"What is mysterious, what is mysterious about the phrase 'variable rate'?"—George Will, This Week, March 30, 2008Mystery is in the eyes of the borrower–and the MSM. The term "variable rate" in a mortgage might seem straightforward enough to George Will and our erudite NB readers, but to a college-educated homeowner–and ABC's Kate Snow–it's apparently a real brain twister.
Snow hosted a segment on this morning's GMA dedicated to determining how the various presidential candidates' proposals would address the problems of sub-prime borrowers. As is the MSM's wont, ABC focused on a single sympathetic case, that of the Cruz-Rivera family in Philly.
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The essence of the Cruz-Rivera's problem is that their monthly mortgage payment, is much higher than she was counting on when the couple took out the loan. The possibility that her mortgage payment might rise apparently came as a nasty surprise to Mrs. Cruz-Rivera. But why? Check out this exchange between the homeowner and Snow.
SNOW: They thought they were signing up for a 30-year, 7% fixed mortgage, paying $920 a month. And you could afford that?
YAJAIRA CRUZ-RIVERA: No problem.
SNOW: But what they got was a rate that was actually much higher, and went higher still, and they felt duped.
CRUZ-RIVERA: That next rate hike was 11.25%, and a new mortgage payment of $1,671 a month.A sympathetic Snow . . .
SNOW: So now you're about double what you thought your original mortgage payment was going to be.Later in the segment, it was mentioned that Mrs. Cruz-Rivera is college-educated. Just how were the borrowers "duped"? ABC didn't try to explain how someone could have thought that a variable-rate mortgage was a fixed one. Was there misleading language in the loan agreement, some improperly small print? Snow never said. Hard not to conclude ABC didn't want anything to get in the way of a sympathetic story line.
—Mark Finkelstein is a NewsBusters contributing editor and host of Right Angle. Contact him at mark@gunhill.net.
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I'd say the only one who was
April 21, 2008 - 09:08 ET by Free ThinkerI'd say the only one who was duped is Kate Snow.
"SNOW: But what they got was
April 21, 2008 - 09:09 ET by Killgrave"SNOW: But what they got was a rate that was actually much higher, and went higher still, and they felt duped."
Okay, so instead of a 7% fixed loan, they instead signed the paper that had a HIGHER rate, and was an ARM on top of it. I don't even know where to begin with this story.
And how the hell does going to college make someone "smarter" and less likely to be duped? Anyone who spent 10 minutes in a typical college know that intelligence has very little to do with it. Most kids are there because they are lucky enough to have the time and resources to do it. And a lot of them are morons, hence the reason why leftism is so prevalent.
Uh-oh: so now I'm the
April 21, 2008 - 09:13 ET by Mark FinkelsteinUh-oh: so now I'm the elitist. There goes my Pennsylvania primary win.
Yes, I'd agree that common sense has nothing to do with college education. But I think it is relevant that Mrs. Cruz-Rivera is an educated person and not, for example, someone perhaps unfamiliar with the English language.
Yes, I'd agree that common
April 21, 2008 - 09:24 ET by motherbeltYes, I'd agree that common sense has nothing to do with college education.
Yes, that's true, but one would assume that a college-educated woman knows the definition of "variable" and that it's not a synonym for "fixed."
You don't often hear the phrase...
April 21, 2008 - 11:00 ET by WhoIsJohnGalt"I flunked out of college", do you?
Although a former member of the Triple Nine Society, I cannot for the life of me, figure out how a college graduate was "duped" by the term "variable".
In the words of the immortal Dilbert: "Intelligence has much less practical application than you would think."
I'm guessing this "duped"
April 21, 2008 - 11:58 ET by KillgraveI'm guessing this "duped" chick thinks that synonym is something she puts on her french toast.
And it's the government's fault when she runs out of synonym and has to resort to maple syrup.
Mmm, I love synonym racing
April 21, 2008 - 14:07 ET by Hero SquadMmm, I love synonym racing beagles.
*****
"People only insist that a debate stop when they are afraid of what might be learned if it continues." - George Will
This is an indictment on our educational system
April 21, 2008 - 13:26 ET by tateofpaThis is an indictment
on our educational system over all, not just college but also k-12. This is not moon shot calculations that these
people are being ask to do as such my son in eleventh grade can tell you the difference
between fixed and variable rate an understands what can and will happens to a
variable rate.
Well
April 21, 2008 - 21:02 ET by well99"Yes, I'd agree that common sense has nothing to do with college education."
Just a few notes on that.That could explain why congress cant build a fence.Why morgage lenders gave out all those loans..with them it was probably greed probably got the best of them.Why Global Warming is so popular with elitist ...college kids.Why the media is so pathetic.All those folks with degrees and they dont have the common sense God gave a rock.I hear the msm and some here talk about the unedumacated.They need to get a clue.It was them folks with diegries that cost us for the Saving and Loan bailout and are doing the same with the subprime morgage mess.
