Today, every Joe Schmo like me has to protect himself from his fellow Americans by becoming learned about our country’s health-insurance plans, home-insurance plans, credit cards, auto buying, house buying, mortgage debt, consumer goods, medical issues, macro-economic drivers of the economy, derivatives of derivatives, global warming/cooling/staying the same, the IRS code and layer after layer of complexity in our laws, regulations and how we do business that few of us fully understand them.

I am, therefore, a sucker for books written by any insider who shows me how an opaque system actually works, how the unlearned are routinely shorn of both their money and faith and, finally, how ol’ Joe might not level the playing field but at least understand how it’s tipped against him.

Several real-estate writers have deconstructed the mortgage and refinancing processes from a consumer’s perspective. Robert Irwin’s, Tips & Traps When Mortgage Hunting (McGraw-Hill, 1992) and Julie Garton-Good’s, All About Mortgages: Insider Tips to Finance or Refinance Your Home, 2^nd ed. (Dearborn, 1999) are two that I have on my shelf. I’ve now added Carolyn Warren’s, Homebuyers Beware: Who’s Ripping You Off Now?—What You Must Know About The New Rules of Mortgage and Credit (FT Press, 2010; www.mortgagehelper.com and www.AskCarolynWarren.com) as a current and useful addition. I have also followed Jack Guttentag for many years, at www.mtgprofessor.com.

Warren takes the position that the mortgage finance business is staffed with both decent individuals as well as others who routinely take advantage of their customers and add profit to their work through concealment and lies.  She cites numerous personal anecdotes to support her opinions. She wants borrowers to learn how to tell the difference and flow toward the decent folks.

For 12 years, Warren worked in mortgage lending, both the retail and wholesale sides. She worked for Full Spectrum Lending/Countrywide Home Loans, Ameriquest, Green Tree Financial/Conseco and First Franklin. She now works as a broker/banker, writes and operates two websites.

Borrowers need to understand that they are shopping among lenders who usually want to make as much money on the loan as they can without driving the customer to the next lender. Borrowers want the cheapest loan with the best terms; lenders want to give loans that work for them.

Each lender has a minimum amount of yield that it requires on each loan. The yield is determined by each lender’s particular combination of offered interest rate, terms, fees, points and charges. It’s difficult for a borrower to get four apples on the comparison table at one time, though comparing total loan costs is one approach to making a decision rather than just looking at interest rates.

Mortgage brokers are often able to offer the best deals to the extent that they are networked in to a number of wholesale, competing lenders. But a borrower may find a broker motivated to get the borrower into the best deal for the broker that the borrower will accept.

Credit unions are non-profits that work for their members. Warren says that she could, as a motivated broker, beat credit unions 99 percent of the time. Credit unions should be absolutely transparent and forthright with borrowers. Banks and mortgage brokers are only as good as their corporate cultures and individual loan officers; they may or may not be transparent and forthright.

She urges borrowers not to shop for rates among lenders as their first step into the soup. She suggests, instead, to shop for a loan officer by asking candidates for a Good Faith Estimate (GFE) after giving each your price range, amount you can put down and your credit score. You will get a written document that shows how each lender structures the costs to the borrower within an approximation of the interest rate you will get. The borrower should then choose a loan officer (and institution), she writes.

I agree that shopping for the lowest rate among lenders as the first-cut selection criterion is a waste of time, because rates change within each day and some lenders will quote low rates that they won’t deliver.

I’ve had reasonable loan-shopping success with a little different approach. I put together a “most-likely” set of lenders—credit union, two brokers and a bank or two. I prepare a package of material with all of the documents they need to get a complete picture of my finances and who I am. A borrower needs to do this sooner or later, so why not sooner?

Among other items, I include my two most recent 1040s, net worth document, recent statements from banks, credit cards, brokerages, current W2s, credit score and so on. I write a detailed letter spelling out what I want to buy, what type of loan I want, projected cash flow and explanations of anything that is hard to document, quirky or adverse. I try to give each lender all the information they need to make a loan decision without asking them to commit to a loan just then.

On a refinancing, I give an estimated FMV value of the property along with information on current loans, less-than-obvious assets and liabilities in the property and explanation of why I’m refinancing, possible cash flow from the property, plans, expectations and so forth. I do not include a current appraisal, because my chosen lender will require that I pay for one done for his institution. No need to pay twice.  I also try to refresh my recollection of the vocabulary, concepts, tax considerations and tricks in the process, all of which I tend to forget as soon as possible.

I ask in return a GFE from each prospect. That gives me paper to compare and books like Warren’s to ferret out the total cost to me of each GFE. I, too, look for reasonable chemistry in a loan officer. A personal connection always makes the process easier.

Warren’s book helps a borrower understand this cloudy process. At issue in this tug-of-war between lender and borrower is money out of the latter’s pocket, upfront and over time. The simple rule in this complex world is: The more you know, the better deal you’ll get.

