Change is constant. There isn’t much any of us can do to manipulate that truth. We try. We all try. It’s a fact of life in life; it’s a fact of life in business. In fact, change is something we can count on. It is the one constant that never changes. Change is ironic. There is an anonymous quote out there which has been used in many ways, sums up the message clearly. It goes something like this, “…how you handle _________ , is probably how you handle everything…”. How we face what we do in our lives daily, is how we efficiently, or inefficiently, deal with change.
Upon reflection, I recall a period of my own life where I chose not to deal with change. You know what that feels like. We all know what that feels like. We get into a place where we are complacent and any change to our routine or rituals or work environment is comfortable, and any outside influence irritates us. There were external influences that were happening then, that were affecting my life; yet, I refused to look at what those influences were that were changes because I refused to let them into my life. I refused change. Comparatively I didn’t have a choice. I didn’t have the choice to disallow change because I wasn’t mature enough to understand the power of change. And then, before I knew it, change happened anyway. Whether I liked it or not, I had two choices, two options, either embrace, accept and allow change, or not. I chose the path of least resistance.
The very instance that I made that decision, everything fell into place for me. Everything worked out for me. Everything was okay. I discovered that change was a good thing. I really didn’t have to figure things out because everything came to me as they should in the time that they were supposed to. I was at one and at peace. I discovered through acceptance of change that change was a good thing and that my non-acceptance of change was my problem. Not change itself.
A decade ago, our country was faced with a global change that rocked everyone’s world. Not one single person, animal and living creature got out of the influence of the worst global financial disaster that made the tsunami in 2004 in India, look like a small tropical rainstorm, comparatively. Dwayne Meadows who was a survivor of this deadliest, recent tsunami said, “…It still affects me most days…”. On December 26, 2004, the Indian Ocean was hit with what is known as the deadliest tsunami in recorded history. Over 280,000 people died and the estimated damages were in excess of $14 billion dollars. Over a decade and a half later, recovery is still in motion. Over a decade and a half later, children now grown, who lost family members, still suffer from PTSR (Post Traumatic Stress Reactivity) according to the Study of the Tsunami Aftermath and Recovery (STAR). In 2005, STAR began following over 30,000 people in 487 communities as part of a population-representative household survey conducted by Statistics Indonesia. The results are astonishing because the strength of the recovery came from the people, not the government. Natural disasters work that way. I witnessed humanitarianism at its best when I worked with FEMA during the Northridge California Earthquake in 1994. The quake was caused by the sudden rupture of a previously undocumented blind thrust fault. To put things in perspective, the epicenter in Northridge was the costliest earthquake in U.S. history, with estimated damages that exceeded $20 billion, yet the death toll resulted in 57 documented cases.
According to Maryann Mott, a writer for National Geographic News, her compelling article stated:
“Before giant waves slammed into Sri Lanka and India coastlines ten days ago, wild and domestic animals seemed to know what was about to happen and fled to safety. According to eyewitness accounts, the following events happened:
• Elephants screamed and ran for higher ground.
• Dogs refused to go outdoors.
• Flamingos abandoned their low-lying breeding areas.
• Zoo animals rushed into their shelters and could not be enticed to come back out.
The belief that wild and domestic animals possess a sixth sense—and know in advance when the earth is going to shake—has been around for centuries.” According to the article, “…Wildlife experts believe animals' more acute hearing and other senses might enable them to hear or feel the Earth's vibration, tipping them off to approaching disaster long before humans realize what's going on...” and, “…Relatively few animals have been reported dead, however, reviving speculation that animals somehow sense impending disaster...”.
Ravi Corea, President of the Sri Lanka Wildlife Conservation Society, based in Nutley, New Jersey, was in Sri Lanka when the massive waves struck. He describes his shock, when he traveled to Patanangala beach, which is located inside Yala National Park, of the sixty visitors that were washed away into the ocean. Ravi Corea stated in an interview that, “…about an hour before the tsunami hit, people at Yala National Park observed three elephants running away from the Patanangala beach [headed for higher ground].”
The fact is that the animals instinctively knew that something was about to happen, and they trusted their instincts to survive. Within 15 minutes after the earthquake off the coast of Sumatra and the Nicobar Islands hit on that hot day of December 26, 2004, 98-foot walls of salt water waves crashed in Aceh, on the beaches in Sri Lanka and in Thailand. Thousands upon thousands of people drowned or were carried out to sea and were never seen again. The human instinct of approaching peril was suppressed and with that suppression came their demise.
Alan Rabinowitz an American zoologist, and the CEO of Panthera, which is a nonprofit conservation organization who was the past Director for Science and Exploration at the Bronx Zoo-based Wildlife Conservation Society in New York, when interviewed, said, “…animals can sense impending danger by detecting subtle or abrupt shifts in the environment. At one time humans also had this sixth sense but lost the ability when it was no longer needed or used…”.