Poor Reporting
April 21, 2008 - 09:14 ET by River CityI have asked this question before when we have stories posted regarding the home mortgage debacle: where is her attorney?
I am not an attorney but I do know I am not savvy enough to understand real estate mortgage contracts. When you are going to sign on the dotted line for the most expensive thing you will every buy wouldn't you want an attorney to review it? I have also mentioned that in all of the states I have bought homes (to live in, not speculation) an attorney was required. Shoddy reporting at its worst.
Who's responsible? Well it sure isn't me sister. Don't use my money (taxes) to pay for your mistake. Pay for your own attorney. If you are going to spend that much money on a house spend a couple hundred on a lawyer to CYA.
"We are going to take things away from you on behalf of the common good." Hillary Clinton, 6-28-04 San Francisco
Stirring up emotion
April 21, 2008 - 09:59 ET by KC MulvilleYou’re right about the shoddy reporting. There was no attempt to explain the situation, or outline any options for how an intelligent person could respond. Instead, this was simply an overt attempt to leave the viewer sympathetic to this “victim,” and stir viewers to anger against a vague, hazy, impersonal enemy.
I wish I could remember
April 21, 2008 - 11:10 ET by motherbeltI wish I could remember where I read it, but it was someone's idea of a very large disclaimer, in plain English, that should be put on mortgages in very large print, that said something like:
This is a legal contract. You are promising to make these payments every month. If you fail to do so, you will lose your home.
Some other things too.
Maybe they should add:
A variable rate means that the interest rate you are paying now on this loan is only the beginning. Depending on the market, this rate could rise considerably. This means that in the future, your monthly mortgage payment could be considerably higher than what you are paying now.
Do not sign this contract if you do not understand it, or if you are not agreeing to, or capable of, making higher payments in the future.
But, I'm sure, someone would still complain about, and the MSM would be only too happy to support a claim of "being duped."
MB: You have an excellent
April 21, 2008 - 12:04 ET by KillgraveMB:
You have an excellent idea. But methinks the banks would be strongly against it.
I'm really on the fence on who irritates me more in this mortgage "crisis". Moron borrowers who refuse to take an ounce of responsibility, or scumbag banks who offer (and even encourage) colossal loans to people who have absolutely no business getting one, with they (the banks) knowing that the government will bail the banks out in the end.
Well
April 21, 2008 - 19:55 ET by timzankI don't know about other states, but here in Indiana the closing agents I know and do business with (I'm a real estate broker) do the standard "truth in lending" disclosure, which is pretty damn easy to understand if you are at least a 7th grader. It says right in the disclosure box VARIABLE or FIXED and everything is always explained. The lady in this clip is either a liar or a moron or both. So is the reporter.
When you are making the
April 21, 2008 - 09:16 ET by Hero SquadWhen you are making the biggest purchase of your life, you really should take a few extra minutes to read the fine print. Or in this case, the big word "variable" at the top of the page.
I guess there's a chance that the mortgage broker did something unethical and duped the homebuyer into a variable rate mortgage. But that's a different issue altogether.
*****
"People only insist that a debate stop when they are afraid of what might be learned if it continues." - George Will
Yeah, They were Duped!
April 21, 2008 - 09:37 ET by Chasvsyes, the loan officer said it was a fixed loan ( despite the document saying otherwise ). Imagine the discussion:
LO: This is a fixed rate loan.
C-R: It says Variable Rate here.
LO: Just ignore that, it's really a fixed rate.
C-R: OK, whatever...
Snow: They were duped! ( Certainly duped by their college! )
Then that's not an error in
April 21, 2008 - 10:10 ET by Hero SquadThen that's not an error in the system; that's an unethical mortgage broker.
*****
"People only insist that a debate stop when they are afraid of what might be learned if it continues." - George Will
Why bankers don't carry guns
April 21, 2008 - 09:19 ET by Mica the MagnificentMortgage co: This is a variable rate mortgage. It can go up or down.
Cruz-Rivera: This is a fixed rate?
Mortgage co: No, it's variable. It can go up or down.
Cruz-Rivera: It can go down?
Mortgage co: Or UP! Down or UP!!
Cruz-Rivera: So it's fixed. yes?
Mortgage co: No! No! It's variable! What part of variable don't you understand??
Cruz-Rivera: The part that can go up. So it's fixed, yes?
Snow: Poor Cruz-Rivera. Duped by a predatory lender.
People are quite capable of
April 21, 2008 - 11:13 ET by motherbeltPeople are quite capable of convincing themselves that what they want to be true, IS true.
Hence, my suggestion above, for the disclaimer in plain English, bold type.
