Tuesday, February 12, 2008

Marketplace Airs Mims Correction

Marketplace aired a correction to Mims' commentary yesterday. Check out their podcast at 22:53 in:

KAI RYSSDAL: On now to an important matter of our own. We aired a commentary last Thursday in which homeowner Kevin Mims talked about facing foreclosure because the collapse of the housing market had cut his family's income. "Foreclosure's all but unavoidable," he said, because he owes more on his house than he could get for it. We left out an important circumstance. Mr. Mims refinanced his house in 2006, and he took cash out. As a result, he owes $100,000 more than his original mortgage was for.
'Nuf said.

5 comments :

anon1137 said...

Good for Marketplace.

I was in the process of writing this comment when you posted the update:

He should have mentioned in the Marketplace story that he took equity out of the house because that's exactly why he's in financial trouble, and financial trouble is the subject of the story. He told a half-truth.

He bought the house for $350K in 2004. He states that it's worth $400K today, so it's still worth more than he paid for it. If he hadn't taken out the equity, he'd be able to sell the house today and wouldn't be facing foreclosure. It was the cash-out that did him in.

Max said...

Of course, no love for Sacrealstats from Marketplace. :) I guess being an anonymous blogger has some drawbacks.

Patient Renter said...

"Of course, no love for Sacrealstats from Marketplace. :)"

Blogging is holy work :)

I guess this puts to bed the idea that the refi was "immaterial" as one commenter put it.

Anonymous said...

Kudos to Marketplace. Nice to see them make that statement.

wrong moves said...

"He states that it's worth $400K today, so it's still worth more than he paid for it."

In my opinion, in a market, an owner doesn't give the worth, it is the buyer. I think that works for anything for sale. That is why we have sales in retail. If stores could always sell at the ticket price, then they would never lower prices. The same concept is at work in todays real estate market. He can wish all he wants that his house will bring 400K, but he may be in for a rude awakening.