In a recent blog post by CBS Evening News correspondent Cynthia Bowers we find that she has had some problems with the housing market herself. Bowers apparently didn’t grasp the fact that her Adjustable Rate Mortgage (ARM) can actually adjust:
“For a while we were okay. Then that Fed rate started going up, and so did our ARM. Over a five-month period it increased the cost of our monthly mortgage by nearly 40%!” Bowers wrote.
But Bowers shouldn’t have been surprised about her rate adjustment. According to Nexis, Cynthia Bowers has been reporting on the mortgage and housing market since at least 1997. With a decade of industry reporting under her belt, you’d think she’d be able to anticipate the fact that rates shift and payments adjust.
In Bowers’ latest report for the August 16 “CBS Evening News,” she examined two different cases of people being hurt by the recent “mortgage meltdown.” The first family she mentioned bought their house with an ARM, yet they were flummoxed to find out that the rate was, you guessed it, going up!
“He bought his suburban Chicago home fifteen months ago using an adjustable rate mortgage. Since then he’s seen it skyrocket four points and his monthly payment go up by almost $700 a month, and it could go higher,” Bowers said in the broadcast.
Bowers reporting on this issue brings three words to mind: conflict of interest. Maybe someone who just got pinched by an ARM shouldn’t be reporting on people in the same situation? Just a thought – it might shift the bias toward the homeowners?
Yes, it is unfortunate for the family, but it seems as though they’re angry their mortgage did exactly what it could do, adjust. Nowhere does it say that mortgages can only adjust when the rate drops.
The second family Bowers covered in her broadcast had the same thing happen to them as they were about to close. The rate adjusted upward. However, according to Bowers:
“They got lucky. The developer eager to make a sale dropped the price, making it possible for them to get into their dream home.”
Maybe that should have been the story. A developer lowered his price so a family could have its “dream home.” But don’t hold your breath for such pro-business reporting.
As for Bowers, maybe she could ask Katie Couric for a loan.
- Stuart James is a Research Analyst at the Business and Media Institute.