Interest
April 21, 2008 - 09:24 ET by Mulligan22Just another fool trying to play victim. I'd like to see the mortgage papers. If you have a 30 year fixed it will say that. You'll have 360 payments that are equal. If it didn't, then you didn't sign up for that. It's pretty plain. They have to disclose this to you up front. I've never bought a house without knowing terms. Which are plain to see.
Why didn't Ms. Snow ask to see the papers and show us?
You can't fix stupid. But stupid can vote and we all suffer the consequences.
That is so true
April 21, 2008 - 18:38 ET by FastEdmy first mortgage had a printout of what was needed for the first 10 years - then the rest was due - Baloon! I was able to refinance a new 30 year, better rate, lower payments, and again a print out of what was due each month, AND a statement allowing for the added tax, that would be added AND go up every year - the added expenses were the taxes - great to live in a free country. (the taxes are added for free)
There is no sense in being stupid, if you can't prove it! - my dad V
duped
April 21, 2008 - 09:59 ET by jaywlThe same thing happened to me so I can empathize with her. When I bought my last car the dealer told me it was a Cadilac something. I was totally embarassed when a friend of mine, after showing him my new car, told me it was a used buick cleverly disguised to appear as a new CTS. My lawyer says I have grounds to sue because the dealer took advantage of my stupidity, but I would have to display it publicly so I am not sure. What do you guys think?
By the way CNN headline news is saying that 20 Migrants drowned near the Bahamas. Somehow 'Migrants" is both a totally incorrect way to describe people trying to sneak in over the water and, at the same time, belittling to the unfortuate souls that drowned. Flash--- they just now said 19 "bodies" have been found. Maybe someone is looking over their shoulders. Somehow I think they will revert to "migrants".
car
April 21, 2008 - 10:22 ET by Mulligan22If you had run a carfax check you wuold have seen it wasn't a caddy. Plus you need to do your DD's whenever making a purchase of this type. Next time take your friend along.
reply
April 21, 2008 - 10:37 ET by jaywlDo you think that was a true story?
Hey Mulligan22 - Did you
April 21, 2008 - 11:07 ET by MassConservativeHey Mulligan22 - Did you know that the word gullible is not in the dictionary? You should check it out !!
"Obama '08 - He has the Wright stuff...and that is WRONG for America !!
Yep
April 21, 2008 - 11:20 ET by Mulligan22Yep I do. But he asked, "What do you guys think?" I was just trying to be nice.
Buying a house
April 21, 2008 - 10:15 ET by SarahAnnieMy husband and I are buying our first house, and we read EVERYTHING that is put in front of us! I would ask the mortgage broker just about every other time we go in, "Are you SURE this is a fixed rate mortgage?"
Duped indeed...cry me a river.
Nebraskans for War: Peace through Strength
Sounds like a lost opportunity for investigative journalism
April 21, 2008 - 10:22 ET by c5thenI can only imagine that after doing a bit of investigating, ABC decided to go with the tug-the-heart-strings story because they didn't like what they found out. On the surface it sounds like the family was illegaly tricked into a variable rate loan when they thought they were getting a fixed rate. This would be a great piece to do on the "evil mortgage lenders" and I can't imagine they passed that up. I can only assume that they found that the loan was always a variable and that the family were either idiots or could not really understand english well enough to get the whole picture.
The day that "politician" became a career choice is the day we started losing the Republic. Let's get it back! Alan Keyes '08.
Ok, since I'm in the
April 21, 2008 - 10:25 ET by marpelOk, since I'm in the mortgage business, (for a large Bank), I have to say that a lot of mortgage BROKERS will try this with people. I've seen it time and time again. They will tell the borrowers anything they want to hear because, if they close the loan, it will mean thousands to the broker. (I always said I was in the wrong arm of the business).
Nonetheless, the borrower does have the responsibility to read the fine print, and at the closing, the fine print is presented to them again.
I believe that many mortgage brokers duped many people, but it's really up to the borrower to make sure the facts of the loan are understood. As anyone who has received a mortgage before, you receive disclosure after disclosure.
The one thing that I am concerned with were the underwriting guidelines these brokers were presented by the loan companies. At a previous job, I saw MANY loans get approved where the borrower was a resident alien, they grossed, say, $3500 per month, and they were approved for a $125,000 mortgage, with no downpayment and no credit record. This never computed with me, and further more, a resident alien can walk away from a house here in the US, no problem...what do they care? They didn't put any money down, and they never paid any closing costs. It's cases like this that are the true tragedy of the mortgage crisis, but the loan companies asked for it.
Just my thoughts.
Did you notice the register
April 21, 2008 - 11:23 ET by USA4freedomDid you notice the register to vote shirt the poor woman had on?
I wonder who she was voting for??...
I love the line we were going to open up this room for more light.. I think that a 1985 mini van has lots of windows. I think that the government should help you get one of those to live in. Idiot...
