Photo of Bill Moyers Bill Moyers Journal
Bill Moyers Journal
Bill Moyers Journal
Watch & Listen The Blog Archive Transcripts Buy DVDs
Gretchen Morgenson, photo by Robin Holland
Watch Video
Read Transcript
June 29, 2007

With U.S. mortgages entering foreclosure at a record pace, the crisis has far reaching implications, from the financial markets to the financial health of ordinary Americans. For the latest, Bill Moyers interviews assistant business and financial editor at THE NEW YORK TIMES Gretchen Morgenson, who has been covering the story.

Gretchen Morgenson is assistant business and financial editor and a columnist at the NEW YORK TIMES. She has covered the world financial markets for the Times since May 1998 and won the Pulitzer Prize in 2002 for her "trenchant and incisive" coverage of Wall Street.

Ms. Morgenson joined The TIMES as assistant business and financial editor in May 1998. Previously, she was assistant managing editor at FORBES magazine since rejoining the magazine in March 1996. Before that, she was the press secretary for the Forbes for President campaign from September 1995 to March 1996.

From August 1993 to August 1995, Ms. Morgenson was the executive editor at WORTH magazine. As the number two editor, she oversaw all financial coverage. She also wrote an investigative "Full Disclosure" column monthly.

From November 1986 to August 1993, she was an investigative business writer and editor at FORBES magazine. She broke the story of anti-investor practices on the Nasdaq stock market that was followed by Justice Department and SEC investigations. Earlier, she oversaw several FORBES investing sections and their Washington bureau. From January 1984 to November 1986, she was a staff writer at MONEY magazine.

Ms. Morgenson was a stockbroker for Dean Witter Reynolds in New York from September 1981 to January 1984. She began her career at VOGUE magazine as an assistant editor in August 1976. By the time she left the magazine in July 1981, she was a writer and financial columnist She is the author of FORBES GREAT MINDS OF BUSINESS, and co-author of THE WOMAN'S GUIDE TO THE STOCK MARKET.

References and Reading:
More on mortgages and Bear Stearns

Foreclosures in 2007 are twice what they were two years ago at this time and some analysts lay the blame on new mortgage products introduced in the past few years. The mortgage industry has been loosening their standards in a variety of ways reducing minimum credit scores; allowing borrowers to finance more of a home's value; permitting borrowers to carry a higher debt load. They have also introduced new loan products:
  • Interest-only mortgages: These allow borrowers to pay interest and no principal in the loan's early years, which keeps payments low for a time.
  • Option adjustable-mortgages: These loans carry introductory rates of as low as 1% and give borrowers multiple payment choices. But borrowers who elect the minimum payment can see their loan balance rise.
  • Piggyback loans: These combine a mortgage with a home-equity loan or line of credit, allowing borrowers to finance more than 80% of the home's value without paying for private mortgage insurance.
  • No-documentation and low-documentation loans: Under these programs, borrowers can take out a loan while providing little if any documentation of their income or assets. (Source: THE WALL STREET JOURNAL)
The industry has also changed in that mortgages are now part of an investment cycle. As Morgenson says "Wall Street has come up with this wonderful system of packaging mortgages into big, huge pools of thousands of mortgages. Slicing them up, cutting them up, and selling them to investors. I've talked to lawyers who are trying to help people out who are in foreclosure who can't even identify who owns the loan."

This practice has led to the most visible sign of a mortgage melt-down — the losses suffered by two Bear Sterns hedge funds that had invested heavily in the subprime mortgage market.

"A Stock Filing Gone Awry for Bear Stearns" Gretchen Morgenson, THE NEW YORK TIMES, June 26, 2007

"Housing and Hedge Funds," NEW YORK TIMES editorial, June 28, 2007

"Mortgage Default Rate Up to Wall Street?" Alan Zibel, FORBES, June 12, 2007

"SEC Examines Bear Stearns' Troubles" The Associated Press, June 27, 2007

"US bank bails out mortgage fund," BBC News, June 22, 2007

Additional Resources

Center for Responsible Lending
Consumer Federation of America
Fannie Mae
Freddie Mac
Ginnie Mae
Harvard Joint Center for Housing Studies
Mortgage Bankers Association
National Association of Mortgage Brokers
Office of Federal Housing Enterprise Oversight
National Association of Realtors

Photo by Robin Holland

Published June 29, 2007

Also This Week:

Lori Wallach, Director of Public Citizen's Global Trade Watch, on the secret trade deal negotiated by leaders of the Democratic Party and its implications for labor unions, consumer groups and the environment.

Deputy Press Secretary to Barry Goldwater during the 1964 campaign, Victor Gold discusses where he believes the Republican Party has gone astray in the last twenty years.
>More on the battle for the GOP

Financial columnist Gretchen Morgenson on the SEC, the mortgage crisis and other matters fiscal.

A Bill Moyers essay on what the potential buyout of Dow Jones and THE WALL STREET JOURNAL meanS for business coverage?
WATCH last week's show
EXPLORE the archive
Our posts and your comments
For Educators    About the Series    Bill Moyers on PBS   

© Public Affairs Television 2008    Privacy Policy    DVD/VHS    Terms of Use    FAQ