Over the weekend, the United States government tried to correct one mistake with another: Under intense pressure from foreign governments – especially the Chinese government who are the single largest investor in Fannie Mae and Freddie Mac – Uncle Sam took out its checkbook. With a flourish of the pen, the Treasury nationalized these failing financial behemoths. In the process, it wiped out any remaining common shareholder value, eliminated stockholder control over the company’s operations and fired (but will still pay millions in golden parachutes) one of the most inept management teams in the history of any undertaking. In yet another stunning example of crisis management, lack of planning, and most of all – lack of leadership control of an organization – a pillar of both the real estate industry and the global economy itself crumbled. If the situation sounds a little too familiar to you, perhaps you’re wondering: Where’s my government bailout?

After recently taking REALTORS to task for advocating more “government backed mortgages” and looser credit limits as the way out for the real estate industry crisis, I thought perhaps I was too harsh on the industry. It’s possible that most REALTORS don’t realize that every time they argue for the government to subsidize un-credit-worthy taxpayers that they are really arguing that the government steal money from the existing homeowners – through taxation to bail out Fannie and Freddie everu so often. Maybe most REALTORS were just too shortsighted to understand that every increase in taxation hurts their future source of business – the future seller who becomes the future buyer. And since most REALTORS only last about 18 months in this business anyway, maybe most REALTORS really don’t care about this stuff, since they are only focused on where they can get a commission in the next 45 days. Then, something frightening was quoted in the Wall Street Journal on Friday, May 9th, page A3 and I realized that the REALTORS have made the ultimate deal with the devil. In an article by Ruth Simon and Nick Timiraos entitled “Mortgage Firms Cool to Principal-Cut Plan,” no REALTORS are mentioned. There [...]