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Amy Lynn Smith has an exclusive report with video at Eclectablog of mortgage speciality David Trott promoting subprime mortgages as the meltdown of that market was underway.

Trott is being heavily funded by corporate groups as an alternative to Kerry Bentivolio, the raging tea partier who took the seat in Michigan's 11th District after Thad McCotter's campaign imploded.

Trott is a a foreclosure specialist who is most (in)famous for heading the firm that kicked 101-year old Detroit resident Texana Hollis out of her home when Trott & Trott foreclosed on the home she had lived in for more than 50 years.

Smith uncovered video where Trott had this to say about subprime mortgages:

HOST HENRY BASKIN: David, let me ask you this: Everybody who ever bought a home in the history of our country would say, ‘Hey, this is a great investment. Price always goes up. They never make new land and you can’t lose money on real estate.’ But how does this affect their inability to pay? I don’t understand. Say the home is worth exactly what they paid for it, $250,000. It’s not worth less. It’s still worth $250,000. What’s happened?

DAVID TROTT: Well, if the person bought that house, perhaps on a subprime mortgage product, which I agree with Nina, I think is a perfectly appropriate product and a lot of borrowers are real successful in subprime products so across the board they’re not bad. But if they went to subprime and they based that subprime loan app on overtime with General Motors and General Motors cuts back on the overtime, even though that property is still worth $250,000 they don’t have the wherewithal to make the monthly payments.

Trott made these comments September 7th, 2007, even as other lenders where running away from them. As Smith points out in her piece, despite suggesting that his co-panelist thought subprime mortgages were A-OK, quite the opposite is true.

Smith's commentary:

[C]onsider this: Trott defended subprime mortgages on TV less than a month after the Federal Reserve lowered the interest rate it charges banks. When the Fed took that action on August 17, it was acknowledging for the first time that an extraordinary policy shift was needed to contain the subprime mortgage collapse, according to Bloomberg.
The revelation comes as popular Michigan Democrat Jocelyn Benson, a former candidate for Secretary of State, and at least two other Dems have discussed running for what is increasingly looking like a vulnerable seat for Republicans.

See the video and read the entire piece HERE.

Originally posted to Eclectablog - eclectic blogging for a better tomorrow on Mon Oct 21, 2013 at 09:03 AM PDT.

Also republished by Motor City Kossacks, ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement, State & Local ACTION Group, and Michigan, My Michigan.

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Comment Preferences

  •  Tip Jar (16+ / 0-)

    "Back off, man. I'm a scientist."
    -- Dr. Peter Venkman


    Join me, LOLGOP, Anne Savage, and Amy Lynn Smith at Eclectablog.

    by Eclectablog on Mon Oct 21, 2013 at 09:03:02 AM PDT

  •  Thank you for this! (7+ / 0-)

    I am in Michigan's 3rd district and I just read this morning that we have a good possibility here to get rid of Justin Amash!

    His numbers are way down. People in my area are starting to realize he is one of the worst of the Tea Party.

  •  Oh, please... (3+ / 0-)
    Recommended by:
    peregrine kate, Odysseus, kmt1923

    We need a viable candidate so bad!

    It's embarassing enough to have Bentovolio for my representative, am I going to get stuck with a predatory thief who forecloses on old ladies?

  •  Is the 11th going to replace a major (3+ / 0-)
    Recommended by:
    peregrine kate, Odysseus, kmt1923

    embarrassment with a wealthier major embarrassment?  The worst thing about Bentovolio is that he was once paid to be a teacher.  Wonder what his former students have to say about him.  People remember their teachers, but few remember their mortgage broker unless they suddenly realize that their broker did them dirty just to get a commission fee, then PMI insurance at the time of foreclosure, and then the property back so it can be resold.
    Three layers of profit with actual value destroyed in the process.  What a deal for Trott who now wants to move on to the government bubble?

    Building a better America with activism, cooperation, ingenuity and snacks.

    by judyms9 on Mon Oct 21, 2013 at 10:00:41 AM PDT

    •  He's not a mortgage broker, he's a foreclosure (3+ / 0-)
      Recommended by:
      Eclectablog, Odysseus, kmt1923

      attorney. And I remember him. His firm added $25,000 onto my mortgage, causing me to lose it for sure when I might have been able to save my house.

      That's $25k for a $72,000 mortgage.

      I'd like to start a new meme: "No means no" is a misnomer. It should be "Only 'Yes' means yes." Just because someone doesn't say "No" doesn't mean they've given consent. If she didn't say "Yes", there is no consent.

      by second gen on Mon Oct 21, 2013 at 10:44:33 AM PDT

      [ Parent ]

  •  Too weedy (0+ / 0-)

    Not clear enough, not punchy enough for 99% of the voters.

  •  People who don't bank the overtime are morons. (1+ / 0-)
    Recommended by:
    kmt1923

    Having worked in industry for most of my working life I must say this about these subprimes. People who don't bank their overtime and pretend that it is stable are morons. Overtime has always gone up and down. It is not to be depended upon as wages, it is like a bonus. I never lived extravagantly because my personal strategy was to live on four days pay so that I wasn't in a bind  if we got cut back when orders slowed down. On the other hand, the guys who take advantage of this are not morons, they are just plain fucking evil and should be wiped from the gene pool.

    •  Elements in Mortgage Meltdown (0+ / 0-)

      Dr. William Black testified about defaulting mortgages - interesting data & based on reviews of defaulted mortgages - subprime.  Licensed real estate agents colluding w/ brokers to own multiple houses as primary residences.  They defaulted immediately when things went south.  Then you had licensed brokers putting people - frequently older & inexperienced into subprime when the qualified for prime, same class of broker doing ninja loans or falsifying information.  About half of the defaulting loans fell into this category - fraud on fraud.  Once past this you got people who did not spot the balloon payments or lost their jobs when the economy crashed.

      The regulator of these predators was the now defunct Office if thrift Supervision who declined to use information from FBI fraud investigations + similar investigations by several states' attorneys general to stop the fraud operations.  Go figure - Bush appointee.

      Big firms bought & securitized these loans were able to get AAA ratings because they bought the ratings, sold everything quickly to their clients.  Smart firms like G-S bought naked CDSs from AIG on bad securities they had sold.

      Everyone buying naked CDSs betting against these securities had done the analysis & investigation that ratings agencies should have done but did not do.  Infact, the ratings agencies  modified their anslytical models to assume prices would rise based on how  much they were rising - completely wrong.  But, that way they got answers their paying customers wanted and grew their revenues.

      Layer of dishonesty upon layer of dishonesty - not nearly enough prosecution.  Look at M Lewis's "The Big Short" and also "The House of Cards".

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