trendSpotting Report
Sharon Nieuwenhuis

Lately, I start my days annoyed as I read the latest articles about Countrywide, Citigroup and the latest subprime fallout. What is happening here is a little thing called karma. The media is really shocked about this? Come on. Have they not been reading their own headlines dating back to 1997 about predatory lending, consumers spending like drunken sailors and liquidity crises?

This mess was wholly preventable had America adhered to a few money management 101 lessons. 1) Do not buy what you cannot afford; 2) Do not give money to people who cannot pay you it back and 3) Trying to make a quick buck never works.

Now I am not condemning the subprime market; I was a part of it for a long time (I handled communications for a subprime lender) and I have no regrets. Like every industry that has been tarnished there are some good guys doing things the right way. Funny thing, those guys are not getting any attention right now. More comical is that the fallout is getting a ton of press, as if the media did not believe their own stories all along.

So whose fault is this situation…and who really should be getting the media coverage?

Consumers did not really know or consider what they were getting into and they plum did not care. They wanted a Mercedes and an overpriced McMansion with a driveway in which to park it, all with an annual income of $40 grand.

Lenders knew better than to grant the loans, but they provided education programs for potential borrowers and the loan documentation spelled out all the gory details. (Please raise your hand if you have ever attempted to read one of those. I thought so.) All those educational materials are still out there, and are as relevant as ever they were.

Government involvement was tangled by debates of national versus local legislation, with North Carolina and Texas being among the most prohibitive countrywide (pun intended). At the end of the day, which as you know was not too long ago, the government ended up regulating predatory practices little — and prohibiting them less.

So the fault is shared by all the above — none of this is news. So how about some headlines discussing inventive solutions to the situation? Oh wait, no, we have to write another article about plans from the candidates for federal bailouts first.

You know that will help.

Estimable RLM Account Manager Sharon Nieuwenhuis toiled as a Comm Person in the subprime mortgage industry for eight years. She had files the size of a small SUV predicting where we are today.