Siren's Song

Long ago I practiced general law. I did a little personal injury, a little criminal law, and a whole lot of just about everything that came in the door. Before long I decided that in the practice of law my income sometimes depended upon my ability to convince others of something I did not believe myself.

It didn’t take long for me to decide that I really wasn’t very good at trying to convince someone else of a fact I did not believe. I know that generally the system works, and that each lawyer usually presents the very best side of his (or her) client’s case, realizing that the attorney on the other side will do the same, and that the system often finds a reasonable compromise. I have a decent suspicion that more often than not the outcome is fair. Nevertheless, I was still never creative enough, if that’s what it is, or in some other way lacked the basic ingredient that permitted me to be good at selling something I didn’t think people should buy.

Lacking that skill, I practice Real Estate Law.

Now, the invitation to overstate, and sometimes to misrepresent, has followed me into real estate. The shocking weight of the anchor that real estate has become is dragging business down and the economy with it. Everyone wants an easy solution.

Advertisements are appearing that “short sales are easy” and “we can get you out of your mess” as well as other enticements to a quick and easy fix. Those advertisements are not true. Those ads do not fix the problem; they threaten to compound it. Our job as professionals is to try to help people figure out why they are in trouble with mortgages, and to deal with mortgage debt truthfully, and hopefully, creatively.

Long term, these problem debts can best be fixed if we understand why they happened. Some debtors were flipping and got caught; some converted credit cards to highly leveraged home equity loans, and others got caught in the variable rate mortgage trap and can’t get out. What they have in common is that they are all over mortgaged.

The fix to each of these problems may be the same, though the cause is different. If the fix is to get rid of debt-ridden property, then the owner must price it to sell and deal with the difference. The Bank doesn’t owe the owner debt forgiveness, and he probably won’t get it. But nonetheless, our clients must be encouraged to deal with the problem.

There may be other fixes. I suggest the client find a professional Realtor, Accountant, or Lawyer whom they trust, and discuss and agree on what he or she will be paid for honest advice and service. If the solution is to sell property they can’t afford to carry, then sell, even if it means selling for 2003 values. Please don’t heed 2:00 A.M. T.V. ads to fix the problem quickly and without sacrifice. Many of those “solutions” will end up in the court system as someone’s fraudulent effort to take advantage of someone else’s misery.

The real estate industry may be skinnier, but we’re still here, and we can still make sense out of chaos by following the rules.

The sirens are singing. Lash yourself to the mast.