The real estate market is declining, and apparently some homeowners are more disgruntled than others:
ROOSEVELT PARK, Mich.
A man upset about a property transaction fatally shot a real estate agent in the head during a meeting Tuesday morning in the victim’s office, authorities said.
Troy VanderStelt, 34, was pronounced dead at 12:45 p.m. at Mercy Health Partners Hackley Campus in Muskegon, said Muskegon County Prosecutor Tony Tague.
A suspect was arrested a short time after the shooting at a home in nearby Norton Shores. Tague identified him as Robert Arnold Johnson, 73, of Roosevelt Park.
So what set off Johnson?
Tague told WOOD-TV in Grand Rapids that Johnson believed that VanderStelt took advantage of him in a real estate deal. Johnson bought a house through him in 2005, then recently decided to sell it and went to a different real estate agent. The second agent told Johnson that, because of the slumping housing market, the home was not worth what he had paid for it.
The actions of Johnson were clearly unjustified, but this should be a wake-up call for the National Association of Realtors, who continues to assure consumers that "It’s always a great time to buy".
Consumers should be made aware that all investments carry some degree of risk, and the NAR should make educating homebuyers a priority- if only for the wellbeing and safety of their members.
(twist thanks a Doom commenter for an important correction)
Consider the scope of the bubble. MILLIONS of homes will likely be foreclosed before this is over.
Now, Realtors are certainly not the only ones to blame for our economic problems, where, e.g., our industrial base has been allowed to decay, and economic policies have been implemented putting us is competition for the lowest labor cost with third world countries.
BUT, that said, Realtors and the REIC have done a lot of damage, perhaps irreparable damage, to our economic system, all for that 6%, and they will suffer as a group for that. How many people were talked into making some really, really bad decisions by a Realtor over the past few years? Life altering decisions. Just by way of example, how many Suzanne Researched This situations are really out there? (See, e.g., http://seattlebubble.com/blog/2007/08/22/suzanne-researched-this-part-2/#more-1040 , and listen to the audio of the caller.)
How many guys were beaten over the head until caving in and buying something when it didn’t make any sense? How many of those guys will end up financially ruined, divorced, unable to get jobs in their fields because of bad financial decision-making, and feeling like they have little or nothing left to lose, at the hands of a Realtor who would say anything for that $30k commission, and knew how to push the buttons of that wife? Some of those guys will lash out, and you can bet that this is not the first, nor will it be the last, Realtor who gets killed by someone who lost everything.
However many of them you think may, or may not, deserve it, lots more are coming - if you were a Realtor in 2005 pushing product by telling people real estate never falls, and buy now or be priced out forever, and don’t worry, you can always refinance, keep looking over your shoulder. Someone may be coming for you.
73 years old and he still doesn’t understand what’s important in life. Tragedies are never one man, one act plays.
This is #35 in Greenspan’s Body Count.
twist -
Tanta has just picked up this post. Give yourself a pat on the back for giving her an easy topic
Hopefully she’s got the strength to attack the Lehman take on the GSEs and Rule 140. WireGuy needs the backup.
By the way, did you see that Aaron’s got a profile in the New York Times today? It’s not a good day in the financial world when our blogging sector is noticed
John-
I’m always glad to see Tanta posting- I think she’s one of the wisest voices in the blogosphere.
I do disagree with this her on this one however. It’s true that there are always random nuts who commit murder for strange reasons- but as our friend WC Varones points out with his “body count”- this is part of a trend. [Despair to the point of taking a life over RE problems- I haven't seen a pattern of shooting realtors.]
People need to view financial setbacks as an expensive education- not the end of the world.
VanderStelt is the victim, Johnson is the (alleged)shooter.
tarsus4 -
Tarsus4-
Oops! Thanks for keeping me straight- the post has been edited.
When flipping houses is outlawed, only outlaws will be flipping houses.
