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A Second Mortgage Disaster? 60 Minutes Video

In many ways this video is a "review" rather than "news" but I found it informative, albeit, a bit ominous.

Although the words, "Foreclosure," "sub-prime," "recession," and "mortgage fall out" are the buzz words of today, I can't help but wonder...

Will we learn from this catastrophy, or are we destined to repeat these same mistakes borne from greed and illusion?

60 Minutes Video 12/14/08

Views: 2

Tags: foreclosure, lending, loans, market, mortgage

Comment by Shari Chase on December 16, 2008 at 3:55pm
We've heard it all before but the reality is staggering. That said, pain on one side is GAIN on the other side. Subprime loans were just the beginning. Alt-A and option ARM loans were considered higher quality loans. Now they are beginning to mature and their reset dates are coming up. An option ARM loan which started out with a low initial interest rate might take an $800 a month payment to over $1,500 a month. Scott Pelley of 60 Minutes asked Whitney Tilson, an investment fund manager, how many of these option ARM loans he imagines are going to fail, Tilson said, “Well north of 50 percent. My gut would be 70 percent of these option ARMs will default.” And, many of them already have. How can we help homeonwers in distress? Interest rate bonuses may be a start. But all said and done, the key word is "opportunity' for buyers and "integrity" for all.
Comment by Susanna Gascoine on December 16, 2008 at 4:07pm
As Shari Chase comments, there are two sides to every story. In the Excelerator course for agents I attended last year we were shown that, though a seller may be anxious about lowering his asking price, this seller more than likely is also a future buyer and will be in a position to take advantage of purchasing a home in a neighborhood that previously was above that sellers' price range.

That being said, I think is it imperative that we as a nation look for the solution to this current situation, without putting too many people "out on the street." We've identified the problem, now let's work to create a win-win for all concerned!

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