Know about a par rate? A Yield Spread Premium? The new GFE form?

Read Warren’s book. You will save its $19.99 cost many times over if you apply its information to your own circumstances.

The USDA reports some 20,000 organic farms are currently operating.

I am not a broker and don’t provide broker services or act in an agency relationship with clients. I help buyers research property purchases as a consultant.

The agent representing the seller who is associated with a major real-estate brokerage showed up with her seven year old, who, she said, she was home-schooling. The child understandably was not interested in the leaking skylight in the farmhouse or the dozen 4 x 4 props in its basement holding up the first floor. I suggested that we turn on the seller’s tv and park the kid in front of “Sponge Bob Square Pants.”

She said she was not the listing agent even though her name was the contact on the Internet ad. She had shown the property before and was familiar with the house and the seller. She described herself as “specializing in land.” She was not an Accredited Land Consultant.

She came with a copy of the survey, seller-paid home inspection, listing agreement, tax-assessed value and yearly tax, purchase-offer contract and offer-proposal form.

Here’s what she did not know:

1. Soil Survey. This the CD or book that contains all the soil maps for the county and indicates which soil types are appropriate and inappropriate for which uses. She said the soils were sandy and loamy, which we had determined before her arrival by digging about 20 test holes.

2. Schedule F. She did not know the IRS schedule on which farms report income and expenses.

3. Copy of deed into the seller. She wasn’t sure whether it was a general warranty deed. She did not have deed book and page number, which I found on the survey and provided to her.

4. The seller’s purchase price in 2004.

5. The original amount of the seller’s mortgage.

6. The remaining principal on the seller’s mortgage and mortgage terms.

7. Whether the mortgage was assumable.

8. Name of the lender holding the seller’s mortgage.

9. The name of the organization that had certified the farm as meeting its organic standards. She did not have a copy of the farm’s current certificate in the file.

10. Date of the last reassessment. Date of the next reassessment.

11. How the asking price was set? Was it based on a competitive market analysis?

12. Number of finished square feet in the residence.

13. Number of bedrooms or square feet the “new” septic system was permitted for.

14. Cost per square foot of new construction in the local area.

Here’s what she was sketchy on, ranging from a little to a lot:

1. Information on the drilled well—depth, capacity, diameter of line to house.

2. Comps for 10 acres of farm land, like that being sold.

3. Comps for house, as a stand-alone property.

4. Minimum lot size and division potential. She thought one division was permitted.

5. Two “offers” now in front of the seller. She did not say whether these were

written contract offers or “proposals to offer.” One at $248,000, she said, was unacceptable. The other was under consideration. Both, she said, had a May deadline. I did not know whether to believe all, some or nothing of what she had just said.

6. Amount of farm revenue the sellers earned from their efforts.

7. Last time farm actually produced crops for sale. It looked to me that the farm had not operated in 2008. The two tractors and chipper were out in the weather, uncovered. The plastic on the two small greenhouses was down. The fields were weedy.

When I asked to see and read a copy of the contract the buyer would be expected to sign, she refused to show it to the buyers or me. Instead, she gave me — not them — a seconds-long glance at a “proposal form,” which included an offering price and terms, among things I saw, and other things that I did not have a chance to see. At that point, I suggested that the buyers have their local lawyer draft a contract for them.

John Wooten, the famous UCLA basketball coach, said: “Failing to prepare is preparing to fail.” He was right. The fewer answers this agent had, the more I distrusted the information she provided. We were ready to move forward into a contract; the agent was not.

Is it too much to ask of agents representing sellers to know what they’re selling?

Why is everyone stuck? Fear and money.

Sellers are afraid to sell at prices lower than a year ago, and buyers are afraid to buy until the market bottoms out.

Sellers and buyers are afraid to lose money; lenders are afraid to lend it.

Everyone is scared of the future.

Might it be said that the main thing we have to fear is…ourselves.

Doing the same will not solve this mess. Doing different — lenders lending, sellers selling, buyers buying — will.

It’s important to understand that it was less subprime lending that produced this crisis, and more the burying of IED-type adjustable-rate mortgages under these borrowers. Lenders knew these ARMs would explode when the economy weakened or rates rose.

Long-term, fixed-rate mortgages work with subprime borrowers. They did with the subprime WW II vets who drove our economy for 25 years after WW II.

Everyone — lenders, buyers, sellers, appraisers, brokers and mortgage investors — produced this crash by perceiving a shared self-interest in blowing air into a real-estate balloon. Everyone should share the pain and responsibility for putting things right with each other.

How can sellers help themselves?

Adjust your expectations to fit the game as it is. Forget about an all-cash, full-price offer. Times have changed. Sellers need to talk frankly with themselves.

