We’re all Goonies now

I caught an old movie over the long weekend. One of the cable channels (I don’t know which one. It comes on after you hit the next channel button a couple hundred times in search of something to watch) was running the 1985 film “The Goonies.” It took me back to my college days and surprised me with a critical connection to the mortgage lending business I’d never noticed before. Without going into a lot of detail, the movie revolves around a group of kids (led by a sword wielding Sean Astin long before his “Lord of the Ring” days) who are desperate to help their parents stave off the impending foreclosure of their home. The antagonists are a family of petty criminals, led by Anne Ramsey, that tries to beat the kids to a fabled treasure that folklore says is hidden in a cave by the bay. But the real bad guys are the rich mortgage holders who plan to foreclose on all of the neighborhood homes and build a golf course. Even back in the 1980s, you could count on moviegoers to know that rich folks who hold your mortgage cannot be trusted. But things were different back then. Today, with an estimated half a million homes owned by banks and enough shadow inventory to keep our real estate agents in homes to sell for over four years without building any more, bankers don’t even want to think about another foreclosure. This is too bad because other estimates suggest that we’ve only worked our way through about half of the properties that will eventually be foreclosed upon. Of course, banks will have to work against the courts, shoddy paper trails in their own shops and their partners’, legislators and the plaintiff’s bar to get these foreclosures done. If they don’t, it could hold off a housing recovery for … well, no one knows for how long. It should come as no surprise that today, everyone wants to be on the Goonies’ team. Bankers don’t want to deal with REO any more than homeowners want to be kicked out of their houses. It would be easier to make everyone happy if people paid their mortgages. I realize that’s not a politically correct thing to say. We are in the middle of an economic downturn and people do get sick and divorced, to say nothing of strategic default. I just think that if more people thought like the Goonies, this problem wouldn’t be as serious as it is. This group of kids know that they’re about to lose their home and have to start over at a new school. They don’t even discuss why their parents are behind on the mortgage, except to show the mother’s arm in a cast and throw out one line about how the dad was passed over for a promotion. Instead, they focus on what they can do to get the mortgage paid. It’s the hook that spins us into the movie. The Goonies win in the movie because the kids make the conscious decision to take control of their lives and risk everything on an adventure that just might give them a chance to stay in their home. It’s totally unrealistic, ’80s fun that bears no resemblance to anything in the real world. And yet, the film worked for a lot of people of my generation because it spoke to that part of us that believed we could take control — the part that didn’t sit around waiting for an unemployment check or a government bailout. Maybe our industry isn’t the best one to tell folks not to take the bailout money if Uncle Sam stops by with his checkbook, but I have to believe we’d all be a lot better off if none of us took it and we acted more like Goonies. Rick Grant is veteran journalist covering mortgage technology and the financial industry. Follow him on Twitter: @NYRickGrant