Media Still Clueless About Mortgage Products

Today Neil Cavuto interviewed the president of Toll Brothers, Robert Toll.  Earlier today Cavuto had also interviewed President Bush.  The topic of a government bailout of the mortgage industry came up in the interview with President Bush.  So, after airing the taped Bush interview, Cavuto began his interview live with Robert Toll.  Cavuto asked Toll if his company had any problems with its clients utilizing 100% mortgages and later having financial problems.  Toll answered by saying no, and elaborated that he had just learned that their customers that obtained no documentation loans had the highest scores of all their buyers.  Mr. Toll, A 100% mortgage is not a "no doc" loan.  A "no doc" loan allows borrowers with very high credit scores and substantial down payments to avoid proving their income and assets to obtain a mortgage approval.  This has nothing to do with 100% financing.  Cavuto had no follow up question and accepted Toll's answer.  So, we have the host of one of the nation's most viewed financial shows and the president of one of the nation's largest builders, both unaware of the difference between a "no doc" mortgage and a 100% mortgage.  Yet, these are the people that continue to provide us with commentary on the state of the mortgage markets.  On the issue of this whole line of questioning, I am getting very tired of the media trying to portray all mortgage companies as predators.  We live in a free country and people have the opportunity to make bad financial decisions.  I am sure there are some small percentage of cases where people were defrauded, but I can not find not fault with a mortgage company for providing a loan to an individual when all of the terms of the financing were fully disclosed. The lesson here is simple; there are a lot of very uninformed people giving out completely erroneous mortgage advice on TV.  That's how I see it, agree or disagree click on comments below. 

My main website is www.christianmoney.com

James L. Paris

Comments

[cooljulie]

Even I don't understand much about mortgages. I just don't know, maybe I got bored during the discussion or just clueless. Thanks for the post, by the way. Now I know I must listen to the broker or whoever before signing and read it all over again, ask questions and research. It's my money that's at stake, after all.

[KGoodman]

James -

I have found that almost no one reads their contract or understands the terms of their mortgage. They just listen to the overview of each page given by the closer and then "sign here, initial here" etc. Then they are surprised when their interest rate goes up or their escrow payment increases. If only people would read and understand before they sign!