Negative Amortization to the Rescue- Fred Glick on CNBC
Believe it or not, our old friend that caused evil mortgage people to get temporarily rich, fooled many into the American Dream and if done properly actually help some people is on of the solutions to the mortgage crisis!
How you ask? 
Well, here I am today on CNBC at 4:40PM ET on the Closing Bell.
Watch it, let me know what you think and then I will put up a post with everyone’s ideas.
Start spreading the news...
This article published on Tuesday, January 5th, 2010 at 11:13 am | Contact the editor
Topics: Economy
About this Columnist (Full Profile)
Realty Reality! That describes Fred, a sharp witted and outspoken realist for the mortgage and real estate world who has appeared on CNBC and NPR’s Marketplace along with being quoted in the Philadelphia Inquirer and other media outlets.
Fred is the owner of U S Spaces, Inc (a real estate brokerage firm in PA and CA) and U S Loans Mortgage LLC (mortgage brokerage in PA, CA, CO, FL and VA).
Fred serves on the Board of Directors for the National Association of Independent Housing Professionals and the UpFront Mortgage Brokers, both consumer oriented organizations that help to make the industries better.
Stand by and enjoy his brain-to-finger translation of thoughts surrounding what we do or what we can do for our clients and learn how the real estate/mortgage world really works.
Email Fred Glick
The Daily Hot Sheet
The AGBeat Daily is jam packed with today's news headlines, fresh and neat in your inbox- start the day ahead of the curve.
Comments (17)
Trackback URL | Comments RSS Feed
Social Shares & Links Back
- Fred Glick:
@agentgenius Negative Amortization to the Rescue http://bit.ly/6r1geL
- AgentGenius:
#agnow Nice job Fred. I'm a CNBC junkie and my general beef with them is that they have 4 or 5 guests talking over … http://bit.ly/6Kj8vC
- AgentGenius:
RT @123fredglick: @agentgenius Negative Amortization to the Rescue http://bit.ly/6r1geL
- AgentGenius:
Come see AG's Fred Glick on CNBC and weigh in – http://bit.ly/6r1geL
- AgentGenius:
agentgenius.com NEW Negative Amortization to the Rescue- Fred Glick on CNBC http://bit.ly/931g02
- PopREblogs.com:
Negative Amortization to the Rescue- Fred Glick on CNBC: Believe it or not, our old friend that caused evil mortgag… http://bit.ly/931g02
- AgentGenius:
#agnow Great interview Fred. I wish we could take the last 5 years back and start over. Buyer's were greedy, lend… http://bit.ly/6Kj8vC
- AgentGenius:
RT @joshuakeenrsb: @agentgenius Negative Amortization to the Rescue- Fred Glick on CNBC http://bit.ly/5wFSra
- AgentGenius:
#agnow Fred — A local homeowner here in San Diego had a neg-am loan. He received an unsolicited offer from the len… http://bit.ly/5zsSf4
- AgentGenius:
#agnow @All…there is no one real solution but generically, the lowering of inventory, the creation of jobs and if… http://bit.ly/5zsSf4
- Top 10 real estate posts of the day for 1/6/2009:
[...] Negative Amortization to the Rescue- Fred Glick on CNBC – This is a great discussion on what to do about healing the housing system as soon as [...]
Benn Rosales
Conal Campbell
Elijah May
Lani Rosales
Tara Steele
Marti Trewe
Charlene Jimenez
Nice job Fred. I’m a CNBC junkie and my general beef with them is that they have 4 or 5 guests talking over each other. I like this format better.
Getting to the matter at hand. I’ve been saying that the modification plan was never going to work since the get go. Unless you reduce principle, the reduction won’t be enough. All that Hamp has done is delay the inevitable.I am completely against a mandated principle reduction, (voluntary, case by case is fine) because there are too many buyers who didn’t over reach, yet are still upside down, yet paying the mortgage in full and on time. It’s bad enough that they can’t get a mod, but now the neighbor is going to get a mod AND a reduction in principle? There would be national outrage. I don’t see Neg Am working out too well either.
As far as inventory, here in Northern Virginia, and as an example, Loudoun County, we have roughly 1050 active listings, when in November 2007, it was at 3300. Most buyers can’t find a property. If there is an REO back log, it’s be a great time to start rolling them out.
The next big issue will be the rising rates due to the gov’t discontinue the MBS buying at the end of march.
Great interview Fred. I wish we could take the last 5 years back and start over. Buyer’s were greedy, lenders were greedy. I’d have Realtors tell me that if I didn’t do the 80/20 Interest only, no doc loan without checking credit, someone else would. I did one of those and that house was lost to foreclosure. I have other clients that are upside down – because their loan was not sold to FNMA/FHLMC, they are not eligible for the DU refi plus. They want to stay in their home, are ok owing more on it than it’s worth but are struggling. Too sad that there are so many more stories.
I don’t think there is one solution. Each case, borrower, city, state, house is different. Kind of like those people who pay their credit cards on time may now have to pay a higher rate because of the billions of dollars of losses by those not paying. Or those who have healthcare have to pay higher because of those without health care. I have been on both sides of this argument and it comes down to life just isn’t fair.
The system is working it’s just bogged down. Home owners have options: Loan mod, short sale, deed in lieu, foreclosure. Creating another “program” would just continue to overload the system.
Besides, didn’t congress just vote down the “mortgage slam down” that would allow judges to force the principle balance down in Bankruptcy cases?
@agentgenius Negative Amortization to the Rescue- Fred Glick on CNBC http://bit.ly/5wFSra
Fred — A local homeowner here in San Diego had a neg-am loan. He received an unsolicited offer from the lender to A) Stop the neg-am part of the loan. B) lower the interest to 2.5% with interest only payments for two years. C) Interest rose each year for three years after, capping at 5% beginning the sixth year with a 30 year ammo.
He couldn’t sign the offer quickly enough.
His payment was substantially reduced without principal reduction. The investor’s capital is now at less risk, while all involved averted foreclosure. Frankly, I see a win/win/win scenario here — without principal reduction.
Your thoughts?
@All…there is no one real solution but generically, the lowering of inventory, the creation of jobs and if people can deal with realities of the market and the world, it can all right itself.
If I had a couple more minutes on the air, i would have called for a consolidation of towns and have the Air Force practice blowing stuff up by striking unsold developments!
This would help both the housing market and national security at the same time!