The 2006 drafted act requires the use of a Federal program (SAVE) to administer public benefits using a verification system. However, not all Georgia agencies that administer public benefits use the system.
Currently, only Georgia public employers and their contractors "are required" to use the Federal E-Verify system (verification of legal immigration status). Georgia House Bill HB1259 (Georgia Employer and Worker Protection Act) proposed in 2010 requires all employers to use the Federal E-Verify system to obtain or renew a business license.
Why am I writing this in a real estate blog - simple!
Jobs for Americans and legal immigrants can help strengthen our country and our real estate markets.
Does your State Representative and Senator support both SB529 and HB1259?
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Wednesday, December 29, 2010
Sunday, December 26, 2010
Mega Bank News
This BLOG post will be updated on an ongoing basis to update you on news about large US banks and their behavior. My guess is ... some of it won't be good behavior!
3-10-2012: Bank of America agrees to cut down to market value and not just down to 120% LTV in Big Bank Settlement. Source: http://www.courant.com/business/hc-bank-of-america-mortgages-deal-20120309,0,5836235.story10-20-2011: Possible plan to settle 50 US States Attorney General lawsuit over foreclosure action of many US banks would allow people underwater (owing more than home is valued) and current on monthly payments to refinance to a lower rate for only those mortgages owned by banks (about 20% of mortgages (which means about 80% are tied up in mortgage backed securities). Source: http://www.mortgagenewsdaily.com/10182011_ag_servicer_settlement.asp
9-3-2011: Federal Housing Finance Agency (FHFA) "IS" (depending on Bill Clinton's definition of IS) suing 17 major US banks over Mortgage Meltdown...Source: http://online.wsj.com/article/SB10001424053111904583204576546940630966016.html?mod=djemalertNEWS
9-2-2011: Big banks are getting sued by Federal Government; over 1 million distressed/forecloed homes coming to a market near you soon; and Bank of America is receiving more attention.
Source: http://ftalphaville.ft.com/blog/2011/09/02/667926/us-government-attempts-bank-raid/
9-2-2011: Federal Reserve asks Bank of America for contingency plans - including bankruptcy? Source: http://www.bizjournals.com/sanjose/news/2011/09/02/fed-asks-bofa-for-contingency-plans.html
7-6-2011: It may not affect just Mega Banks, but the majority of mortgage are used/held by the Mega Banks. About 20% of mortgage portfolios at Mega Banks are delinquent. Source: http://online.wsj.com/article/SB10001424052702303763404576416090501569426.html?mod=googlenews_wsj
6-18-2011: HUD claims Bank of America (BOA) hindered investigations and didn't provide access to BOA personnel or data to investigators in a "timely manner". Source: http://agentgenius.com/real-estate-news-events/bank-of-america-stonewalling-mortgage-probe-says-hud/
3-15-2011: Bank of America plans to write down mortgages on applicable loans by US soldiers on active duty. WSJ, 3-11-2011, C1.
3-11-2011: Bank of America is thinking about closing about 6,000 banking locations due from electronic banking growing in popularity. Source: Bank of America may close some locations
3-8-2011: Just to summarize - J.P. Morgan Chase bought Washington Mutual Bank; Bank of America bought Countrywide Home Loans; and Wells Fargo bought Wachovia.
3-7-2011: Wells Fargo is now controlling about 25% of the mortgage loan market and B of A share has fallen to about 20%. (WSJ, 3/5-6/2011) (My personal thoughts - the mortgage market will probably continue to fall due to higher down payment requirements, fewer qualified applicants due to credit issues, and previous bank foreclosures of their real estate.)