There is enough blame to share in the real estate mess. As an appraiser I saw the handwriting on the wall several years before the bubble blew up. It began with 100-125% equity line loans. Lenders took their foot off the brakes when they allowed brokers and loan officers, working on commissions, to make no doc loans available. When people couldn’t come up with a down payment, they arranged second mortgages to bridge the gap. Now here comes the real crime. Lenders paid mortgage brokers bonuses to boost the loan to a higher interest rate, change it to an adjustable rate and place a pre-pay penalty. Often this was done under the table with the buyer ‘thinking’ the broker represented his best interests to obtain the best rate and loan available. NOT SO! Lenders bought out the broker and loan officer to boost the value on trade of the loan enhancing both lender and commissioned broker. The real estate agent had little to do with it and seldom made more than a finder’s fee to steer the buyer to a specific lender. Often both agent and buyer was ignorant of the ‘deal’ worked out by a lender and his ‘front’ person. Sure people didn’t ask questions, yes they were ignorant but when was that a crime. Lenders are getting exactly what they deserved because they took those bogus loans and hid them in bundles, selling them to hungry investors in equity funds who did not look closely at the package. No one is regulating our system, not the Fed, not the banks, NO ONE! Why? Because we have been sold a free enterprise system that what ever the market will buy and bear, so be it! So everyone is a little to blame for a huge mess and it will not end anytime soon because there is a glut of foreclosed housing dragging the market down, sitting vacant, deteriorating. The credit that was once available to buyers that could buy these homes is PERMANENTLY GONE and will never return. This is no temporary slump, the bubble is permanently broken.
“Consumers should be made aware that all investments carry some degree of risk”
Apparently, it’s not just consumers that need to be aware of risk! What a lunatic.. rather than take the loss and get on with life, he’s going to die in prison. I feel for both families.
I was going to comment, but Jim at law put it so well that I can just shut up. I don’t condone violence, but some of the realtors really asked for it. You can’t keep screwing people over with sales pitches and not expect any backlash.
heretoday,
as a mortgage broker who works hard for his family I will partially agree with you. However, let us not forget the appraisers who would “get to the value” to make the deals work. The agents, the banks, mostly Wall Street, brokers, and plain uneducated folks are all to blame. Heck even the very educated got sucked into this one. Everyone wanted to truly beleive the prices would always go up.
Fortunes come and they go. They are certainly not worth killing over.(Although at the time it may seem like it)
heretoday stated:
“The real estate agent had little to do with it and seldom made more than a finder’s fee to steer the buyer to a specific lender.”
If agents made a finders fee then they violated RESPA. If they followed RESPA and performed “a substantial contribution to the lending process” in order to legally earn that fee, then they were explicitly aware of the loan terms for their client. There is no middle ground. This is why few REALTORS are engaging in the lending process now.
About a month ago I was following up on a foreclosure (pending fraud suit) at a large builder in Central Florida. Although the builder had nothing to do with it I did meet with the REALTOR in the sales office for some background info. The builder’s previous sales staff (employees) had left and/or been terminated, and the sales job handed over to a brokerage. Nice lady. Part time job, and she was making plenty of sales. Why? Because this large national builder had slashed their prices by 40% under the 2005 prices. The prices were effectively at 2002 levels.
I casually brought up the incredible price drops and asked if any of the current residents that had purchased previously were miffed. She got real quiet and mentioned that two individuals had threatened her in the last month. She even filed a police report on one of them. Mind you, she has nothing to do with this builder’s pricing, but as the only “representative” of that builder in the community she was clearly vulnerable.
heretoday (#10) -
“The credit that was available to buyers that could buy these homes is permanently gone…”
Actually, I’ll bet there is credit for people who are creditworthy and put some money down, and borrow at a reasonable loan-to-value ratio. If the world would wake up to the true value of the homes in question, I’ll also bet they’d be occupied sooner than later.
Good boy, Igor: “Deflate”
Nobody had a gun pointed at Robert Johnson head when he bought the house. He is also to blame. There would not be drug dealers if there were no users.
agnostic,
What is “true” value anyway? True value is a relative term. If the homes in my neighborhood that sold in the last 3 months all sold for $1 Million, would that mean my house is worth $1 Million? What if they all sold for $50K, would that mean my house is only worth $50K? My main point is that “true value” is the price that the open market is currently paying for a product.
