Second Wave Of Toxic Mortgages
December 23, 2008 2:03 PM
A second wave of toxic mortgages is expected to hit the economy. 60 Minutes correspondent Scott Pelley previews his upcoming report on the mortgages that could deepen the recession.
Recent Segments
Scroll Left Scroll Right
My parents lived through the Great Depression...and my aunts and uncles warned me about over extension. These folks obviously didnt.
Now they must pay the piper. I paid for my home. Now, no one will help me, because i dont qualify...and im on OPM disability pension...not social security disability...not medicaid or medicare....so...dont expect me to shed too many tears.
An NASE survey,www.nase.org, was the first to provide compelling evidence of small business involvement in the %u201Ctoxic%u201D mortgage crisis. The survey was created by Prof. Samuel D. Bornstein and Jung I. Song, CPA of BornsteinSong Consultants in Oakhurst,NJ,and was conducted by the National Association for the Self-Employed (NASE) which issued a Press Release on November 21, 2008. According to this survey, it is estimated that 3,709,800 small business owners hold Alt-A and other %u201Ctoxic%u201D mortgages, and 1,279,800 are already delinquent as they have missed one to three or more monthly mortgage payments at mid-November, before the expected %u201CResets%u201D that are scheduled to begin in 4th Quarter 2008 through 2012. These small business owners will be at-risk of %u201Cpayment shock%u201D and default as their monthly mortgage payments skyrocket. Small business owners were especially targeted for these Alt-A loans which required little or no documentation of income which appealed to many small business owners who previously were unable to qualify.
The resulting defaults will be the cause of the upcoming second %u201Ctsunami%u201D wave of foreclosures that will dwarf the subprime crisis and will take many homeowners and small business owners.