The Hou$ing Cri$i$

We've been thinking about this for some time now, but have been too busy to blog about it.

In all the finger-pointing (in many cases, deservedly so) concerning the recent problems in the housing market, it seems that one very culpable group got left out: the realtors.

The bankers weren't exactly chasing people down on the street and trying to twist their arms into taking out mortgages that they couldn't afford. And people weren't just going into banks on their own initiative and begging to take out loans they couldn't afford to re-pay.

So who talked both sides into these transactions? You guessed it -- the realtors. They're the ones who told people that it would be OK, because real estate values "always" go up. And in many cases, they flat-out lied to the banks about the ability of their clients to re-pay those mortgages.

The realtors were in the catbird seat in that they got their money up-front, no matter what eventually happened to the other two parties to the transaction.

Risk is an integral part of our free-market, capitalist system. But risks should only be assumed after a rational analysis of all aspects of a situation. No one should be conned into accepting a risk.

As a side note, we can't help but wonder what part realtors played in getting that misbegotten "Community Reinvestment" Act passed.