These days, it seems like the “great recession” is but a distant memory. The stock market is soaring, the economy is growing, and employment is on the rise. Similarly, in the world of real estate, Americans are buying houses again - from new construction, to renovations - homeownership continues to increase, along with the price of the homes with it. Consumers are clearly more savvy and price-sensitive than they once were, but the overall attitude of homeownership has very much changed - along with the philosophy of the overall economy.
In my humble opinion, part of the driving force of this changing fiscal attitude is the concept of “consumerism.” It can be referenced in many different ways, but the notion is certainly not new or radical, and has been a growing part of our ethos for decades. According to Wikipedia, Consumerism is a social and economic order and ideology that encourages the acquisition of goods and services in ever-increasing amounts. The concept clearly holds true for tangible household items, but extends well into the world of home buying as well.
Part of the shocking default-rate during the housing crisis was that banks (and their investors) didn’t take into consideration that someone living in their home would proactively choose to default on their loan, before they painstakingly labored to consider alternative payment options. Historically, people who lived in a house always paid their mortgage first - while other expenses and obligations were secondary. That mindset changed, and banks were astonished to learn that a person would sooner pay their car lease or PC Richard’s loan before they paid their home mortgage. Simply put, consumers would rather hang on to their flat panel TV, than the home that bore the wall on which to hang it. People are more mobile and feel more portable than ever before, and no longer fear change or transformation as our ancestors once did.
Things have become “disposable” and trivial. According to Investopedia, the concept of “planned obsolescence” is “a purposefully implemented strategy that ensures the current version of a given product will become out-of-date or useless within a short and predetermined time period.” Rapidly changing smart phones devices and plans, shorter than normal auto lease renewals, short-term home rentals, and the like, are all part of the disposable mentality that is changing the dynamic of our society.
I was recently introduced to the concept of “the disposable employee.” Apparently, it is a common and customary process whereby companies treat employees as instantly replaceable cogs. It seems that treating workers as if they are widgets to be used-up and discarded is a normal part of the revised relationship between employers and employees that exists in corporate America. It’s a scary and sad phenomenon that I am very unused to, and very uncomfortable with. Organizations are creating a la carte labor forces that can be turned on and off like a faucet, at a whim. The moment demand drops, the workforce is adjusted to the new “norm” and personnel is changed accordingly.
As we continue to grow and expand Approved Funding, part of the mindset and approach that we are taking is that we are looking for like-minded individuals that want to be part of a bigger, better, and lengthier experience than what is currently being promoted in the marketplace. This approach not only reaps rewards for our potential employees, but we feel that has a more significant impact towards the customers that we serve. Having long-term employees that understand our mindset and culture, helps our mortgage clients get their loans approved faster and more efficiently, than what is offered at the cookie-cutter alternatives out there. It’s a win-win for everyone who sticks around long enough to realize.
A special shout out to Rabbi Dr. John and Phyllis Krug.
By Shmuel Shayowitz
Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Approved Funding is a mortgage company offering competitive interest rates as well specialty niche programs on all types of Residential and Commercial properties. Shmuel has over 20 years of industry experience including licenses and certifications as certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. He can be reached via email at [email protected].