STORY #1: GIVING BACK MONEY WHEN NOBODY WOULD KNOW
When I closed my first mortgage loan in 1994, the commission check from the wholesale lender was $1,500 too high. Everyone told me to just keep the money b/c lenders were unable to catch errors back then.
I needed the money badly but I still sent back the extra funds, and never heard the end of it from my co-workers.
But, by the late 1990s, my reputation was established, and a major source of my business was obtaining loans for others in the mortgage industry. They came to me (instead of using their own lenders) b/c they knew how honest I was, and they knew I’d tell no one about their personal info.
STORY #2: MAN PROPOSES A CAN’T-MISS GET RICH QUICK SCHEME
In 2006, a man visited my office to propose a scheme to buy and flip multiple homes using straw buyers. He had it all planned out, had done it successfully already, and showed me how I’d make millions. I said no of course, but he went on to find others who were lured by the huge profits, especially b/c things were starting to slow down, and they all ended up indicted. I knew one of the victims in fact. These schemes were all too common prior to the meltdown, and it amazed me how many people fell for them.
STORY #3: WATCH OUT FOR ACCOMPLICES
The Planet Money Podcast recently repeated a fascinating story about a CPA who destroyed his career and life by helping out a “friend.” Scott was an extremely successful KPMG CPA who was renowned for his integrity. Bryan, a failing jeweler and a golf buddy of Scott’s, asked Scott to help him out with some insider information that he could trade on to bail out his jewelry business. Out of pity for Bryan, Scott naively helped. Bryan then got greedy and started to trade so aggressively that the SEC and FBI noticed. Then, in order to avoid a harsher sentence, Bryan set up his “friend” Scott in a sting operation, destroying Scott’s career and life.
Scott was foolish no doubt, but it is a great reminder that when you work with anyone with integrity issues, you will likely get burned and the worst offenders will of course turn on you. We saw this happen with all kinds of mortgage industry people after the meltdown, when everyone under investigation quickly turned on everyone else.
STORY #4: KIRK KERKORIAN – BILLION DOLLAR HANDSHAKE DEALS
I just finished a biography about Kerkorian. He was an amazing man who accumulated billions (in hotels, casinos, MGM and other investments) even though he only had an 8th grade education and grew up extremely poor as the son of an Armenian immigrant. I will blog about him more later b/c he is so interesting.
In any case, a major reason behind his success was his extreme integrity. One of the ways big deal-makers make money is with their ability to raise financing for huge deals very quickly. Kerkorian could raise billions in financing faster than anyone else b/c everyone trusted him so much; he was renowned for honoring every handshake deal no matter the stakes or the results.
In any case – there is no lesson we all haven’t already heard with any of these stories. They are just interesting reminders though that extreme integrity always pays off in spades no matter the stakes.
Jay Voorhees at (925) 855-4491
Real Estate Broker, CA Bureau of Real Estate, BRE# 01524255, NMLS# 335646