Donald Trump Rushes To Tackle The Foreclosure Crisis

September 8th, 2008 | Tags: Foreclosure Crisis

Donald Trump rushes to the rescue of foreclosure victims – not just one victim but he is lending a helping hand to thousands.

The hero of foreclosures, Trump, initially stepped in to successfully bail out Ed McMohan from the clutches of foreclosure. Nothing is impossible for him. Trump is a giant figure in the world of real estate, a television personality of repute and he even once thought of making it to the White House but the race was not quite up to his standards. Today he seems to have found his ultimate role with fantastic plans to ward off foreclosure by the thousands.

He kicked off his operation foreclosure by buying up the mansion of Ed McMohan on Beverly Hills. McMohan was facing foreclosure after having defaulted on a loan of $4.8 million. Trump was determined not to let Countrywide take the house. After buying it he decided to lease it to McMohan – a television hero of his. The original asking price of the house of $7 million was cut down to $4.6 million. Trump had never let a night pass at his Wharton School without watching McMohan. He could not dream of allowing his idol to suffer. Personally they had not met hitherto. A neck injury had incapacitated McMohan for nearly a year and a half and got into a financial mess. However he admitted of being careless about his one time hefty income that ultimately led to this foreclosure mess. He had purchased the house in 1990 for $2.6 million but ended up with a debt of $4.8 million on it.

Trump plans to repeat this action thousand times over and tide over the foreclosure menace for many. This poses the question – is it really that simple?

Economist Andrew Tilton of Goldman Sach opines that although the real estate market is beginning to show signs of revival, the flood of foreclosures has not been plugged as yet. According to Mortgage Banker’s Association the foreclosure situation saw a rapid decline during the first quarter. The second quarter is apprehended to be even worse with an increase in delinquencies. The irony is that now the prime loans are taking over centre stage in mortgage payment failures. The ogre of the second half of the year is looming large when a huge chunk of the loans are going to post increased rates. The average monthly payment will rocket up sky high.