In the summer of 2006 I recall reading an article that had a chart titled, First Payment Default trend. Somehow this caught my eye. The gist of the article was that for years this metric had little variability. It measured the percentage of new mortgage in which the first payment was not made by the borrower. It confirmed a fact that homeowners would pay their mortgage before anything else. Having a roof over your head was a top priority. There was a shift in the data beginning in 2006. A rather sharp increase in the number of mortgage with no first payment. Why? What was this behavior signaling in the housing market and the overall economy? It turns out it was a major indicator that priorities had shifted for American homeowners. I speculated at the time that people were paying their credit cards – instead of their mortgages- because it took a while for your home to be foreclosed on and you could use the credit cards to buy essentials like food, gas, clothing and pay utlities. For the first time in recent history this shift occurred and no one really noticed. By the fall of 2006 the first subprime mortgage company went bankrupt and like dominoes in a line almost all the rest were bankrupt by year end. But wait this was well before the official start of the recession. The data was there revealing an underlying behavior. People were buying houses they couldn’t afford with mortgages that were riskier than anyone realized. And it was all happening at a frightening pace. By early 2007 I was barely doing any loans and sought other employment. I went to work for a geotechnical, engineering company to make ends meet. All the while hoping this was a temporary slump in the mortgage industry. As 2007 rolled along it became increasingly apparent that there had been a seismic shift in the industry and things were going to be fundamentally different. We still hadn’t seen the utter collapse that would take place in 2008. What’s the lesson? Monitor trends of data and consumer behavior. They are telling you a story. Prepare and don’t downplay fundamental shifts. At the same time don’t overreact. Easy for me to say right. But that balance of “reading the tea leaves” versus keeping your head down and just doing your job is important. Read and be informed. Develop relationships with mentors and friends whose advice you can trust and be prepared to act. Agency – interesting word – can be defined as action or intervention to obtain a particular result. This willingness to see the signs or trends and having the faith in your ability to make decisions is crucial. You don’t have to be 100% right. You’ll be lucky to be north of about 70%. But being aware and taking action in the face of uncertainty gives you a certain confidence. This battlefield is in you mind. You must take control of your thought life in times of change or crisis. Seek to be motivated by love and your desire to serve your family and others rather than fear and self-preservation. Your perspective matters in these moments.
In navigating uncertainty, it’s vital to embrace a mindset grounded in resilience and purpose. The lessons learned from the housing market’s collapse highlight the importance of proactive engagement with data and trends. By fostering relationships with mentors and staying informed, individuals can better prepare for inevitable shifts. Ultimately, your perspective shapes your response. Embrace agency, act with intention, and let your commitment to service guide you through turbulent times.
