tent city Springfield MA
Image by michaelannb via Flickr

Real estate comes in cycles. From grand booms to even greater busts. The greatest real estate depression in U.S. history is moving full steam ahead right now as it devours countless homeowners in its foreclosure wheels.  Yet, many homeowners that are suffering as a result of their real estate and mortgage purchases are still not aware that buying a home is similar to that of buying a stock or even making a bet in Las Vegas.

The simple reason being is one word, “marketing.” From the day we are born, we are marketed to. Real estate and mortgages are no different than a pair of shiny new shoes in the world of marketing. Well, except for the fact that a pair of shoes does not cost hundreds of thousands of dollars, nor do they come with 30 year contracts that if we break, we are eternally F’d.

One of the grandest marketing campaigns of all time is homeownership, also known as the American Dream. What we all need to understand that this dream is not an actual thing that we can buy or own, but a feeling that is sold to us via clever marketing campaigns by lenders and real estate firms that sold millions of Americans, hook, line and sinker.

Don’t believe me? Maybe 10 million foreclosed homeowners will help you “believe.”

Please don’t get me wrong, there ain’t nothing wrong with buying a home and that being part of your American Dream. It certainly was not a scam because most everyone who had partaken in the forbidden property fruit had the chance to get educated and signed their mortgage contracts willingly. Hence, there is no scam or fraud when it is perfectly legal, no laws are broken and two people enter into a contract lawfully.

Yes, the problems that most homeowners have right now relate to underwater mortgages and unaffordable loans. But the real problem is when they bought, how they bought and their cash flow at the moment. If they simply bought 10 or so years ago and possibly paid cash, I am sure they would not be suffering. But unfortunatley, millions bought the marketing that was sold to them and thus they made a mistake in their purchase decision making.

We can make things more complicated than that, but they aren’t.

Once you start to “get” this and understand that much of what we see around us on Main Street is nothing but clever marketing in order to get us to purchase things we may or may not need.You will then understand how to make wiser buying decisions in the future. It doesn’t matter if it is a new shoe, purse or house we don’t really need. Most all us us are guilty of making a bad buying or investment decision.

Unfortunately, a bad real estate purchase decision can ruin lives and whole families.

Literally, a family may suffer a foreclosure and then as a result, a divorce and or death may come from an American Dream gone terribly wrong. I have seen the good bad and the ugly over the last three years. From divorces, 30 year prison sentences, scams, million dollar frauds, robberies, home invasions, torture, kidnapping, suicides and murders. All in relation to real estate and mortgages. This ain’t no joke folks.

Personally, I see no other business that compares in relation to headline news except quite possibly the drug business. The only difference is that this business is legal and it’s the big money that attracts everyone into the real estate game. Parents, grand ma’s, Pastors, salesman, con men, banks, government and dreamers all in one big legal property pot to duke it out with one another. Each fighting for their own best interests. Often those interests are based on pure greed.

Back in the subprime days, it certainly seemed like we are living in the best of times. No one complained as our country was partying like the roaring 20’s, but only a much more revved up technological version from that of 100 years ago with fast mortgages, fast escrows and the greatest growth in homeownership that our nation has ever seen. That party has come to and end and has President Bush once said, ” Wall Street got drunk. Now it’s got a hang over.”

Unfortunately, Mr. President, this one is a killer hangover for homeowners.

We all know what the end result has become of the real estate and mortgage party. There has been a lot of blame thrown around over the years. To be honest with you, it is becoming quite counter productive. Even the BS solutions that have been initiated or proposed have been laughable at best. So, I think it is in all of our best interests as the people on Main Street to take matters into our own hands individually and do what is best for our families and futures. If we do this with our own families, the affects will be as group. If you sit and wait for big banks or government to save your ass, well, then you may be waiting until the sheriffs come take you out because that help isn’t coming.

These fast mortgages and growth in homeownership has ended. The foreclosure era is here. Loan modifications are just one great conspiracy. The Great Homeowner Depression has just begun.

You really have some tough choices to make if you’re a homeowner living through this real estate and economic madness right now. The choices you make now will forever shape your future. Whether you choose to hold’em or fold’em will make a huge difference in your future. Whether you are counting on banks or government to come save you, will have a big difference in your future. Your choice to focus only on a loan modification or short sale, instead of using that energy to search for new opportunities to increase your income may seal your fate.

Yes, this may be a momentary time where you are smack dab in the middle of a depression and actually suffering from a large dose yourself,  but it is certainly not the end of the world. It is the decisions that you make from here on out that will determine how long it lasts and if you do in fact get out of it.

Choices based on education, counseling, wisdom and being proactive will prove to be effective game changers for those homeowners that choose this method of dealing with their depressions. Those that choose to act out of emotion, fear and be reactive to their problems will seal their foreclosure and quite possible, life long fates of misery.

The question’s are, “What are you going to do to survive it? Are you going to become a victim or a survivor?”

OK, I figured it would be best to finish this depressing article off with a little laugh that also has a serious message for those that “get it.”

As President Bush once said in his speech to the nation, that people and fish can coexist peacefully in order to put food on our families, “Fool me once, shame on, shame on you. Fool me, you can’t get fooled again!”

Moe Bedard
My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, LoanSafe.org. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications.