your Godchip which only has your best interests and joy at heart.
thanks for reading!
Kath
Labels: applied spirituality, Common Sense, mortgage lending
posted by Kath at
10:46 AM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home