Senator Chuck Shummer held a press conference several months ago and talked about reading a Countrywide rate sheet. He found the "option arm" had many different rates, margins (profit margins) and prepayment penalties. He said the higher the margin the longer the prepayment penalty and the more the loan officer made which seemed wrong, and decided mortgage brokers were the problem. (Who's rate sheet was that?) A few months later he failed to call a press conference to mention that he had leaked confidential information to the press that caused a run on IndyMac Bank which contributed greatly to IndyMac's demise. Consumer advocates have castigated lenders in the mortgage industry for producing "liar loans" which are stated income loans for wage earners but failed to find any fault in the liars who filled out the loan applications and got the loans. The news media identified the entire credit crisis as "the sub prime crisis" without knowing what a sub prime loan was or wasn't, who offered them and who didn't and whether anyone actually was helped by the loan and/or paid any sub prime loan back. The government bailed out Fannie Mae and Freddie Mac because of all the bad loans they had made (not true) but skipped the fact that Freddie and Fannie's loss came on Wall Street when they bought derivatives backed by other lenders non- performing loans. Which gets us to Wall Street who loved all of the action created by the housing boom and the mortgage lending explosion until it turned against them and then identified the problem as the "mark to market" which came with Sarbanes Oxley and the short selling of their companies. I didn't hear them complain to Congress or the Administration about these things nor did I hear anything about the changing of the short selling "uptick rule"until their ox got gored by the change. And the beat goes on!
Roger Schlesinger's Mortgage Minute is heard on hundreds of radio stations and daily on the Hugh Hewitt radio show and Michael Medved shows. Roger interacts with his hosts and explores the complicated financial markets in order to enlighten his listeners and direct them along their own unique road to financial freedom.
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