Last week, RealtyTrac (realtytrac.com) released its U.S. Foreclosure Market Report for August 2010. It shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 338,836 properties in August, a 4 percent increase from the previous month. One in every 381 U.S. housing units received a foreclosure filing during the month. Yesterday, The Business Cycle Dating Committee of the National Bureau of Economic Research (nber.org) told us the recession that began in December of 2007 ended over a year ago.

Both of these items are facts supported by empirical data collected by economists even though each statement seems to contradict the other. This may be why the average person is boggled by economics and turns instead to tea party rhetoric for simple explanations they have been told are fair and balanced.

One of the many hats I’ve worn in my real estate career was selling mortgages for Wells Fargo. Until then, my understanding of mortgages was based on what I had learned in real estate school combined with the bits and pieces I picked up helping my clients get financing prior to buying a home.

After about a year I left the button-down world of Wells to begin a stint at a small family-owned mortgage company. There I observed a completely different approach to the mortgage biz: Robber-Baron Capitalism.

The last ten years have been very good to capitalists. Somehow they had lost their way and it was time to get back to basics, i.e., everyone for themselves. However, by 2008 the “average” American had tired of playing “buyer beware”. Now, just two years later it appears they’ve already forgotten the lessons of the “Great Recession”, and headed down a familiar path: Blame the current crop of politicians while completely forgetting that it was a different group of politicos with diametrically opposed viewpoints who got them into this mess in the first place.

At the family-owned mortgage company there was a picture of George W. Bush hanging on the wall over the patriarch’s desk. It was personally signed by the President, thanking the family for a generous donation.

The business philosophy embraced during this period was probably the most viscous form of capitalism this country had seen since the 19th century. Everything was oriented toward getting people into a mortgage and out the door before they knew what hit them. Everyone was so busy counting the cash extracted from their real estate credit card, they ignored the basic principle that what goes up eventually comes down.

I didn’t last very long at the family-owned brokerage. After a while the stench became overwhelming and it was obvious the regulators had lost their sense of smell. Seven years later the great mortgage meltdown was in full swing.

Some economists are now saying that as much as the economy as a whole probably won’t “double-dip”, it’s looking more and more likely that the housing market will. If the tea partiers and their Republican allies take control of Congress as predicted, help for homeowners struggling with foreclosure will dry up. When this happens banks will begin processing the backlog of properties kept in loan modification limbo up to now. This flood of devalued housing will further dilute the remaining equity middle class homeowners are clinging to. Some of them will also fall victim to the foreclosure they thought they had avoided. While all this is happening the bankers will be quietly raking in the cash and thanking God for the tea party.