There are some homes in certain areas that are selling at pre-bubble prices and people are not buying them. Why? Buyers can’t qualify or they are remaining on the sideline. These homes “true value” should probably be worth at least pre-bubble prices, but since there are no qualified buyers, nobody is buying them which drops the “true value” of these homes.
surak,
True…there was no gun pointed to the buyers head, but that does not mean that the realtor did not swindle the buyer. If I had a Corvette for sale and told you that it only had 30K original miles on it with no accidents, but you bought it and later found out that the car had been totaled and I changed the odometer, and the engine really had 230K miles on it, does that mean it’s your fault for buying my rundown car since I didn’t point a gun at your head?
Without knowing ALL of the details, I do not see how we can either judge the buyer or the dead realtor. Did the agent really tell lies and cost the buyer his life time savings? Is the buyer just trying to blame the downturn of the housing market on the realtor? I don’t know, so I won’t say who is at fault here. Clearly, the buyer shouldn’t have killed the realtor, but again, did the realtor reap what he sowed?
uuuthe-
It is entirely possible that the agent did something worthy of a very nasty lawsuit. I agree that without the details, it’s hard to know whether or not the realtor had SOMETHING coming to me.
All we do know is, whatever he did, it wasn’t worthy of the death penalty.
I do appreciate Tobby’s comments here. (#15)That perceived equity in a house often represents a comfortable retirement, college for the kids and that vacation to Aruba, and people are thinking that this is being “stolen” from them- often not realizing it was never real in the first place. Many people are distraught, and sometimes distraught people are dangerous.
uuuthe (#18) -
I agree that the homes are worth what they sell for. And yet you contradict this/yourself in the next paragraph: “There are some homes in certain areas that are selling at pre-bubble prices, and people are not buying them…These homes true value should be at least pre-bubble prices” Why should they be at “at least” pre-bubble prices? Homeowners can gnash their teeth all they want regarding declining value, but if the “service economy” was all a house of cards, then why aren’t pre-bubble house prices part of the deck? The *FACT* is that housing prices historically are underpinned by incomes, pure and simple. If incomes aren’t there, then prices/values won’t be there either; since those pre-bubble offers aren’t selling, then there really isn’t a market at those prices, is there?
Twist’s comments in #21 are spot on - the equity/value in the house was not real unless it was taken advantage of, for example, through a sale during the bubble and subsequent rental.
My bottom-line observation for this whole thread is that a person who believes their agent is anything more than a salesman is asking for trouble. We don’t know what was said between the unfortunate Mr. Johnson and his agent, but in my opinion the majority of the blame, in this case and the many to come, lies with the appraisers who essentially signed off on any value that was presented without regard for local income levels.
Appraisers catch the flack but most are trying to make a living like everyone else. As an appraiser, I lost clients because I did not ‘make the value.’
Appraisers have a lot of latitude but most appraisals are reviewed by underwriting departments whose job it is to look at the deal to see if it is valid. Most underwriters have subscription access to the same database/comparable sales that appraisers have. They can see and are experienced enough to see if an appraiser is ‘making’ the value or just reporting it. Most people fail to understand the role of an appraiser and how they determine value. Value for a financial transaction is always in the comparison of value of recent sales in a subject neighborhood, market value.
Contrary to what most believe the problem that is causing the housing crisis is not in sales of houses but from refinancing. Sales are pretty much what the market will bear and people who shop for houses know their target market. The real real-estate fall out came with people refinancing loans, pushing the value based on rising prices, a glut of new construction with builders giving back huge rebates, pushing the values so they could rebate 10,000-15,000. (Like oil futures?)Prices rose quickly, people refinanced within a year or two of purchase because they had speculative ‘equity’ in their homes. Many spent their refinance ‘cash-outs’ to live on or pay the notes on their new loans. When the cash ran out, if they could refinance again, many did. So you have massive inventories of houses that are maxed out with prices falling.