3-7-2011: Bank of America is leaving the reverse mortgage market (probably to focus on more profitable loans since we are in a declining value market).(WSJ, 3/5-6, 2011, B15)
1-10-2011: Bank of America is expected to buy back only about $3 Billion of home loans (from Fannie Mae/Freddie Mac) due from their acquisition of Countrywide Mortgage, but some analysts expect private investor lawsuit settlements to range from $8-35 Billion ($6 Billion repurchase requests from private investors and insurers) ...Also, Ally Financial (part of GMAC that the Federal Government owns) agreed to pay Fannie Mae $462 million to cover purchase requests related to mortgages...The relative good news is that some estimates see total losses across the mortgage industry could be limited to $33 Billion. (WSJ, 1-4-2011, C10)
12-31-2010: Bank of America (B OF A) settled with (paying $108 million to) the SEC from charges that Countrywide (who B of A acquired) improperly charged mortgage customers; settled with (paying $150 million to) the SEC due from failing to properly disclose information regarding their acquisition of Merrill Lynch; and settled with (paying $137 million to) the SEC related to steering government municipal bond sales to specific bidding agents. (WSJ 12-8-2010, C8)
12-21-2010: Wells Fargo agreed to provide $2.4 billion in loan modifications to settle claims of a California lawsuit - $33 million to reduce or prevent foreclosures and $32 million in restitution of "pick a Pay" (adjustable rate) loans. Agreements between Wells Fargo and other states are in progress. (WSJ, 12-21-2010, C9)
12-16-2010: (WSJ 12-16-2010, C1) - Bank of America (BOA) is fighting allegations from 17 investors that 167 bond deals were improperly serviced and their subsequent requests to "buy back" those mortgages. Total claims of $12.8 Billion in repurchase of mortgages.
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11-16-2010: Bank of America has already paid $9 billion
11-6: J.P. Morgan Chase plans to proceed with foreclosure filings. It's been reported that Chase has been asked to repurchase $2.92 billion of loans in 2010 and $3 billion in 2009 out of a total requested $8-9 billion in each of these two years. (WSJ)...JPM has also said they converted 29% of the temporary loan modifications into permanent modifications (WSJ 11-6/7-2010).
10-27-2010: Bank of America will focus more on retail mortgages directly to customers (22% of market last year) is exiting wholesaling of mortgage loans - might result in loss of 1,000 jobs. May mean Wells Fargo becomes biggest wholesaler and can pick up the slack..maybe. JP Morgan Chase doesn't plan to purchase loans from mortgage brokers.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Thursday, December 23, 2010
Credit Default Swaps? - Oh boy, here we go again!
Credit Default Swaps (CDS's) (i.e., quasi Insurance Contract) require seller of the CDS's to pay the buyers of them some sort of compensation if the municipality misses an interest payment or restructures the debt...That's a nice way of saying, someone's betting that a municipality is and then isn't going to default...(Almost Harrisburg, PA??)
California is about to require disclosure of all their CDS transactions from several large banks so others can see their exposure and risk.
The total muni CDS market is estimated to be about $50 billion.
Losses are more prone on development bonds and other non traditional debt.
Note: I feel a big pain in my butt developing, but I just can't put a finger on who to call to help ease my pain!
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
California is about to require disclosure of all their CDS transactions from several large banks so others can see their exposure and risk.
The total muni CDS market is estimated to be about $50 billion.
Losses are more prone on development bonds and other non traditional debt.
Note: I feel a big pain in my butt developing, but I just can't put a finger on who to call to help ease my pain!
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Tuesday, December 21, 2010
Build America Bonds (BABs) - Another scheme for more debt
These are federally subsidized bonds for local municipalities to raise money for light rail projects, sports or convention centers, or sometimes hotels...all money losers.
About $174 billion has been issued under the program...California issued about $30 billion. The Federal Government already subsidizes $450 billion in municipal bonds through income tax deductions...Wall Street firms have pocketed about $1 billion in fees.
Municipalities hold about $2.8 trillion of outstanding debt and $3 trillion in unfunded pension and health care liabilities.
Why am I writing about this?
First, municipalities going into debt is terrible - but going into debt to build projects that lose money is criminal.
Second, when will we learn not to go into debt beyond our means?
Third, who is watching this massive debt?
Our economy is more fragile than some would admit and we must not toy with massive long term debt.
Source: WSJ, 12-8-2010, A22
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
About $174 billion has been issued under the program...California issued about $30 billion. The Federal Government already subsidizes $450 billion in municipal bonds through income tax deductions...Wall Street firms have pocketed about $1 billion in fees.
Municipalities hold about $2.8 trillion of outstanding debt and $3 trillion in unfunded pension and health care liabilities.
Why am I writing about this?
First, municipalities going into debt is terrible - but going into debt to build projects that lose money is criminal.
Second, when will we learn not to go into debt beyond our means?
Third, who is watching this massive debt?
Our economy is more fragile than some would admit and we must not toy with massive long term debt.
Source: WSJ, 12-8-2010, A22
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Saturday, December 18, 2010
What's the fate of Mortgage Interest as an Itemized Deduction?
