Perspective

For many who read my work, you know that much of what I write is personal to me - personal as my family lost our home to foreclosure in the aftermath of this country’s last bout with inflation; personal as I sacrificed years of my life thinking I was righting financial wrongs and curing our financial system after the so-called “subprime crisis” and personal because I have been a slave to debt. I know what it means to struggle, to not have heat or electricity, to not have enough to eat, to fear the postman for what bill he may bring. Many in our country are struggling right now to put food on their table, pay their bills and care for their children. Our Forgotten Americans were toiling as our politicians obfuscated. Somewhere along the way the grift became the goal, and the citizens of our country an afterthought.

Based on what we are learning grift as goal could have been going on much longer than we thought. I fear some of us may not be able to absorb this new information, blinded by the comfort of our own position. What I would ask from each of us in the coming days is to listen, to be open, to probe, to discuss and of course to be wary. Each one of us has had some experience that has squarely put us in conflict with a prevailing narrative. Yet we usually internalize that experience, shaming ourselves pre-emptively to avoid being shamed by others. That is exactly what those in power hope we will do - sit in shame, alone, with only the blue-light to guide us, eschewing our shared humanity.

Most of you know that I have driven across the country to challenge the housing shortage narrative that has been shouted from every hill and valley by our traditional media. I recently shared two articles with you that now also bring the housing shortage into question. When I left for Nashville and Austin on that very first trip in 2023 - the day after Super Bowl weekend - I did so with less than a 1,000 followers and conviction. Mainstream had no truck with what I was saying, and my industry was laughing at me, taunting me. I needed proof.

When I returned with bad photos and eyewitness testimony, it did not matter. When I shared data, it did not matter. If the media could get this so wrong, aided and abetted by shills and bots, what else could they be getting wrong? I then had to ask myself as well what did I misunderstand about my own personal experience? What cognitive dissonance had I buried in my psyche? You see I too was a true-blue useful idiot. I had believed that we were all trying to fix the mortgage industry and so did many of my colleagues. What we didn’t realize was that we were just ambassadors of dupe who worked tirelessly as the fat cats got fatter.

When I left GMAC and went out to work with other nonbank companies, I was confronted time and time again with leaders who had no desire to implement the letter or the spirit of the changes needed to ensure we never found ourselves in that amount of distress again. At every turn, compromises were made. I internalized what was happening as my fault and these actors as the exception…they just didn’t know better. Nonetheless, I saw each of these “turns” as a threat to my livelihood because I understood the powers of the Consumer Financial Protection Bureau (CFPB) in ways that none of the new nonbanks could - they had yet to become a focus of regulatory ire.

The CFPB’s national servicing standards were borne of the Attorney General (AG) settlement that the top-five servicers signed.

Exactly 13 years ago today this settlement was signed and became the blueprint for the CFPB’s national servicing standards. The creation of those standards and the roadmap to implement them was a collaborative effort between the Consortium of five (Chase, Wells, Citi, B of A, GMAC) - a meeting of competitors to create standards for the greater good. Before each meeting an anti-trust statement was read.

You may (now) know that you don’t get to choose your mortgage servicer. This may have been explained to you at the closing table, but probably not well. Inevitably, after receiving a servicing transfer notice shortly after that closing, borrowers call in demanding to know what the heck has happened. Even if they watched The Big Short, they are still clueless as to how this massive government securitization machine works. The idea behind the CFPB was to give voice to consumers who were held captive in this system. It’s hard to actually fathom that when you take a mortgage backed by our government agencies (and 85% of them are), you lose your consumer right to choose another servicer. But that is indeed how it works. The only way you can escape is through a refinance - which is not an option available to everyone - and even then, depending on your originator, there is no guarantee you won’t end up right back where you started.

Believe it or not many of us initially welcomed the CFPB and its new standards we helped craft. Those standards cleared up confusion and got rid of some nonsense that the Fed had us doing under the Consent Order. Although most of us left to do the cleanup did not participate or benefit from the madness that was the runup to the GFC, we felt duty-bound to help our organizations make amends for the financial destruction that befell so many hardworking Americans. Like scolded children, we were grateful to have guiderails where they had not existed before, not understanding the system in which we participated would never allow those guardrails to withstand.

What do I think of the news that the CFPB is coming under scrutiny, that some activities will be paused and priorities questioned?

The linked article above was published as I was writing this missive. By sharing my personal experience, I hope to give you an alternative perspective to view these events that are happening in real-time. After reading about my experience, I implore you to ask yourselves who exactly the bureau protects. Additionally, today I will discuss three other recent initiatives and their potential impacts to residential and commercial real estate: the offloading of government-owned properties, the mass resignations and return-to-office orders. Commercial and residential real estate are inextricably linked no matter what you are being told. It will matter where these buildings are as well as where these employees live.

Let’s begin…