Now appraisers are faced with trying to ‘find’ the true market in a declining market. Lenders still don’t want to hear a neighborhood is ‘declining’ or the the market time exceeds 6 months so we have major problems that are in our industry.
YES, I said just beginning. Those who purchased houses or refinanced on no-doc/liar loans can no longer buy. Losing their homes in record numbers with no one to purchse them. Lenders are cutting these foreclosured bank owned houses to 50-60% value, further damaging a declining market, in order to dump them for a quick sale. Now the appraiser must filter through these dumped houses and find a normal arms-length sale, often with 75% of sales in distressed category in some neighborhoods.
It isn’t an easy task and yes appraisers who can’t adapt are just no longer appraisers. In the past lenders blackballed appraisers who did not ‘deliver’ and little has changed at this point. As long as you have loan officers and agents working on commission, the problem exists.
Appraisers are turning in their licenses everywhere with fees declining, increasingly hard to collect. Many loans do not make and no one wants to pay an appraiser until a loan closes. Pressure has actually increased. Expenses are tremendous to a license, subscriptions, databases, equipment, travel expense (gasoline), privilege tax, MLS, not to mention office expense and continuing education costs. I have turned to selling real estate and review work to supplement. Sales are declining with loans difficult to get for my buyers. It is a difficult situation that is only getting worse, not better.
Heretoday-
The cast of characters that “gamed the system” was rampant. The problem lay with crooks- it doesn’t matter really if they were buyers, sellers, brokers, appraisers… whatever.
There were heroes out there too. The agents who said “save your money” the appraisers who refused to cave, the brokers who refused to provide a loan for some ding-dong they knew would go down the street. Kudos to all of them.
Sadly we have had a system the has rewarded unethical behavior and punished honesty and decency.
As long as that’s the case, we are going to have problems.
Heretoday -
“…lenders blackballed appraisers who did not deliver…” This is exactly how the bubble was allowed to flourish; this sale is slightly above the last comp which was slightly above the prior comp which was slightly above the prior comp. I guess the lenders needed some third party to point the finger at in case of disaster, but I haven’t heard of any cases where the lenders have tried to take appraisers to court for fraud.
It’s nothing personal, but I’m just wondering, out loud, if the buyers were willing to pay a price and the lenders were willing to lend at that price, what is/was the point of the whole appraisal process?
Agnostic-
L was telling me about the whole appraisal issue.
Apparently there was no appraisal required prior to the S&L bust, the theory was that an independent appraiser would protect lenders and borrowers.
The trouble is, it’s hard not to “Dance with the fella what brung ya.” How independent is an appraiser who is a favorite of a lender or an agent? Appraisers, like everyone else, need to work for the guy that pays the bill.
Obviously the system is broken. For appraisals to be “independent”, you would need to call a central pool and never be certain who your appraiser was. When appraisers never work for the same person twice, the pressure to “hit a certain figure” is gone.
The other option is to quit pretending and make appraisals optional. Maybe then everyone does a better job of doing their own homework.
Twist -
If the theory was to protect lenders and borrowers, I’d have to say the appraisal industry is the poster child for useless fee-collecting industries. Unless there were some (heroic) appraisers who actually had a conscience and didn’t sign off on values, I’d say the number of lenders and borrowers who were actually protected could be counted on the horns on my head.
Agnostic-
I suspect the reason that my landlord was unable to sell after 18 months on the market is that the house was overpriced by around 40%. [My best on the value of this place.] He’d like to sell the place to me, but until this guy is touched by the Reality Fairy, I’m not interested.
In theory an independent appraisal would shake him out of his dream world and keep potential buyers from paying that much. You are right though, it’s not going to happen.
If banks are smart they’ll have a thorough in-house appraiser. If buyers are smart, they will do their homework. Appraisal or no, there is no substitute for doing the research yourself.
Unconfirmed reports have the gunman wearing a T-shirt with the following slogan at the time of the shooting:
Guns don’t kill people; I kill people
Okay, joking aside, the bottom line here is NOBODY ever got “swindled” unless they were looking for something for nothing.
