Posted by: Chris Palmeri on September 14, 2007
Former Federal Reserve Chief Alan Greenspan has told 60 Minutes that he “didn’t really get” that the huge surge in subprime lending was significant enough to hurt the economy until very late in 2005, according to the news service Levine Breaking News.
Greenspan told corresponent Leslie Stahl he knew that homebuyers were getting loans with ultra-low adjustable interest rates that would rise quickly soon after, but he didn’t think they’d blow up to the degree they ultimately did. “While I was aware a lot of these practices were going on, I had no notion of how significant they had become until very late,” he said. “I really didn’t get it until very late in 2005 and 2006.” The appearance, airing on CBS on Sunday, Sept. 16 is Greenspan’s first major interview. He’s out promoting a book, of course. His “The Age of Turbulence” is to be published the next day.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.