Signe

Media Coverage of the Mortgage Crisis

Don't know if I'm adding anything by commenting here.... but the story on last Sunday's 60 Minutes is a perfect illustration of the media's neglect to fully discuss the current market decline issues. Two borrowers purchases a home with a hybrid mortgage. The rate has changed and although the borrowers can afford to make their new payments, they informed the anchor that they do not intend to. All the advise they have been receiving is to "walk away" as it is stupid to waste money on a depreciating asset. The 60 minute report simply leaves it at that, failing to mention that there are serious consequences to defaulting on a mortgage. The borrowers won't be able to get another mortgage for over ten years, much less pass a credit review process to move into a rental property, this is in addition to the cost of moving. Had I not known better, my "take away" from the 60 minutes segment would be to "walk away" just like the couple interviewed. Why not? When there is apparently no downside.... according to 60 minutes.
The segment also featured Mr. Grant, publisher of Grant's Rate Observer. Instead of questioning Mr. Grant, the anchor permitted him to pontificate about "free money" being the cause of the "subprime mess". Clearly, Mr. Grant should stick to his bond portfolio and his newsletters. This money may have been easily available -but it was certainly not free. In fact, subprime rates were as high as five percentage points higher than prime rates .....
Is the press so biased on other matters...... am I simply noticing the irresponsible reporting on the mortgage market because this is my business? Is a free, unbiased press really just an American myth?