Is it more necessary for you to get your property sold quickly, or wait a year for the price you might have gotten a year ago? Can you comfortably carry the property for a year or two before selling? In that case, take it off the market. How much cash do you need immediately? If you don’t need cash from a sale, don’t insist that a buyer give you his life savings.

If you need to sell because you have to buy something else, ask your seller to do what you will be doing for your buyer–helping the other side solve the other side’s problem as a path to solving yours.

Stop being a victim. Some sellers are more pinched than others. Those who can no longer make their monthly mortgage payment need to march into their lender’s office with a Barney Frank proposal: Knock off some of the principal and figure out a fixed-rate loan that works for both sides. Many lenders understand that foreclosure in a falling market is a worse alternative.

Start being a banker. Take responsibility for making the sale. It’s time to be aggressively helpful. Identify your buyer’s weakness and see if a way can’t be found to do a deal that will work for both sides. Stop thinking conventionally.

When a reasonably qualified buyer can’t find conventional mortgage money, offer seller-financing for a couple of years. If it’s lack of down payment, finance the sale and take a first lien on some additional buyer asset that will add security. If he can’t cover all the closing costs, many ways are available for a seller to help out. If he’s fearful of falling values, offer a lease-purchase option.

Seller-financing arrangements need to be fair to both buyer and seller. The buyer gets a big break on interest if only because the seller generally does not frontload interest. The buyer is also spared the loan-origination fees that typically stack an additional two to five percent on top of a conventional loan.

Seller financing gives buyers better terms, lower costs, more flexibility, more speed, less rigmarole, possible waiving or discounting of a down payment and whatever other help a seller finds that it’s in his interest to do.

A financing seller helps himself too. He gets his property sold on a delayed-closing track and is paid interest while he’s waiting. He gets to spread capital gains over time and may avoid being slung into a higher tax bracket in the sale year.

The seller is secure, because his own property — and possibly other buyer assets — collateralize the deal. The seller is not lending money to the buyer, but he is lending his property under specific conditions and terms of payment. In return for helping the buyer, a seller usually charges a slightly higher interest rate.

Lawyers for both buyer and seller should write the seller-financing documents. Both sides need to be protected. A seller who finances his own sale for a couple of years is giving the buyer time to arrange permanent financing in better times.

As long as his property will not be harmed or devalued during the buyer’s occupancy, a flexible seller can get a sale moving by acting as his buyer’s short-term banker. At worst, the seller gets his property back and keeps whatever money the buyer has paid.

If you think you have no flexibility, rethink your situation. Do you really need all cash immediately? Isn’t there a way to take some now and the rest later? Have you set your price based on what you actually need or on what comps were selling for at the beginning of 2007? If you’re an upside down seller, the best course may be tell your lender to help you tough it out.

Find mortgage money. If a seller doesn’t want to finance the purchase, help the buyer find a lender.

Talk to your own lender first. Disclose your circumstances. Ask him to give you a hand with a buyer before you fail to perform on “his” mortgage. In return for getting a stronger borrower on a property he already knows, see if he will discount terms and fees. Even if your mortgage does not contain an assumption clause, ask the lender to help himself and you by okaying a replacement without the usual scalping.

If your current lender is no more flexible than an Easter Island Moai statue, then find one who gets the current market.

Think outside the bank. You may need to forget the big lenders, particularly those who are immersed in a misery largely of their own making. You and your buyer should look toward credit unions, small lenders and state-chartered banks. The regional coops organized under the federal Agricultural Credit Associations provide loans for farms and rural housing at http://www.farmcredt.com/. Advertise for a private investor willing to finance a two- or three-year bridge.

Think more complicated, less simple. If you want to sell in this market, prepare to be flexible and more involved both financially and over time with your buyer than you might want.

Help your buyer understand your property’s potential for him. Rural real estate often lends itself to paying down a mortgage more or less immediately through the sale of non-core assets such as merchantable timber or an unwanted piece of land, leases of land or rights and donation of a conservation easement that limits development in return for substantial tax benefits. If the buyer needs someone to hold his hand doing new things, offer yours.

A real-estate lawyer and a CPA can help you and your buyer think through different approaches.

The way out of our hole begins when we stop digging it.

Lenders need to stop foreclosing because each such property new on the market further depresses real-estate values and increases the likelihood of additional defaults. Foreclosures make the future worse.

Lenders should convert their troubled adjustable-rate mortgages to long-term fixed rates and keep as many of their borrowers in their houses as they can. That’s not an act of charity; it’s an act of self-interest.

If no one stops digging, inflation coupled with increasing unemployment, stagnant economic growth, falling property values and a rising tax burden will wreck us all.

A lot of people need to take small, often painful steps that, together, will slow, then stop, digging this hole to China.

Today, the seller controls the buyer’s ability to acquire the seller’s property. The ladder out requires both sellers and buyers to hold it in place.