At 73 this Johnson guy has NO excuse for not knowing exactly what he was signing, what the risks were, what his ability to pay was, and what the risks were if things did not go his way.
It is long past time that we as a country quit makig excuses for guys like this. Why is he buying a home at age 73? Did he move? If so, why does he need a mortgage? Is he a first time buyer? Did he trade up because he wanted something “bigger and better”?
To me there are more questions than answers in this article but the bottom line is that the guy got what he signed for and if it is now worth less, well, too freaking bad. I hope they strap him into a copper bathtub, fill it with water and throw a toaster in.
Again: you can’t swindle an honest man.
And, very fittingly, Igor says: GUILTY
Agreed. Fry him.
“If I had a Corvette for sale and told you that it only had 30K original miles on it with no accidents, but you bought it and later found out that the car had been totaled and I changed the odometer, and the engine really had 230K miles on it, does that mean it’s your fault for buying my rundown car since I didn’t point a gun at your head?”
UUUTHE,
Information presented to us does not make your statement (see above) a valid one. If Mr. Johnson was angry due to major defects in the huse (structural)that was known prior to closing and not disclosed, then your statement is valid. If Mr. Johnson was angry due to slumping values (depreciation) then your statement is not valid.
If I bought a car (and over paid) for $30,000 (because the owner said that it is worth that much) and then had to sell it and could only get $10,000 for it. Should I shoot the previous owner?
Ah, but what if the owner said “I personally guarantee you will be able to sell this car for $50k more next year.” What if he told you that these cars were collector’s items and had only ever appreciated, never falling in value, even though that was false?
And then, when you went back, he told you, yeah, the market has changed, I was wrong, what can I say - you’re out $20,000. Now, if you please, I’ve got another car to sell today.
You can say the buyer was a sucker, but he was also suckered by someone who was lying to him to make a buck - i.e., fraud, or something morally equivalent.
Now, none of us knows the details of the case on which this thread started, but I assure you, just based on my own experiences, there are lots of cases where Realtors made representations of fact, and pitched opinions about the future as facts beyond dispute, which were abjectly false. If you paid money after someone lied to you, you were a victim, perhaps of your own stupidity, but also of a liar and a thief. Sometimes, thieves get shot, and the rest of us seldom cry for them - we usually breathe a sigh of relief that one more scumbag is off the street.
Igor’s fitting tribute: overdue
Jim -
After I got done laughing, I would say to that person “Who guarantees you?”
“If banks are smart they’ll have a thorough in-house appraiser.”
That is exactly what many did but this aggravated the problem because the lender/bank had a ‘body’ on the payroll who could be tapped if he or she did not deliver-their job was in question. They were less independent than mom and pop appraisers. Management or pool appraisers are all the same animal. They have a list or pool of approved appraisers, when one fails to “play” they pass him or her over for an appraiser who makes the value 9 out of 10 times. Many appraisers do pre-comps for these favored clients so they know on the front end before the order if the value is feasible. The only truly independent way is as the VA does it(and there are few VA loans because of it). The VA assigns the appraiser from their very select and limited pool of appraisers, which you must apply and interview to get on. These appraisers do not owe their livlihood to lenders, management companies, real estate agents, etc.
Most people just fail to understand how things work. It was refinancing up that broke the bank, not sales. Appraisers use actual sales for comps but when inventory is low and prices rise, the market is there, particularly when builders were selling to any live body that walked in the model home, with no money down. The value rose because everyone could qualify to buy. When value rose home owners to refinance on the wave, spend the money and go again in a year or two.
Pure speculation broke the system and it isn’t going to come back because inventory is there and people can no longer qualify to buy!
