After nearly thirty years of working in and reporting on the evolution of real estate, I can barely stand to turn on the television or read a newspaper these days for fear of being confronted by yet another sky is falling real estate story, but its part of my job.

Most of the mainstream media is content to report only the most negative of real estate news without providing balance or well-reasoned insight. Perhaps they don't know how.

Then, we've got the head of the nation's largest home builder standing in front of a conference and saying, "2007 is really going to suck."

But, what is most disturbing is how some industry leaders are reacting to the crisis du jour: subprime mortgage delinquencies.

Recently, at a conference of mortgage executives, the executive vice-president of a major seller of subprime loans admitted that his company knew better than to make these loans, but they couldn't stop themselves.

Then in a moment of Zen he said, "We need to spend some time being introspective."

Well, light the incense and let's get to meditating. And while we seek a state of deeper consciousness, why don't we also ask the Wiz for a little backbone.

Frankly, I think both of these clucking Chicken Littles need a good smack-down.

Am I the only one with the insight or the courage to argue in the face of conventional wisdom that the health of the nation's real estate and real estate owners has never been better? More Americans own homes than at any time in history and so called "risky and exotic" mortgages made it possible for many who never could have saved enough to qualify under more conventional programs.

Since when is it wrong to try and fail? The higher profit on subprime loans was a fair market transaction. It reflected the borrower's higher risk, but allowed money to be available for him to try. The likelihood of saving a large down payment while also paying market rent is extremely remote in most markets. Over time, selling prices do go up making it less likely that time is an ally of the patient and frugal.

If one hundred percent financing is such a bad idea, how come it was once reserved only for veterans?

So to all my fellow professional industry members I bring solace and peace of mind on your inner journey.

Try repeating these mantras daily and you will achieve a state of greater awareness.

There are no bad loans, just bad planning.

Behind most mortgage defaults is a predictable but unplanned-for personal event. At a time when half of all marriages end in divorce, marriage is a greater contributor to mortgage delinquency than the type of loan.

Leverage, the ability to use the money of others to build one's own estate, is a key financial concept, not a curse. If we make money more difficult to get, we also deny the vast majority of subprime borrowers, who remain current, the opportunity to get started.

Subprime loans are not evil.

Subprime loans are miraculous vehicles of joy and wonder that give even the lowliest fly-speck among us a chance to get a toe-hold on some of the planet's shrinking real estate.

I'm old school and I started out dirt poor. I'm for giving every man a chance because most will make it. I don't really want a government bureaucrat or a stuffed white shirt to decide who can and who cannot borrow money secured by real estate.

Subprime loans are a minuscule part of a vast universe.

A total of 15 percent of mortgages are subprime and most of these, 80 percent, are current. So we are fretting needlessly over only three percent of all mortgages.

Typically only about 5 percent of defaults go to foreclosure sale. But because these are the most at-risk borrowers, let's say a third or one percent are ultimately foreclosed.

And remember, half of American homes have no mortgage, so this represents an increase in inventory of .5 percent. Typically seven out of a hundred homeowners sell each year. Just like builders standing inventory, this additional inventory will be absorbed.

Acknowledge the greater truth.

Subprime loans are far less of a problem than subprime servicing, which is accelerating foreclosures by deliberately targeting, profiling and then squeezing every last penny out of subprime borrowers.

Be the solution.

A wise man once said, "The solution to every problem already exists. All we need do is find it."

One man's problem is another man's opportunity. If the leaders of the loan industry are really and truly sorry, then I would expect them to step forward with programs to assist the people they say they have harmed. Along with the mea culpas, it would be healthy to come forth with proposals for how we better serve those in default and at risk.

See the bigger picture.

Lenders seem to be practically begging for more regulation. That is the last thing any of us should want. But if we keep whining that we cannot control ourselves rather than pointing out that we responded to a market need, we'll get exactly that and more.

Already the federal government is developing a plan for national regulation of real estate and a substantial transfer tax as a means of dealing with the deficit. Let's hope we aren't giving them just the excuse that they've been trying to manufacture with their bogus anti-trust actions.

Keep the faith.

Real estate is the only real thing. During my long career, I've helped a lot of people acquire real estate. Most stretched to do it. Those who failed were either brought down by a job loss or a divorce. Of those who lost homes, most bought another. That's life.

I think there are three things worth going into debt for: to get a better education, to start a business, or to buy real estate. Some of those better educated people will fail to get better jobs. Some, maybe most of the businesses will fail. And a handful of real estate owners who are forced to sell due to personal reasons will lose.

None of it's fatal. Success isn't permanent and neither is failure. Risk is everywhere. Let us hope that those without faith do not discourage others from taking any risks.

It's time for the Hennie-Pennies to stop spewing their chicken-spit and go to the back of the coop. We need those with faith in American real estate and its long term wealth building potential to take the podium.

Published: April 17, 2007

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George W. Mantor is known as "The Real Estate Professor" for his wealth building formula, Lx2+(U²)xTFP=$∞. A proponent of educating consumers on using homeownership as an opportunity to build an estate, he has set out on a crusade to educate small real estate investors, fellow practitioners, seniors, and high school and college students about the risk-free benefits of planned real estate ownership. His consumer education efforts include a long-running radio program, Mobile Information Center, monthly workshop series, public appearances, informative website and frequent articles. During a career that has spanned nearly three decades, he has amassed experience in new home and resale residential real estate, resort marketing and commercial and investment property. He is currently the founder and president of The Associates Financial Group, an independent, locally-owned, full service real estate and mortgage brokerage, dedicated to creating long-term relationships with clients. Prior to starting his own firm in 1992, he had been Director of Training and Customer Service for Great Western Real Estate. In addition he has served on virtually every real estate committee, including a term as a Director of the California Association of REALTORS®. He is the creator of the Personal Best System, a business and life planning process and the Red Zone Time Planning System for Business Professionals. In addition to Realty Times, his articles have recently appeared in Real Estate Finance, National Real Estate Investor, The Real Estate Professional, Broker Agent News, and RIS Media Power Broker Network Report. He is available for speaking and customized training. His website is www.myafg.com and he can be reached at GWMantor@aol.com.