Comments on: A Second Mortgage Disaster On The Horizon?

60 Minutes: New Wave Of Mortgage Rate Adjustments Could Force More Homeowners To Default

[vanfer-2009]

OOOOOO Doom and Gloom. Now when Obamawama gets in the news will be positive, LOL. What a dumb country we live in. Actually it''s a moron bore! Hey people don''t listen to dems, go out and buy STOCKS, CHEAP, build up your portfolio and laugh at them next year!!!!!!!!

[dannyinsocal]

" So, given that you''''re in the real estate biz, do you agree with this story''''s doomsday prediction? "

Yes. My personal opinion is another 40% down over the next five years.

It''s a catch 22. The bottom can''t hit until lenders are able to make 80/10 mortgages - Or offer 80% stated programs again.

The lenders can''t offer those programs until we hit bottom.

And I agree - 2011 is going to make 2007/2008/2009 seem like a cake walk.

The good news?

I just saved a bunch of money on my motorcycle insurance by out running a cop......

Thanx, D

[dannyinsocal]

HHAhHhaHA - Blame it on Bush.

Forget the increased pressure the Dem''s created on lenders with their CRA requirements.

Forget the fact that Fannie and Freddie were let loose to make any loan to anyone.

Who exactly was it that made MILLIONS while running Fannie and Freddie - While they lost BILLIONS...?

Let''s not let the facts get in the way of an ignorant generalization...

Yes - It''s obviously all Bush''s fault.

Comical.

DannyInSocal

[azwamu]

Scott talked to the wrong person in Whitney Tilson. He predicts that the %u201Cyearly%u201D reset on Option ARM loans, along with Alt-A loans, is going to cause a problem.
1 - I worked as a Wholesale Lending Acct Manager at Wamu''s main AZ office in Phoenix before they shut down their wholesale operation and I''m shocked that Whitney Tilson is so uniformed about Option ARM loans.
2 %u2013 Rates on an Option ARM loan adjust monthly based on the 12 MTA or CMT (moneycafe.com/library/mta.htm), not yearly. The min. payment adjusts yearly, up or down 7.5%, not the 30 yr amortized pmt, and most Alt-A loans were Option ARM loans.
3 %u2013 Fed just reduced the rates making the Option ARM loan the loan to have in a sinking rate market (Margin of 3% + Index(MTA) 1% = Rate of 4%).
4 - Scott needs to talk with Herb Sandler, former owner of Golden West Financial, who sold out to Wachovia just before the 2006 downturn and pocketed $4 Billion. He%u2019s the one with the crystal ball, not Whitney Tilson.

[theghostpony]

And while we''re at it, let''s not loose sight of the guy still occupying in the Oval Office on who''s watch this occurred. Don''t believe for a minute he didn''t know what was going down.

[dunvarna-2009]

harryboller must be an idiot. Why would your interest rate and your payments NOT GO UP. That is the theory behind an ARM (ADJUSTABLE RATE MORTGAGE)It sounds like you bought a house you could not afford. YOU MUST ALWAYS READ THE FINE PRINT BEFORE SIGNING.It sounds like they gave you enough rope to hang yourself and we the taxpayer are going to pay for YOUR FISCAL IRRESPONSIBILITY.

[harryboller]

I was in an option arm and I tell you what my broker never told me my payment was gonna double. my payment went from 2300 to 4100. I tried to refinance but everyone said my home wasnt worth enough. I tried to deal with countrywide but they just told me to sell pay or lose the home. I finally found this company online www.proloanmods.com and after about a month they were able to get me a fixed principal and intrest loan at 5.25. I would recommend them to anyone who got fooled into one of those option arms

[theghostpony]

This Whitney Tilson person is supposed to be the "expert" yet didn''t see this coming until last year?!? I saw this coming over five years ago when a family member who was under employed and receiving public assistance was able to secure a no money down, no questions asked mortgage. It didn''t take much digging to uncover the scam and who was behind it.

[bobnjersey]

[It''''s hard to find much of a silver lining anywhere.]
[Posted by Jacksonian6 at 12:44 AM : Dec 16, 2008]

believe it or not ... short of a complete failure of the capitalist model ... the stock market is where the silver lining is.

of course, you have to have money you can afford to lose ... but there are once in a lifetime buying opportunities there. many stocks are trading at 1/2th to 1/20th of what they were at within the last year.

[rf35]

I think it''s finally time for me to buy that house!

