Recession and How It Affected Me

For many years I was envied by sooo many friends…  I owned a mortgage company (now you feel bad for me, don’t you?), I had 15 people working for me, I bought a boat, and 3 investment properties, I pretty much spent money left and right and didn’t have any financial worries.

Well, as the song says “’cause nothing lasts forever/ and we both know hearts can change/and it’s hard to hold a candle/in the cold November rain”, that’s exactly what happened to me.  I don’t think Guns N’Roses was talking about the mortgage industry fiasco, but their song rang very true to me and to all the other people who built (and in the end destroyed) this colossal business, that used to be known as the mortgage business. And indeed, since then there’s been a lot of heart change, and rain.  Cold, cold rain.  Mortgage industry collapse kind of cold rain, people losing their homes, and jobs, and hopes kind of cold rain.

In the beginning, it felt like a mistake, like some kind of weird joke.  Then, month by month, bank bankruptcy after bank bankruptcy, the reality settled in.  I was in the business of disappearing dinosaurs.  I saw it coming, closer and closer, clearer and clearer, but there was nothing I could do to save it.  Well… how can you save a dying, disappearing dinosaur?

Two years later, I sometimes think that maybe it was for the better.  Things were getting out of control, everybody was getting too greedy, and, as a matter of fact, everybody is to blame: customers, banks, mortgage brokers, appraisers…  We did this to ourselves.

I used to close about 35 loans a month.  That’s more than I closed in the past 2 years together.  I was lucky enough to sell 2 of the investment properties, while one is lost to foreclosure.  When you have to make decisions between what’s the most important bill you have to pay with limited income, I guess the mortgage on an investment property is one of the first ones to suffer.  When economy gets tough I guess you learn how to take boats back to the dealership, and how to cut on barbeques for your employees (that one was an easy one, since right now I have no employees left, and I moved the office to my house, to avoid additional bills.  I am lucky that I started a company without relying on anybody’s help.  I knew all aspects of the mortgage industry from A-Z.  I was a processor, and a telemarketer, and a seller, and a closer, so in tough times like this, I can manage with no employees.  And I guess that should be a lesson to everyone:  don’t start a business (no matter how appealing and profitable it looks), if you don’t know how to handle ALL aspects of that business.  A lot of people who had much more successful companies than mine were forced to close down because they couldn’t afford employees, and didn’t know how to take care of all the aspects of mortgage business.  Yes, right now things are not that great, but I still have a company!)