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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? worldsavings

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.

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Written By

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 New York Times, The Wall Street Journal and other media outlets. Fred is the CEO of U S Spaces, Inc/Arrivva (a real estate brokerage firm in PA, NJ, DE and CA) and U S Loans Mortgage Inc (mortgage brokerage in PA, CA, FL and VA), and serves on the Board of Directors and is the Federal Legislative Director for the UpFront Mortgage Brokers. Fred is also the co-creator of real estate startup, a mathematically driven rental search engine. See everything Fred at



  1. Mike

    January 5, 2010 at 5:57 pm

    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.

  2. aMY L cavENDER

    January 5, 2010 at 7:43 pm

    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.

  3. Brad Officer - Jacksonville Real Estate

    January 5, 2010 at 11:06 pm

    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?

  4. joshuakeenrsb

    January 6, 2010 at 4:11 am

    @agentgenius Negative Amortization to the Rescue- Fred Glick on CNBC

  5. BawldGuy

    January 6, 2010 at 2:24 pm

    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?

  6. Fred Glick

    January 7, 2010 at 7:37 am

    @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!

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