There are many good points made here and of course some scammed the system, some flipped houses on the wave much like stocks are shorted and sold on the wave but what I saw up close and personal were people duped or bait and switched at the last minute or closing table for a bad loan with no one to represent them except to walk away from the deal. Most people, including smart people won’t walk away from something they have their heart set on, believing all those people at the closing wouldn’t actually scam them. But that is what happened! I saw a loan broker scam his own brother for a dollar at the table and the brother saying “I want a fixed loan” with the broker brother telling him he could refinance in a couple of years when the loan reset. NOT! People who had no idea what the playing field meant and trusted their mortgage broker, real estate agent and banker to protect them. Appraisers who failed to report what they were seeing had no choice but to ride the wave because value is not based on houses, it is based on market demand! Demand was high, inventory was low and everyone could qualify! Who was to put on the brakes? The lenders had the call, the government should regulate the lenders/bankers but no one wants to hear that. The fact is the Fed is meeting right now with the Senate to discuss that very need.
Close the gate after the cow is out with no hope of recovery! That is the rule of the day in our system. Let the market regulate itself without holds. Well we see what happened.
JimatLaw -
You can’t be serious. I mean, what salesperson DOESN’T lie?
“Oh, that dress looks great on you!”
“That shirt makes your eyes look so much more blue!”
“Oooh, the ladies will really go wild for you in that convertible!”
“No, nobody will be able to tell you’re wearing a toupee, I guarantee it!”
C’mon - anyone not smart enough to know this a)should probably have never qualified for a library card let alone a mortgage, b) deserves to get “suckered” (a fool and his money are soon parted) and c) has absoluetly nobody to blame but himself.
My guess is that this guy was talked into doing a 100% cash out re-fi into some sort of ARM and was told that when the loan reset he could just re-finance again and when he couldn’t, and couldn’t sell the house for enough to cover the mortgage, flipped out.
But so what? Did he think there were no strings attached when someone handed him a check for 135K and asked him to sign on the dotted line? He knew EXACTLY what he was doing and was so mad at himself for giving in to his own greed that he looked for, and found, a scapegoat.
They should draw and quarter him and hang his four body parts in front of the NAR, Freddie Mac, Fannie Mae and the Fed as a reminder of what these organizations are capable of.
My $.02
Igor says: sad
In fairness Jim, you are creating a scenario that may have little basis in fact. Trust is the issue here. Everyone knows what should have been done after the fact but thats the scam isn’t it? Find a new ‘nigerian’ con that looks real and acts so real that people fall for it. No one saw the fall until these defaults began to show up in hidden equity bundles to hedge funds and other investors looking for a high dollar buck. They bought the ‘pidgeon in a poke’ so you could say the buyers of these ‘worthless’ investments were actually the mark. Now if you take out the actual MO you see the something for nothing scammed a lot of high dollar players don’t you? Quit blaming the homeowner for being so dumb when it was those who bought the “too good to be true” bundle that boosted the hedge funds over the top. Why didn’t they look at what they were buying? The credit market raters were unreliable? Right!
Think of it a little like the Katrina levee debacle. Everyone ‘knew’ they wouldn’t ‘hold major water’ uh, stand the ultimate test but everyone ‘above’ and ‘below’ hoped they would hold. Well it didn’t, they didn’t and everyone lost, didn’t they?
Well the financial market ‘pidgeon drop’ ‘er uh’ pyramid scheme failed too.
:Again: you can’t swindle an honest man.”
Quick note to IGORance: Why would a 73 year old man buy a house points up your youth and ignorance. Many are trying to elect a president older than that and put him in a WHITE HOUSE.
You CAN swindle an honest (but inexperience) man if he fails to know facts or the risks deliberately hidden from him. Many people walk into Casinos to gamble. They deal with experts and stacked against them odds. MOST walk out the loser regardless of how smart they are.
Heretoday:
You CAN swindle an honest (but inexperienced) man if he fails to know facts or the risks deliberately hidden from him. Many people walk into Casinos to gamble. They deal with experts and stacked against them odds. MOST walk out the loser regardless of how smart they are.
What facts or risks were “deliberately” hidden from him? That prices might fall? That he would lose his house if he didn’t pay his morrtgage? I find it hard to believe anyone could manage to cross the street for 73 years without getting run over and not know those two things. And since he HAD to know that, why didn’t he ask “what happens if prices fall?” “What happens if I can’t refinance?”
