What happened to personal responsibility in investing? It’s been bad enough that so many bailouts are being proposed for people who rolled the housing "dice" and lost. Now Robert Shiller, author of Irrational Exuberence is proposing assistance for homebuyers going forward as well. Among his suggestions to "get out of this mess" he advocated: [Thanks L!]
He’d like to see is subsidies for financial advice, so people aren’t making mistakes going to a mortgage broker to find out how much house they can afford.
I have a more affordable suggestion. Rather than subsidizing financial advice [Does that sound like it has potential for abuse, or what?] here’s my suggestion. How about mandating the following be printed on every page of loan applications:
If you don’t understand this and aren’t certain you can afford this home, DON’T SIGN THIS PAGE.
If folks can’t afford hiring their own financial expert, they have no business buying a house.
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Amen…and I’m not even religious, having read the fine print.
I like it, and I’m going to use it on my buyer/client addendums (that also urge buying clients to consult an expert in personal finance matters).
Todd-
Agents really need disclaimers these days. L was telling me about attorneys now advertising on TV who want to represent people going into foreclosure. They indicate that they can go after mortgage brokers and agents. I expect lawsuits with people claiming that their agent deceived them. [There was in fact a case in CA, but the client lost.]
What a great time to be a RE attorney!