In 2007, our country was in the middle of refinancing loans in the sub-prime era because the rumor around the industry then was the housing market slowdown. It started in 2006 when the United States Commerce Department warned that the October 2006 new home permits were nearly 30 percent lower than 2005. I remember working with SBA (Small Business Administration) back then and the Director of this local rural SBA was a State Legislator. We had a close business relationship. When I started noticing fluctuations in the market in our area I asked him how he felt about the changes. I recall his response that he didn’t think that the housing slowdown was going to affect the rest of the national economy, moreover the rural economy as a whole. He felt that the market was normal. Yet, in my neck of the woods, in rural USA, home prices started falling. I was a property manager and a realtor at the time and just like anyone in the industry, I helped my clients refinance their rental properties that were purchased with hard money loans. We had to hurry up and get appraisals showing there was equity in the rentals. The mortgage brokers were aggressive in their sales with investors and homeowners who fell into the trap of the sub-prime lending debacle. Everyone who owned homes or real estate or invested into real estate for buy and holds were buying in on the sub-prime rates where no proof of income was necessary, little paper, quick closes, lock in your rates and hurry up and get it done. On one of my many meetings with the Director/Legislator of the SBA, prior to the stock market crash on September 29, 2008, he said to me on occasion that I should consider getting into the Servicing Agency business. Hind-sight being 20/20, I never fully grasped that hint until well into the crash.
To refresh your memory, the stock market crash was a direct result from the US Congress rejecting the bank bailout bill that had been set before them. When the crash happened, everyone in the world was in utter shock. Within one year after the market crashed, my real estate business was on the verge of bankruptcy until one morning at 7 a.m. I got the call from a Bank of America representative. The call went something like this, I got your name from the yellow pages, and I see that you are a property manager. We are seeking someone like you who can manage our bank owned properties, it’s kind of like managing properties, which is what you do, but, you don’t have to deal with the tenants. Within four hours, I was faxed an application with a contract, and within two weeks I was now in the asset management business on the front-lines of the foreclosure tsunami.
When I first started working for the “banks”, I did the majority of the work alone. There was a list of priorities that had to be done and I felt, if I was going to do this full time, I had better get to know the business from the ground up before I hired anyone to train. The rules were stringent and rigid. If I didn’t comply, I didn’t get paid. Before I knew it, within two weeks of signing the application, I was receiving more than ten orders a week that covered a 300-mile radius in rural America. What I was about to embark upon in this new real estate journey, was a journey that burned into my memory like the exposure of pornography is to a child.
The first few jobs entailed crawling under houses and making sure copper water piping was intact and taking photographs of the piping, to prove that the piping was there. This included any copper piping inside and documenting damages, such as roof damage, roof repair, broken windows, holes in walls, personal property left behind, the checklist was pages long. With each house came the same work. With each house there was a new problem. With each house was a memory. With each house came speed and efficiency, with each house it felt like it would never end.
I wasn’t new to real estate, but I was new to loss. I was new to witnessing loss. I was new to witnessing devastation in nice well-groomed communities which by now looked like war zones. Some of the communities appeared as though an atom bomb hit. For example, there might be four single family houses on a city block, all vacant where two of the four houses had fires and one of them had an explosion through a roof and I had to document three of the four houses. As I remember standing in the cul-de-sac shooting photos and I circled the area, it felt ominous, like the force of the after effects of the fallout of the ash after an atom bomb hit. Cars were sitting in the driveways with the hoods up, broken windshields, doors open, blankets in the backseats, some cars propped up on cement blocks; some of the houses had boarded up windows and doors with graffiti infested loitering, trash on the outside perimeter and occasionally in the photos a person peeking through a shade.
As the months passed, prior to my business expansion, as I was learning this work, I went on many of these jobs alone. I had a puppy when I started who turned into an asset. Welsen was a very large border collie. I trained him in this business because sometimes when I went into these houses, there were people inside, even animals. And Welsen was really good about going through a house faster than I could to clear it for me moving forward, he was calm, quiet and instinctively new what to do. He was a truly amazing dog. Hundreds upon hundreds of photographs that I have to show Welsen is in them doing his job.
