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?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.
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.
[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.