[itsbeencomin]

the problems this country has and continues to have, financially and socially, are to numerous and big for anyone to put their arms around. this has been coming for 40 years, it''s about time. the only way to bring some normalcy to this country is for a total collapse...bout time

[wl7bzh]

Bring it back and you will see many more families able to stay in their homes for another 5 years while we hopefully pull out of this downturn.

Posted by TheBaroness1 at 10:58 PM : Dec 15, 2008

Or better yet, people burdened with over-priced mortgages from smooth talking loan officers could simply walk away leaving the sharks to feed on themselves.

[payasyougo]

"You''''re hind sight is 20/20... but its a little late for that now... There should have been rules in place that kept peopel from borrowing more then they can afford so this never happened.

Obviously you still believe in humanity and don''''t see greed and those that coventh... Without rules that loan money to what a person can afford we have 2 problems. Those living beyond their menas, and the effect it has on drving up the cost of home prices. This followed by more people borrowing more to afford those same homes and the snowball effect is in play."
-----

Those rules existed and worked well for decades. Then came the community reinvestment act and it did away with those rules.

[catlady1412]

It is hard to stimulate anyone to spend money with stories like these, predicting further doom. I just finally paid off all my credit card debt and now only have a mortgage, a truck, and a small home-improvement loan to pay off. My husband has a good job, pretty recession proof, so we should be safe but these stories really make it seem we are not safe from financial disaster. I have no idea what to think the next year will bring for myself, let alone people who are really poor and in trouble. Is this story really useful? Or does it just make people who have no control over these things panic?

[jacksonian6]

Notwithstanding the impact of option ARMs and Alt-A financing, what does the climbing unemployment rate portend for the housing market? It''s hard to find much of a silver lining anywhere. The mantra of "Jobs, jobs, jobs" seems as key to the real-estate business as its traditional, "location, location, location," axiom. It''s looking more and more as if massive government intervention in this area will be necessary too. Given everything that''s going on, it''s hard not to wonder when-- rather than if-- we will sink into another Great Depression.

[thebaroness1]

As a loan officer and financial advisor, I used the Option ARM almost exclusively until its disappearance in the past 12 months. When clients come back to me to refinance, only now can I offer rates as low as their option ARM. If you amoritize closing costs, there is no logical reason to refinance. If you only paid minimum payment, your loan grows, so if you can pay more,make the 15 or 30 year payment while rates are down. When rates go up, you will have less to base the payment on. Historically the index has been low because of the security it is linked to. This loan has allowed people time to get their financial houses in order, instead of plunging into immediate foreclosure with a fixed rate mortgage where there is no flexibility in payment. The bad rap on this loan is made out of ignorance of how the vehicle works. Bring it back and you will see many more families able to stay in their homes for another 5 years while we hopefully pull out of this downturn.

[readdis]

I somewhat agree with you, but I know as a lender for a institute that scrutinizes everything from job history to residential history that by the time I get through the process of verification that a borrower will usually seek out the path of least resistance even if the borrower has to pay a prime in interest rates.

[ddaryl1]

The borrower is just as much at fault as the lender and don''''t think for a minute that the borrower was concerned with the so called teaser rate when they walked out with a loan. It''''s time for America to live within its means and stop trying to keep up with the Jones.

Posted by readdis
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You''re hind sight is 20/20... but its a little late for that now... There should have been rules in place that kept peopel from borrowing more then they can afford so this never happened.

Obviously you still believe in humanity and don''t see greed and those that coventh... Without rules that loan money to what a person can afford we have 2 problems. Those living beyond their menas, and the effect it has on drving up the cost of home prices. This followed by more people borrowing more to afford those same homes and the snowball effect is in play.

there is nothing that can be done but the pain will be felt by everyone including people like us who have lived well within their means...

they screwed us all in the name of greed.

[readdis]

The borrower is just as much at fault as the lender and don''t think for a minute that the borrower was concerned with the so called teaser rate when they walked out with a loan. It''s time for America to live within its means and stop trying to keep up with the Jones.

[gphinds]

I VIEWED THE PIECE BY SCOTT PELLEY ON MORTGAGE MELTDOWN. I CAN''T FIGURE WHY THE MEDIA IS CONSISTANTELY OVERDOESING THE PUBLIC WITH NEGATIVE INFORMATION SUCH AS THIS. YES THERE IS A CRISICS; HOWEVER BALANCE YOUR REPORT WITH ALL OF THE NEW BUYERS THAT ARE ENTERING THE MARKET BECAUSE IN SOME AREAS REAL ESTATE PRICES HAVE BEEN CUT IN HALF.