Mood of the Market
Translation: We don't want the government to limit our ability to mortgage our homes when values are skyrocketing, because we want to be able to max out the house we can buy for the money.
But when those adjustable-rate mortgages (ARMs) start adjusting, our maxed-out neighbors start walking away and the resulting foreclosures cause property values to plummet, while our craving for government protection from predatory lenders, liar's loans and confusing boilerplate loan docs takes a steep uptick.
Do real estate consumers crave information, education and advice just as much -- maybe even more -- than traded-asset investors? Absolutely. And just like stock investors, housing consumers also want government protection from lenders, mortgage brokers, agents and themselves, after their own decisions have spanked them with the consequences of a largely unregulated mortgage market. What remains to be seen is how long the desire for protection will last.
I suspect it will last as long as home values are low and rates of foreclosure and negative equity are high. But I hope that the lessons from this national tragedy -- massive losses in wealth, jobs and families' homes and health -- including the need for more intense mortgage market regulation, do not disappear when property values start to make a comeback.
Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.
|Contact Tara-Nicholle Nelson:|
|Letter to the Editor|
Dig into the #C21EatSlow campaign
What's Your Home Worth?
Do you know who plows this street?
ZIP code profile: 94110