Dec. 14, 2008
A Second Mortgage Disaster On The Horizon?
60 Minutes: New Wave Of Mortgage Rate Adjustments Could Force More Homeowners To Default
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Play CBS Video Video The Mortgage Meltdown Scott Pelley reports on the mortgage crisis that's far from over, with a second wave of expected defaults on the way that could deepen the bottom of the U.S. recession.
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(AP)
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Interactive Eye On The Economy In-depth features on U.S. markets, taxes, employment and the Federal Reserve.
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In-Depth Q&A: Mortgage Help New plan to allow lenders to alter delinquent loans more quickly.
"The same craziness that occurred in the mortgage market occurred in the commercial real estate markets. And that's taking a little longer to show. But there are gonna be big losses there. Credit cars, auto loans. You name it. So, we're still, you know, we're maybe halfway through the mortgage bubble. But we may only be in the third inning of the overall bursting of this asset bubble," Tilson says.
"Does that mean that the stock market is gonna continue plunging as we've seen the last several months?" Pelley asks.
"Actually we're the most bullish we've been in 10 years of managing money. And the reason is because the stock market, for the first time I can say this, in years, has finally figured out how bad things are going to be. And the stock market is forward looking. And with U.S. stocks down nearly 50 percent from their highs, we're actually finding bargains galore. We think corporate America's on sale," Tilson says.
The stock market will still have a lot of figuring to do with more troubling news on the horizon. The mortgage bankers association says one out of 10 Americans is now behind on their mortgage. That's the most since they started keeping records in 1979.
Produced by David Gelber and Joel Bach
© MMVIII, CBS Worldwide Inc. All Rights Reserved.
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See all 215 Comments<a href"http://100-mortgage.com"> mortgage </a> and a few other places.
Have the governments and news people been quite about this in fear of creating an even worse case of depression, deflation and financial collapse? I suppose I have answered my own question.
going to admit that it was their coercing of banks to make the loans to people that couldn't afford them that started this travesty. But you can all smile, because Jimmy Carter finally gets to live his second term through the "almighty" Obama.
Thanh God for the internet, talk radio and FOXNEWS to counteract the drivel spewed by ABC,CBS,ABC and CNN.
I''m getting a headache worrying about what''s to come.... What''s going to happen to my family, my neighbors, my clients, my home''s value, my neighborhood? So many people are going to get hurt and there''s no way out.
I''m a person of average intelligence with no financial knowledge. It''s greek to me. But even I knew that there was simply no way a family making less than 100k/yr could afford these outrageously priced homes. When did they expect to pay them off? What did they think would happen?
I blame greedy people more than I blame the banks. Sure, the banks were stupid for extending these risky loans but no one forced people at gun point into these crazy, stupid loans. I''m sure some folks did get lied to and they have my sympathies. But for the most part people were just being greedy and short sighted, and now they''re losing their homes and crying for the government to clean up the mess they helped cause, yet refuse to take responsibility for. It irks me to hear people gripe and moan because there are those of us who have been responsible and didn''t overextend ourselves. What happened to living within your means?
There''s no excuse for banks adjusting them upwards in the current market. That''s like lighting a cigarette while pumping gas: don''t be surpised when there''s a huge explosion and nobody comes running to help.
The ney sayers and folks who are griping about this being "fear mongering" are having some trouble smelling the coffee...
When folks who are getting turned down for cell phones, can go out and buy a $500,000 homes... it is an actuarial fact that most of them are going to default on their loans.
When folks buy homes, that they can JUST afford, at teaser rates, and now they have lost income and their homes have dropped in value by 25%... it''s game over.
On average... in 2005 thru 2007, there was a NEGATIVE savings rate in the U.S.
All the armchair genius aside... you can''t defeat the math here. People who paid attention and did the simple math... they (we) have been talking about this since early 2005. Where the hell were the rest of you?
http://www.businessweek.com/magazine/content/06_37/b4000001.htm
They were called a "ticking time bomb" and World Savings who was bought out by Wachovia in 2006 (no wonder they went under) was one of the biggest originators of these toxic loans. I never did one since I never saw the benefit for any of my customers. I have heard that Countrywide is/was really exposed to these with high defaults since they used their own appraiser and they went over 80% of appraised value.
I have no idea what 60 Minutes is talking about with the "Alt A" loans resetting in the next 2-3 years along with the payment option ARMs??? They have been re-setting in the last couple of years. These "negative amortization" loans have already been since 2005 why do you think all these expensive houses are going into foreclosure?? It wasn''t the "subprime" loans it was these type of ARMs. Also, the "subprime" ARMs were being originated through first part of 2007 so these 2 year ARMs should be coming up this spring. After that, they should be cycled through unless people can''t get them refinanced.
This is just more "doom and gloom" reporting that 60 Minutes and others use as a ploy to get more ratings.
Scott
The world''s economy is based on TRUST and CONFIDENCE.
We lost trust and confidence and everything collapsed.
If we believe, that trust and confidence will return, it will. WE have the power to change our ''course'' AND a new President willing to do so.
Before you just blow this off, here''s a thought.
Obama said during the election, "if WE tuned our cars and filled the tires WE could save a lot of gas."
McCain handed out tire pressure gauges and called them, "Obama''s Energy Policy".
Well WE got the last laugh...We filled our tires and used less gas, demand went down, the price went down. We believed it would work and it did.
OPEC will cut production soon. Through the old politics of fear, they''ll try to create a shortage and cause ''panic'' buying. Thus demand goes up, along with the price. If we just stay cool and only buy the gas we need, there will still be plenty. Opec is ONLY cutting the surplus. Use less-pay less. TRUST and CONFIDENCE-IT WORKS because its contagious!
Posted by vanfer at 05:58 PM : Dec 16, 2008" err one of obamas biggest supporters and advisors is a little old stock picker from omaha ,, and his other buddy you know the one that started that little software co. microsoft .you know the two wealthiest men in the world .. waren buffet and bill gates , so for you to act like because a man is a progressive he doesnt know how to work money is ludicrous. Give us your oh so "special " advice when you attain their status .
It is not really possible for your loan to jump from $800 to $1,500 overnight like article makes it seem. Everyone should be protected by a cap on the increases.
Plus, if people are smart, they''ll call their loan companies and ask for an extension on the low option ARM rate. Almost all loan companies are granting extensions right now because they are afraid of people defaulting. They would much rather have consistent low payments than no payments at all.
What IS going to send our economy into a deeper tail spin is simpleton members of the media getting Americans worried and worked up over things that our economy should be able to handle no problem. The media should start reporting positive stories so Americans get comfortable again, start investing and I stop loosing money on my 401k.
Google: Reuters Ground Zero Mortgage Fraud
Best of luck- Doug DeWitt
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