The answer: greed.
As for the people that bought the securities, well, if you have a 401k or a pension plan that someone is probably you.
Most telling, though, is your comparison of housing to a casino. It is that type of thinking - that housing can give me “something for nothing”, like a roulette wheel or a hand of blackjack, that caused this whole mess to begin with. Thinking housing will make you rich rather than give you a place to live makes about as much sense as getting a room at the Bellagio and expecting to stay there for the rest of your life because you paid for one night.
Anytime you make a large purchase you are gambling that you can pay for it, will have your health to work and will continue or increase means of income. Greed is not at the bottom of most home purchases. The desire to own a home that will not be worth less than what you paid for it is sort of written into our thinking isn’t it? I suspect you would expect the same.
The man had no excuse to kill his agent. I am concerned that there is a vindictive element in many people now who see no reason for compassion or tolerance for mistakes or inexperience. It is a ‘throw em under the bus’ generation sadly.
So where is your venom for the Fed bailing out Bear-Stearns or standing ‘ready’ to bail out banks/lenders who scammed both investors and home buyers?
Oh, thats just business, right?
Just the opposite - I am more incensed by the Bear Stearns bailout that anything else. If we think what’s his toes who did the shooting took on a lot of risk what do you think BSC did? They should have failed, and everyone who had invested in them should have felt pain; that would have been the only way to teach people that if you engage in risky behavior you are going to get burned.
Sadly, between the Fed’s keeping interest rates too low and the Treasury orchestarting the bailout of Fredddie and Fannie (it’s coming, believe me) the average American is seeing his purchasing power, his wealth and his security erode.
And you can’t be serious about greed not being part of this equation. It was one of, if not THE, biggest cause of the unsustainable run up we experienced.
Fittingly, Igor says: collude
Dogtownsurfer,
I agree with you %100. Most of the people who bought in the last 5 years could not afford the house to begin with. I am all for helping someone out do to a serious health problem (i.e cancer) or something that is totally unforseen. However, greed was the major factor in this whole mess. Greed severely clouds peoples judgement and usually the consequences are severe. However, if the fed (aka taxpayers) bail the major players. The major players will just keep doing the same thing.
Twist (#21) Yes, angry people can get dangerous. If there is a lesson to be learned, hopefully IF there are deceptive real estate agents out there, they will read the news and realize that there can be UNJUST consequences.
agnostic (#22) - My rebuttal to your post is contained in the following line in my first post. However, I don’t think we are really saying anything different.
Regarding the appraisers, I agree that much of this mess was valuing homes which were worth less. Perhaps jail time is in order. Well, the feds are investigating this matter. Hopefully, we get more arrests.
Surak (42), read Jims post (33).
That’s what I am saying is that Real Estate agents should be held responsible for outright lying. Without knowing all the details, I don’t think we can say that the agent had NO fault at all.
As a matter of fact, it is just a guess, but I am willing to bet that some sort of misrepresentation by the agent was probably done. Just a hunch.
Uuuthe-
The rub is, we’ll never really know. The article only said the guy was unhappy because his value had declined. That’s a little scary if that was the only issue he had.
I can’t imagine there was an agent that was active during the boom that doesn’t have a single property out there that wouldn’t sell for less now. If that becomes a shooting offense, they are all in trouble.
That said, it is quite likely that the guy thought his agent was like “Suzanne”- she researched it- he was safe.
Twist -
I googled the victims name and found out more info. It appears that the victim was in fact honest…or at least that what we read. In this case, I do side 100% with the victim. The accused is a total loony toon! He only lost $4K in equity and he took another man’s life? What a sicko!!! Whoops…I can’t judge yet because I don’t know the full story, but from what I can see, the accused is a sicko.
You can read about it here:
http://www.woodtv.com/Global/story.asp?S=8584074
http://www.examiner.com/a-1469834~Slain_Mich__real_estate_agent_fondly_remembered.html