Help Yourself

As this issue went to press, a few of those who helped create the massive government bailout plan for Wall Street were explaining details of the proposal to Congress. Some legislators want the bailout plan to include assistance for homeowners who are struggling to pay their mortgages. Other legislators want government to own a piece of each firm being bailed out. Details are being hammered out. Time will tell if the bailout proposal works, or if economic salvation will arrive in some other form.

For Fannie Mae and Freddie Mac, as well as insurer American International Group, salvation arrived a few weeks ago. The proposed bailout in which the government would buy hundreds of billions of dollars of bad mortgage debt would mark one more time in recent weeks the government will have bailed out people who seemingly made poor decisions and acted irresponsibly.

On one hand, it would be great if the government would bail me out of my debt. And it would be nice if the bailout plan actually stopped the economic bleeding for all of us. On the other hand, I put myself in debt and I should get myself out and suffer any consequences if I can’t. Similarly, the people who created the crazy mortgage and credit crisis we’re experiencing should be punished for any illegal, intentionally misleading or irresponsible actions that contributed to the mess we’re in. Without consequences, behavior doesn’t change.

When I think back to years ago when I received a mortgage approval letter for an amount equal to about half the combined income my wife and I earned at the time, and when I think about the crazy mortgage configurations the lending agents tried to shove down our throats, I don’t laugh like I did then. First I feel glad we made the smart choice to take a 30-year fixed mortgage, then I feel bad for the people who for whatever reason grabbed the contorted American dream dangled in front of them. My wife and I would be statistics today if we didn’t think twice six years ago. We’d be in big trouble right now, looking for a way out.

Many of the troubled Wall Street firms are looking to government aid as a way out, while life goes on for those who design and build custom homes. I urge those in the custom home market to look within themselves and their businesses, or to turn to each other for support and solutions. I heard about one small group of builders that believes in self-help so much they’re spending their own money this month on airfare and hotel costs to meet for two days to discuss ways to survive these unstable times.

How refreshing it is to see business owners taking control of their future rather than looking for handouts. Instead of holding onto that money and doing nothing, these builders are showing trust in their experience by investing in themselves and their future.

But you don’t have to spend much more than the cost of a tank of gas to meet with builders and other professionals to conduct a similar roundtable discussion. Ask a few of your colleagues — and even competitors — to meet at your office for a day, or meet at one of your unsold homes. Keep costs manageable by having sandwiches delivered for lunch. With a little thought and planning you can form your own brain trust and begin helping yourselves. I wish you all success.