Framing the Problem

Who or what caused the mortgage melt-down?  

While a lot of attention is being focused on multi-billion dollar Wall Street firms that gambled and lost on risky debt, we believe a huge underlying cause that has yet to receive as much rightful blame for this catastrophe is the real estate industry. We believe conflicts of interest and self dealing have eroded the foundations of the residential real estate industry to the lasting detriment of consumers, many of whom now find themselves dispossessed of their most important investment, their homes.

Something bad has happened to the way American real estate gets transacted. The huge amount of damage to our economy is in direct proportion to the complexity and severity of the problems that still exist in the residential real estate industry. To cause such extensive damage the problem goes far deeper than just the mortgage industry.  If anything, that industry is just the "fall guy" for a far larger problem.  The problem encompasses the whole residential industry.  Most of the responsible parties have yet to be investigated for their part.

In this section we describe the problems that exist in the residential real estate market and offer solutions that involve re-introducing free market forces and removing anti-competitive and unfair business practices.

More About Problems in Residential Real Estate (click here)

Specific Problems That Result in Bad Transactions

1.     Bad Laws.   Lobbying leads to bad consumer laws.

2.     Realtors.   The Realtors' immense power in the media and government has led to some of the most anti-consumer, anti-small business and anti-competitive business models in the United States.

       a.     Dual Agency.   Legalized betrayal that is imposed upon consumers in a bait and switch.

       b.     Bribery.   Realtors may be the only profession where bribing fiduciaries has become an everyday business.

       c.     Realtor Open Houses and Online House Searches.    Consumers lose their right to representation and ensure that Realtors collect a double commission just by utilizing these severely misleading marketing gimmicks that are designed to trap consumers.

3.     Attorneys.   There are few residential real estate attorneys who can provide unconflicted service to their clients.  Most of these attorneys routinely represent real estate brokers, receive referrals from brokers or sell their clients title insurance.

4.     "One Stop Shopping" or Controlled Business Arrangements (aka Affiliated Business Arrangements).   The service industries designed to provide safeguards to ensure healthy residential real estate transactions are now actually owned and run by the firms which have huge stakes in the transaction such as builders, Realtors, and lenders.

5.     Bad Data. (coming soon)   Here we expose bad data, studies and reports that are often used by lobbyists to promote irrational conclusions.