Who are the 1 percenters?

Solano Real Estate Scene: Jim Porter

Article By: Jim Porter – April 7, 2012

As a citizen of the United States of America and a mortgage banker for 25 years, I understand the middle-class frustration today with the economy and their financial security.

Seventeen trillion dollars in debt is a bit more than just being a little overdrawn in your checking account. It feels like the rich are getting richer and the poor are getting poorer while the middle class and the upper middle class pays all the bills. The interesting thing about the occupy and tea party movements is that many of these folks are angry, but the anger is pointed at several directions such as the government, Wall Street and the educational institutions.

What we as a community need to understand, is the 1 percent we need to focus on is the enemy. The enemy is the 1 percent of the world’s population that is evil in one way or another.

The 1 percenters I am talking about are not just Osama bin Laden, Saddam Hussein and Bernie Madoff, it is the 1 percent of our people who are greedy, selfish, criminal and dishonest. People who do not care about anybody other than themselves and their interests. The individuals that don’t care about the consequences of their actions.

For heaven’s sake, to blame the wealthiest 1 percent of our great country for this mess is crazy. Warren Buffett, Bill Gates and Oprah Winfrey give billions to charity. The seven or eight 1 percenters I am privileged to know here in Solano County give huge amounts of time and money, giving back to our recovering community and to charity.

Yes, 1 percent of this 1 percent is evil and or selfish and greedy, but only 1 percent.

Our real estate market was attacked by this 1 percent from 2004 to 2008. In mid-2005, the highest level executives in the largest mortgage companies and banks of the world were warned that 60 percent of every mortgage closing in California had some level of fraud involved in the transaction. It took two full years after this warning from the FBI and other regulators for the large mortgage banks to stop the insanity of doing $600,000 loans to folks with marginal credit, zero down payment and little or in some cases no income.

Why would a bank do a loan for someone who had no chance of ever paying back the loan? Greed is the answer.

Was this 100 percent of Wall Street? No way, but certainly a bubble was being created and the MIT, Stanford and Harvard grads that run many of the large Wall Street firms knew the residential market would likely blow up.

Why didn’t the large banks police themselves and stop the liar loans in 2005? Because they were selling these loans to investors, Fannie Mae and Freddie Mac and making a fortune lending out other people’s money. Housing supply was not even close to keeping up with the demand and thus values and home prices doubled in only three years, led by the huge Wall Street homebuilders in places like Solano County.

Why would a mortgage company that is owned and operated by a large homebuilder sell a loan and a home to a family that they knew could not afford the house? Because the loan officer and the underwriter that approved the loan wanted to keep his job maybe? The builders wanted to make huge profits and were not concerned about a bubble or the consequences of their actions.

American Home Week is all about the American dream and the full-time real estate professionals that work here in our community and truly care about their clients. The evil 1 percenters who jumped into the real estate and mortgage business back in 2004 and 2005, because it was easy money and yielded huge profits, are no longer in the business. A few local crooks are in jail and some have lost their license, but many have just slipped away into the fog.

This is war and our enemy is the 1 percent of the world’s population who are evil. We can win this war if we work together and learn from our mistakes. We can never again let strangers enter our market and perpetrate crimes against our Solano County neighbors.

Jim Porter, NMLS No. 276412, is the branch manager of Solano Mortgage, NMLS No. 1515497, a division of American Pacific Mortgage Corporation, NMLS No. 1850, licensed in California by the Department of Financial Protection and Innovation under the CRMLA / Equal Housing Opportunity. Jim can be reached at 707-449-4777.