Upon entering into some of these houses there were ageless memories of loss. Expletive words written in human feces, on walls, next to framed family photographs of forgotten childhoods, happy marriages, now filled with, in some cases, left over syringes on the floors next to mattresses with one last final attempt, by a once perfectly happy human being, who tried to stay, who tried to keep their home. It was obvious they had nothing left; wanting some peace that whatever was in that syringe could give them before the cash for keys program negotiated a price to get them out to give them a new start to their new freedom; to leave to a place they had never been before. Change happened that was a direct result of outside influences with the force of a tornado that crushed them from the inside out, to only end up in a homeless shelter, and eventually on the streets because by then, there were no jobs, no one was hiring and those of us who did survive was because we knew where our bread was buttered. We rescued the houses for the banks, but it wasn’t the houses that needed rescued, and nobody saw that change until it was too late.
Each house had its own energy, like phantoms pulling me in directions to show me what happened. I could almost hear the voices screaming, children crying, flashlights and blankets with stuffed animals in closets. Favorite backpacks left in bedrooms with unopened valentine’s day cards to classmates asking them to be their valentine because that’s all they had left; and now even the faintest memory of that was gone.
Eventually I became numb to witnessing. Job orders were coming in by the dozens per day. I hired crews to work sectors of a three-state area to do the work that I once did alone. New hires were always the hardest. I’d get calls while they were on the job by the supervisors telling me they were vomiting and became physically ill with what they witnessed. I’d spend time on the phone with the new-hires talking to them, consoling them and working through their emotions as they worked through the homes that were filled with despair. I was qualified. I went through it myself in the early days. Not only did I manage the business, I managed the crews, I became their therapist.
Finding animals in abandoned homes were always the hardest. There were times where I would walk into a home on acreage and find horses in fields, dying of thirst and hunger. Pets were left in homes with empty bowls of food and water and cat carcasses would be found in rooms withered on pillows waiting for their owners to come home and rescue them when the owners couldn’t because they were too busy rescuing themselves, to change. After about three and a half years of working in this field, eventually there were animal rescues that evolved from animal control who stepped in to save these forsaken animals left behind because before, if we could get anyone to listen to us as field reps, we knew that animal control would euthanize unless a worker would adopt. That happened sometimes.
Years went by. House after house after house realized a collection of door knobs. The banks required us to change those with each job we did. My doorknob collection over five years became so vast that my 20 x 40-foot garage was filled with over thirty cubic yards of 50-gallon, heavy duty bags filled with doorknobs from each home we walked into. Each one of these doorknobs represented to me a family that was separated and destroyed. Each one of these doorknobs represented the touch of each person in that family that opened the door to safety, to home, to the smell of dinner, to mom and dad, to warmth, to comfort.
I never got used to it. And I survived the business of the clean-up of the aftermath of the tsunami. I’m one of the lucky ones. But, there are millions of people who did not survive. There are millions of children who were harmed by the tsunami of foreclosures. There are millions of people today who are still trying to pick up the pieces of their lost lives attempting to get out of the quagmire of PTSR (Post Traumatic Stress Reactivity) because of what our very own government allowed; then left its citizens hanging by a thread, that forced many to live in shelters while bills were being passed in Congress to eliminate the funding. The media spun rumors of how our economy was growing when no jobs were available. Many people couldn’t even afford their car payments any longer. In some cases, families gathered in the homes of their retired parents who only had two bedrooms while the parents worked at mediocre jobs to maintain some semblance of income. In many cases, many families just dispersed where ever they could.
Change that was a result of a tsunami of greed and financial harm that wreaked corruption within our very government who knew about the outside external forces, raped nearly 900,000 families in 2008 according to Realtytrac. The household median size was averaging 5.3 family members which amounted to two adults and three kids, according to the US Census. By the end of 2012 there were 8.3 million children affected by the housing crisis according to Alex Gold of the Brookings Institution for research assistance. This is not counting the adult population.
In hindsight, moving into the future, we have to remember where we’ve been. In 2005, there were 855,000 foreclosures. In 2006, there were 1.2 million foreclosures according to Housingwire. In 2007, Realtytrac documented 2.2 million foreclosures. In 2008, Realtytrac documented 3.1 million foreclosures. In 2009, there were 3 million foreclosures. In 2010, Realtytrac documented 3.8 million foreclosures. In 2011, there were in excess of 3 million homes foreclosed and lost which exceeded 2010. In 2012 there was an abundance of shadow inventory and the foreclosures became skewed because of the first major auction of owner occupied assets that Credit Suisse/Bank of America auctioned nearly 2500 pieces of real estate in the hardest hit areas of the United States which were California, Nevada, Arizona, Florida and Michigan. In the end, there were a documented 1.850 million foreclosures. In 2013, there were 1.37 million foreclosures. In 2014 there were 1.12 million foreclosures. In 2015, there were 1.2 million foreclosures. According to ATTOM Data Solutions, curator of the nation’s largest fused property database, in 2016, there were 933,045 foreclosures. In 2017, according to INMAN, there were 649,000 foreclosures.