(sorry I’m not in a warm and fuzzy mood today)
Ronald Reagan, 1962: I did not leave the Democratic party, the party left me.
Insert: your name, 2008, and the Republican party.
Romney / Jendil 2012 (if,we survive)
USA: good catch on the
April 21, 2008 - 11:54 ET by Mark FinkelsteinUSA: good catch on the shirt--I didn't notice it!
I guess I'm not in a good
April 21, 2008 - 12:25 ET by motherbeltI guess I'm not in a good mood today either, because after I watched the video and actually heard the interviewer making her ridculous claim...all I could think was HOW the H do you THINK you are signing for a 30 year 7% loan when it says Adjustable Rate Mortgage????? They don't LOOK anything alike on paper.
I'm sorry, I just can't figure out how anyone with a pair of working brain cells to knock together can make that mistake.
I saw this segment this morning
April 21, 2008 - 12:24 ET by SanityClauseI saw this segment this morning and had 2 thoughts:
I should be writing for ABC News.
April 21, 2008 - 12:40 ET by Dave in TexasIf this is all it takes to cast somebody as a "victim", I could come up with segments galore for ABC News:
KS: "Hi, I'm Kate Snow. Are gas stations misleading consumers about the price of gas? That appears to be the case with Mr. Victim."
MV: "So I get my receipt for the gas. It turns out I wasn't paying $3.35 a gallon, but $3.359. And there's nothing I can do about it now because the gas is in my car."
KS: "Now on closer inspection, the sign does say that the price is $3.359, but that $0.009 is in very small type that anybody could easily miss."
Hey, I was also duped by a
April 21, 2008 - 14:17 ET by Hero SquadHey, I was also duped by a gas station a few weeks ago. It had a sign up for gas prices, the top number was $2.75 and the bottom was $2.85 (ok, maybe more than a few weeks ago.)
$2.75 for the lowest grade was quite a deal, so I went for it. Punched in my credit card and started pumping. Only then did I notice that I was pumping at the higher price. As I tried to figure out what the heck was going on, I looked at that sign again; the $2.75 was the cash price, and $2.85 for credit. Nice.
Haven't been back to that gas station since. Think I could get someone to do a story about the 60 cents that gas station duped from me?
*****
"People only insist that a debate stop when they are afraid of what might be learned if it continues." - George Will
I used to go to Citco all
April 21, 2008 - 17:44 ET by red_dragon311I used to go to Citco all the time, closest cheapest cute girl working when i would go to work and fill up.
I found out that it is owened by Hugo Cahvez and i stopped.
and i have noticed I get more milage out of my car if I put in only $20 worth at a time.
A government big enough to give you everything you want, is strong enough to take everything you have.
-Thomas Jeffe
Too Funny
April 21, 2008 - 20:31 ET by River City". . . closest cheapest cute girl working . ."
Really?
"We are going to take things away from you on behalf of the common good." Hillary Clinton, 6-28-04 San Francisco
Ouch!!!! Commas help
April 21, 2008 - 21:10 ET by red_dragon311Ouch!!!!
Commas help huh....
A government big enough to give you everything you want, is strong enough to take everything you have.
-Thomas Jefferson
One can be intellegent but...
April 21, 2008 - 13:11 ET by ForeverOnTheRightnot wise. When a person lacks good sense (the ability to make sensible decisions and judgments based on personal knowledge and experience) all the intellegence in the world does them no good. This is the problem, in my opinion, with liberals, they are idealists, and they apply it with their intellegence, but lack good sense.
S Clause thats exactly...
April 21, 2008 - 13:18 ET by connmanwhat I was thinking. They make it sound as if the end is near and they can't do anything about it. Refinance you college educated idiot! Oh yea I loved the husband milling around with the baby in his arms. A little extra effect I'm sure that Brain wiz Snow and her producers came up with. Yea her shirt says Register to Vote, but the fine print says I'll only vote for someone who will get me out of my self inflicted mess! Gosh, I guess I'm not feeling all warm and fuzzy myself today .
This town needs an enema! - The Joker
Read the contract
April 21, 2008 - 14:27 ET by kd5463I read the whole contract on my gym membership and these people couldn't bother to do that with the biggest purchase of their life?
Predatory prescription labels
April 21, 2008 - 21:20 ET by Mica the MagnificentWonder if she's confused by her medication instructions?
"Take 2 pills three times a day with meals"
So, can I take 6 pills once a day? Is a 'day' when the sun is up or is it 24 hours? What's the definition of 'meals?'
Predatory prescription labels?
My question is...
April 22, 2008 - 01:24 ET by gfrrmanhow valid is her degree in ANYTHING? Apparently gov't schooled.... what a fool.
"Eventually, Socialists run out of other peoples' money...." MARGARET THATCHER