On October 8

On October 8, 2008, I received an e-mail letter from Alex Perriello, CEO of Realogy. Realogy is the parent company to Coldwell Banker, Century 21, ERA, Southby's and several other real estate brokerage entitities. The letter is a request for every agent to "Save the Dream" by adopting one property going into foreclosure and to contact the lender in an effort to find a "workout" solution. Click here to see letter from Alex.

Thank you for the letter. We have been discussing this issue for quite some time in our weekly sales meetings. In several instances, agents have advised their clients who are in financial trouble to make contact with the lender immediately. The client was rebuked and told that nothing could be done until they were three months behind on their mortgage. In more than one case the agent has made contact on behalf of the client and told the same. In one case the client confided that they had lost employment, and were making house payments from their 401K, but that it would run out in five months. They soon realized that they did not have any equity, but wanted to save their credit and avoid the indignity of a foreclosure. Contact was made, and while we had a buyer for a short sale scenario, nothing could be worked out and the home was foreclosed upon. We are in Michigan, which has a six month redemption period, so the client will stay as long as possible, rent free. Seems like a lose - lose ending. Make it lose-lose-lose, because the agent spent many many hours working without pay, and invested much emotional energy trying to keep this property from foreclosure. Sorry Alex, but I won't be asking her to "Save the Dream", until those emotional wounds have healed.

If you have not done so, it would be appropriate for you to take the "Save the Dream" challenge yourself, and either experience the joy associated with the successful negotiation of a "work out", or experience the utter frustration of not having your proposal given consideration and your phone calls not returned.

While I believe the real culprit in this mortgage crises, hides in the Congressional directives (Community Re-Investment Act, 1977), that mandated FNMA and FHLMC to make loans that responsible bankers would not put into their own portfolio, NAR (National Association of Realtors) and the MBA (Mortgage Brokers Association), just shook their heads and went along with the crowd. It certainly made the selling and financing of homes much easier. It is not hard to find people who claim they "saw this coming", but it is very hard to find anyone who was giving their concern much more than "lip service", and it is evident that no one was effective in preventing the problem.

Your letter is well intentioned and mentions many organizations supported by Realogy, including Habitat for Humanity, Easter Seals, MDA, Big Brothers Big Sisters, Toys for Tots and Make-A-Wish. We have supported some of these organizations, as well. As a leader in the Real Estate business it would have been more important and more beneficial if you could have used your influence to help our industry side step the lending practices that threatens to destroy the American Dream. These practices continue today. Representative Barney Frank, Chairman of the House Financial Services Committee, reported H.R. 6694 out of committee, on September 16, 2008. This bill allows for Downpayment Assisstance for home buyers. Rep. Frank, reported that the bill is certain to pass in the House of Representatives and has the approval of HUD. Frank urged "What you want to do now obviously is talk to your senators. We think it will go through there - it has the approval now of the Secretary of HUD." HERE WE GO AGAIN! To put a buyer into a home in which he starts out with negative equity, in a declining market, is absurd! It sets the buyer up for failure. It re-creates the very problem that other Congressional Committees will be investigating. This bill has the support of NAR. Alex, if you are serious about having Realogy involved in the solution to our mortgage crises, the first step is to use your influence to stop this insane lending practice.