David Saks: TRAPPED

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663



The trap has sprung.

When the Fed lowered the lending rate it might have signed a death sentence for the economy. For cash-strapped homeowners, they're worst nightmare could happen. They're going to refinance their mortgages at bargain rates again, thanks to the Fed's beneficence, and think that they can cut their payments in half. Low documentation and low downpayment scams are going to resurface their ugly heads for new borrowers. Those who take the bait are in for a nasty surprise. While many Americans have started to worry about falling home prices, borrowers who jumped into so-called option and hybrid ARM loans have another, more urgent problem: payments have and are about to skyrocket, and it's predicted the reset will last through as late as 2011, and onward !

Most of the pain will be borne by ordinary people, not the lenders, brokers, or financiers who created the problem.

The Fed discount, and new borrowing frenzy, could be the coup de grace to America's economy.


David Saks

Time&Temp Memphis

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Comment balloon 4 commentsDavid Saks • March 30 2008 12:01PM


David, interesting perspective, you obvioulsy don't feel that the worst is behind us.  Have you notice different behavior from the lenders you work closely with?  I think they have already tightened up, hopefully the predatory guys are out of the picture.
Posted by Marc Baysek, Iron Horse Properties (Iron Horse Properties, LLC) almost 12 years ago

Thank you, Marc.

Posted by David Saks ((retired)) over 11 years ago

very interesting view point , i allso hope that the predatory are gone or not in business , things are tight her in Cookeville , but not as bad as sept 11, thanks Patt Judd

Posted by Patt M. Judd, Realtor - Your Cookeville Connection (First Realty Company) over 11 years ago

Hello Ms.Mayor Patt,  I'm honored that you would take a moment to comment on my blog. Sadly, we live in a day and age when our country is immersed in economic catastrophe. I don't believe the government attention to the crisis will prove to be enough to ward off massive default over the next few years. Subsequently, more lenders and banks will fail. The banks have less money to loan because of the lifeless market for mortgage backed securities, especially high risk pools of mortgages. Property taxes should be lowered or frozen and property values examined in such manner to create stabilization which will create a cycle of correction for housing. I hope the assessor in Memphis will take this position. Loan documentation must be thorough to insure confidence, and legislation such as HR-3915 must be in place to monitor it's integrity. No one has been able to accurately predict how it will turn out. But I'm predicting recovery is seven years or so, 2015. About the same amount of time it takes one to recover from bankruptcy, but in this case, on a national scale. Hopefully, many new reforms will be in place creating new levels of confidence for all of us. Thank you so much for your comment, Patt, and I sincerely hope for the greatest days ahead for you.

Posted by David Saks ((retired)) over 11 years ago

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