By Melissa Dittmann Tracey
QUICK SKIM
Slowing home sales, a tightening credit market, record-high foreclosures — how did we get to this point? Richard Bitner’s book Confessions of a Subprime Lender (Wiley, 2008) gives a close-up look at how the worst credit crisis in modern history came to be. Bitner, who founded a subprime mortgage company in 2000, left the business in 2006 after foreclosing on a subprime borrower that never should have been approved for a loan in the first place. While being careful not to blame any single source, Bitner gives an interesting view on what went wrong in the subprime mortgage market and how to fix it.
FROM THE BOOK: 5 REASONS THE SUBPRIME MARKET CRUMBLED
In 2000, as housing prices grew out of reach for buyers, more creative financing crept in and subprime lending became big business. Wall Street wanted its hands on more of these loans, and the hot housing market spawned a wave of new subprime companies. By 2004, 75 percent of borrowers were buying a home without using a down payment or proving income.
But by 2006 the subprime market started falling apart; Borrowers were defaulting on loans and subprime companies were going out of business. Bitner says these are some factors that caused the subprime market to crumble:
1. Greed. Mortgage brokers made more money if they sold loans with higher fees and interest rates. So borrowers would often be steered toward riskier products, even if a more traditional (and less risky) loan were available. “My income was directly proportional to the revenue I generated, and subprime was three to five times more profitable than any other type of loan we securitized,” Bitner says. “I saw no logical reason to sell something that made less money and carried no competitive advantage.”
By Melissa Dittmann Tracey
Here are the latest top selling books in sales and marketing from Amazon.com:
1. Yes!: 50 Scientifically Proven Ways to Be Persuasive, By Noah J. Goldstein, Steve J. Martin, and Robert B. Cialdini
2. The Tipping Point: How Little Things Can Make a Big Difference, By Malcolm Gladwell
3. Influence: The Psychology of Persuasion, By Robert B. Cialdini
4. Predictably Irrational: The Hidden Forces That Shape Our Decisions, By Dan Ariely
5. Nudge: Improving Decisions About Health, Wealth, and Happiness, By Richard H. Thaler and Cass R. Sunstein
6. Sway: The Irresistible Pull of Irrational Behavior, By Ori Brafman and Rom Brafman
7. The New Rules of Marketing and PR: How to Use News Releases, Blogs, Podcasting, Viral Marketing and Online Media to Reach Buyers Directly, By David Meerman Scott
8. The Mary Kay Way: Timeless Principles from America’s Greatest Woman Entrepreneur, By Mary Kay Ash
9. Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant, By W. Chan Kim and Renée Mauborgne
10. Principles of Marketing, 12th Edition, By Philip Kotler and Gary Armstrong
The National Association of Real Estate Editors is accepting entries for its first Robert Bruss Real Estate Book Awards. Authors of books published in 2007 and 2006 on such real estate topics as home buying, selling, renting, mortgage finance, green building, urban design, architecture, government housing policy, and construction are eligible to apply. Get more information on how to apply at www.NAREE.org. Four winners will be announced, including for a first-time author award. Winners will receive cash prizes from $1,000-$250. Deadline: Sept. 2.
By Melissa Dittmann Tracey
Heather Oberhau
Favorite Pick: Sell with Soul: Creating an Extraordinary Career in Real Estate Without Losing Your Friends, Your Principles or Your Self-Respect, by Jennifer Allan
“Jennifer is such a nice change from the regular ‘numbers game’ authors. Her message is simple: be good at what you do and spend time and keep in contact with your SOI. No need for begging for referrals, they’ll come naturally.”
—Heather Oberhau, e-PRO, Prudential Fox & Roach REALTORS®, www.SoldbyHeather.Blogspot.com
Favorite pick: I’ve Heard it All and so Should You: Confessions of a Real Estate Columnist, by Edith Lank
“There are not many real estate books that tickle the funny bone as much … while consistently revealing human nature at its best (and worst), as well as a confirming the general lack of knowledge about most things related to residential real estate as does I’ve Heard It All And So Should You: Confessions of a Real Estate Columnist by Edith Lank.”
—Jim Zirbes, a Phoenix real estate associate broker, writes on his blog, The Realty Blogger – Jim’s R.E. Journal.
Ann Grant
Favorite pick: The Millionaire Real Estate Agent, by Gary Keller
“This book gives you step by step tips to help enhance your career. If you are new to the business or have been in the business many years, this book can help you maintain your focus and become goal driven.”
—Ann Grant, SRES, Keller Williams Realty, White Plains, N.Y.,
www.AnnGrantRealty.com
TELL US WHAT YOU’RE READING. Send an e-mail to bookblog@realtors.org that includes the title of the real estate book and its author, along with your name, contact information, and what you like or dislike about the book.
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