As the popular campaign slogan goes, “Change you can believe in,” may just be closer than we think. Anyone who has been even half way keeping up with the news and the slew of companies either going under, merging or having to completely start over from square one with new policies and procedures, knows that change is happening to America’s financial world whether we like it or not. Some media outlets have, and still are, giving a sense that the sky is falling and that we all need to take cover and run. However, I read a refreshing article this morning that took a different, more positive approach. Today, The Mortgage News Daily gave a few quotes from important political leaders that showed that perhaps this wake up call is exactly what we need. Americans have been criticized for not even knowing how to balance their checkbooks, understand the importance of a savings account, or recognize the consequences of credit cards. As Former President Bill Clinton said, “people now recognize all over again what they had to learn in the depression and two or three times since, which is markets, if unaccountable at the margins, will self-destruct. They will cannibalize themselves. So I think we've learned that. Listen, if we can just get out of this thing now and get the show back on the road, we will have learned quite a lot that's good for us."
I’d have to agree, the sub-prime boom gave many borrowers a false sense of how much home they could afford. This false sense has lead to the melt down of many top financial lenders who have learned the hard way why sub-prime hadn’t run rampant in the past. Americans have to take a step back and take the time to learn how mortgages work, how to save for a down payment and why loan limitations exist. I have always tried to educate my clients as to how much home they can realistically afford with all of life’s little surprises but now, it seems as though that the national credit crunch is teaching the lesson a lot more firmly and with more permanence than I could have ever done alone. This is going to be a tough lesson, but an invaluable lesson for us all.
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