Currently, in the United States, according to the 2017 AHAR (Annual Homeless Assessment Report to Congress) there were 553,742 homeless people. 67% of these people were adults, no children and 260,979 were white of which 55% of the total number were women. Today, I’m discovering that at least 1% or 5537 of the homeless women and men over 50 in the nation are or were Executives, still trying to recover their lives directly related to the market crash. That is astonishing.For those of you who are wondering what caused the market crash in 2008, it started in 1979 when President Jimmy Carter deregulated banks. That change allowed banks to participate in Hedge Fund trading with financial contracts that derived its value from an underlying asset. The underlying assets were mortgage based real estate. The trading got bigger and bigger until it blew up because there were no more underlying assets to trade. That was the beginning of the market crash. Cause and effect. It took, 35 years for the market to implode like an earthquake. The rock, which was our economics and financial system broke. The energy from that break radiated out in every direction and expanded into every single country on the planet. At that moment of the crash, the size of the amplitude of the devastation at that very moment was the biggest financial devastation this country and world has ever seen. In other words, the tectonic plates on the fault-line was so long, that the radiation of the amplitude of the devastation was immeasurable.
Most people, in fact the majority of the world, did not see that financial holocaust approaching. Moreover, we did not even see the signs of what was about to happen three years earlier. Our intuition was turned off and we were blind sighted with what felt was a sudden jolt, when in reality the tectonic plates were breaking before the crash. We were taught through outside influence to believe what our government was doing was in our highest and best good. We all became complacent and we didn’t have the intuition to see the wall of salt water approaching us. None of us, like the elephants who felt the change, ran for higher ground to safety. It was too late, and our lives were changed forever. We didn’t have an option to embrace change. It was thrown at us and we were expected to adapt and modify without help. When you really look at the whole picture, our Government doesn’t know what to do. They develop programs like HAMP that didn’t work, loan modifications that didn’t work, they still bailed out the banks even when Congress didn’t pass that bill that caused the crash that September 29, 2008. The bailout numbers range from $700 million to $17 trillion. In all reality, will we ever know? Does it even matter? We’re all so busy recovering.
I believe in our people. We’re a strong people and incredibly resilient. We’ve lived through a major change, a devastating historical event which struck our lives personally in every way possible. Looking back, after what I witnessed in each home that I stepped into, because of the work I did for the banks, I think that the majority of the people in our country initially suffered from PTSD (Post Traumatic Stress Disorder). Then, we went into a state of PTSR (Post Traumatic Stress Reactivity). All who lost their homes, jobs and families reacted to the stress. In the first two years after the market crash (2008 -2010), it was documented by the British Journal of Psychiatry who found that more than 10,000 people committed what they labeled as “economic suicide”. These deaths spanned across the US, Canada and Europe during this recession. We can safely presume there were more since then. I’ve witnessed people who recovered well. I’ve witnessed people who lost everything and suffered from depression which caused severe health issues that they may never recover from. I’ve witnessed families severed with no chance of recovery. Most everyone is just trying to do their best because deep down, we all have anxiety about anything that most anyone, especially in power tells us. Deep down inside we know, because of that intuition that’s forming once again, to feel the presence of something that may go wrong so we can run up the hill to a safer place.
This change isn’t over. If there is one thing we can count on, is the fact that this change will be constant for many more years. Our USA has not recovered, we’re working on it, but we have not recovered. No one can fix a broken system that took 35 years to break, in just seven years. We know it. We live it and we keep working towards a better life because we are now in Post Traumatic Growth (PTG) as my good friend Heather Smith Callahan, author of “A Drop of Rain” coined as a result of “conscious decisions” to survive. And to get through this, the people we elect in the future by our conscious decisions are going to be who we put in charge of creating new laws that are going to have to be implemented including the consideration of regulating banks again. As people, we must embrace change to recover from these events to move our country forward; we cannot depend upon our government to do it for us. We can however utilize the government to get there. Our world will never be what it was, nor should it be moving forward.
Change. Change is everywhere. Change is constant. Change is inevitable.
Who is Jinean Florom? Jinean Florom is a National Real Estate Investment Consultant and Acquisition Specialist who solves intricately woven problems for Real Estate Investors on their investments.
Here is a Hard Fact: Signs of the upcoming market crash were documented by the FBI (Federal Bureau of Investigation) when they warned in 2004, of an "epidemic" in mortgage fraud, an important credit risk of nonprime mortgage lending, which, they said, could lead to "a problem that could have as much impact as the S&L crisis".
If you know anyone who would like to know this information, please share this blog. And to book a consultation with Ms. Florom, please visit www.myreitoolbox.com #myreitoolbox