BLOG VIEW: The great novelist Arthur Koestler once wrote, ‘If one looks with a cold eye at the mess man has made of history, it is difficult to avoid the conclusion that he has been afflicted by some built-in mental disorder which drives him towards self-destruction.’ Can you imagine what Koestler would have written if he lived to witness the ongoing spectacle involving actor Charlie Sheen?
While the Sheen spectacle may generate bafflement and exasperation from many people, I believe there are strong business-to-business lessons to be learned from the star's recent antics. Here are a few teachable lessons that the mortgage banking industry can absorb and, hopefully, remember.
Think twice before you say something that can boomerang back at you. While Sheen had been floating around the pop-culture world for a number of years as something of a Hollywood bad boy, his problems never truly percolated until he began shooting his mouth off with a nonstop skein of wild and insulting comments. Some of the truly absurd statements that he's made have become the fodder of snarky comedians – and there's even an online comic strip that merges Sheen-worthy pronouncements with unauthorized reproductions of the comic strip The Family Circus.
Nothing can sink your reputation faster than publicly saying something that will come back to haunt you. Think back to four years ago, when Fed Chairman Ben Bernanke insisted that the economy was in no danger of sliding into a recession while Doug Duncan, then an economist with the Mortgage Bankers Association (MBA), insisted that subprime was alive and well and that problems with the sector were strictly limited to seven states.
Then, there was the case of MBA President and CEO John Courson using the media to encourage distressed homeowners to stay in their residences and pay their mortgages, even if they were underwater – but that was before Courson successfully managed to get the MBA out of its expensive Washington, D.C., headquarters because it was unable to make its mortgage payments. Get the idea?
No one ultimately gets away with bad behavior. Sheen's recent controversies are actually the culmination of a long period of unfortunate behavior. For the longest time, however, many people were willing to look beyond his considerable lapses with the hope that better times would be ahead. Ultimately, though, Sheen's rowdiness went so out of control that he was been fired from his ‘Two and a Half Men’ television show.
In the past five years, the industry has learned what happens when bad behavior catches up with you. Granted, there is a significant difference between issuing high-risk subprime loans to severely unqualified borrowers and hosting excessively raucous Hollywood parties, but I suspect that you understand the point. The reckless and careless origination practices of the housing-bubble period, coupled with the sloppy securitization efforts by the government-sponsored enterprises and the Wall Street crowd, was the financial services industry's equivalent of an out-of-control party – and we're still living with the hangover of that blowout.
Good people get hurt by the bad behavior of others. It might be amusing to score a cheap laugh at Sheen's expense, but his behavior has brought about collateral damage to his family (particularly his young children) and to the people involved in the production of his television show (who abruptly found themselves out of work when the series was canceled for the remainder of the season).
Likewise, this industry has seen what happened in the aftermath of bad behavior of a relatively small number of entities: suffocating regulatory controls blanketing an entire industry, damning every lender, whether or not they had anything to do with the roots of the economic crisis. This has been particularly cruel to the smaller community banks and credit unions, which played no part in the over-inflating of the housing bubble, but which are now paying the price for the misdeeds of others.
No crisis lasts forever. As of this writing, it appears that future opportunities are evolving that will sweep away a lot of the current Sheen mess. The producers of ‘Two and a Half Men’ are reportedly looking to replace Sheen with another actor, while Sheen is supposedly in talks to get a new show on Mark Cuban's HDNet cable network. And while Sheen was axed from ‘Two and a Half Men,’ CBS is still keeping the show in reruns in its lucrative Monday night slot – making money for the network, the show's producers and its controversial star.
As for our industry, bouncing back has been a lot slower and more cumbersome, but we appear to be moving in the right direction. Despite negative publicity, excessive regulations and an economy that has not quite remembered how to get back on its feet, mortgage banking is still vibrant and flourishing, and it will continue to be as long as people need homes.
In that sense, the industry is living the reality envisioned by the aforementioned Arthur Koestler, who wisely said, ‘Courage is never to let your actions be influenced by your fears.’ And as long as the industry's leaders do not brag about having tiger blood in their veins, I think we will be okay.
– Phil Hall, editor, Secondary Marketing Executive
(Please address all comments regarding this opinion column to hallp@sme-online.com.)
(Photograph of Charlie Sheen in ‘Two and a Half Men’ courtesy of CBS)