There is discussion in US Congress that the tax deduction for mortgage interest may be eliminated.
Some proposals set a threshold of a certain maximum mortgage amount above which no deductions will be allowed, but also set a declining percentage of the total mortgage interest that is deductible, eventually running to zero, or non of the mortgage interest will be deductible.
The President's Debt Reduction Panel suggested a lifetime cap of 12% of the mortgage on a primary residential property up to $500,000 balance.
No word on whether the second home mortgage interest deduction will change or be eliminated, but don't count on it to remain as it is.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Some proposals set a threshold of a certain maximum mortgage amount above which no deductions will be allowed, but also set a declining percentage of the total mortgage interest that is deductible, eventually running to zero, or non of the mortgage interest will be deductible.
The President's Debt Reduction Panel suggested a lifetime cap of 12% of the mortgage on a primary residential property up to $500,000 balance.
No word on whether the second home mortgage interest deduction will change or be eliminated, but don't count on it to remain as it is.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Wednesday, December 15, 2010
Zillow reports $9 Trillion loss in real estate values since 2006...and it ain't over yet
More sliding of values are expected in 2011...
However, I have been hearing that the bottom would hit around Summer 2011, but I have been hearing that about every past summer for 2 years....So in other words, NOBODY knows!
Source: http://www.thebradentontimes.com/news/2010/12/11/business_and_financial/zillow_puts_total_real_estate_losses_at_9_trillion_bleak_2011_forecast_for_florida_market/
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
However, I have been hearing that the bottom would hit around Summer 2011, but I have been hearing that about every past summer for 2 years....So in other words, NOBODY knows!
Source: http://www.thebradentontimes.com/news/2010/12/11/business_and_financial/zillow_puts_total_real_estate_losses_at_9_trillion_bleak_2011_forecast_for_florida_market/
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Tuesday, December 14, 2010
When can you rent a home before buying another
According to a mortgage broker on Trulia.com, you may only convert an existing home to a rental home if you have at least 30% equity. If you do have 30% equity you will need to provide a fully executed lease and the existing mortgage payment will count toward your debt-to-income ratio - unless you are paying cash for your next purchase.
Anyone have experience.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Anyone have experience.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Monday, December 13, 2010
Some States Plan to Raise Payroll Taxes in 2011
What do you get when your state is fiscally irresponsible? You pay more for their bad decisions.
Apparently, 31 states are planning to borrow almost $50 billion from the Federal government to pay for unemployment insurance benefits. To pay for this, they plan to increase state and federal payroll taxes. This increase in payroll taxes will tend to reduce future employment plans and may result in more layoffs.
41 states already increased their 2010 payroll taxes by about 34%.
In 2008-09 states collected about $30 billion and paid out about $80 billion in benefits.
I like the statement in the article that eludes to Washington DC charging employers in states that aren't repaying the Federal loans - as if the employers-employees had anything to do with causing the problem or the state's spending.
Bottom line: This will be an additional burden on states and businesses trying to come out of a recession.
Source: WSJ - 11-20/21-2010, A5
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Apparently, 31 states are planning to borrow almost $50 billion from the Federal government to pay for unemployment insurance benefits. To pay for this, they plan to increase state and federal payroll taxes. This increase in payroll taxes will tend to reduce future employment plans and may result in more layoffs.
41 states already increased their 2010 payroll taxes by about 34%.
In 2008-09 states collected about $30 billion and paid out about $80 billion in benefits.
I like the statement in the article that eludes to Washington DC charging employers in states that aren't repaying the Federal loans - as if the employers-employees had anything to do with causing the problem or the state's spending.
Bottom line: This will be an additional burden on states and businesses trying to come out of a recession.
Source: WSJ - 11-20/21-2010, A5
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Friday, December 10, 2010
Second home mortgage lenders - another fly in the ointment
More than 1/3 of all loans in the foreclosure process now have other junior liens (2nd mortgages).
Some lenders of 2nd mortgages are slow to cut deal because the loans are often current. But when they do cut deals, they ask the borrower to agree to pay it back later - which still make the debt repayable.
Note: Isn't it peculiar that many of the first lienholders agree to forgive debt and the debt is not considered income (at least not until 2013 or thereabouts) for Federal Income Tax purposes, yet 2nd lienholders (with alot smaller balances) are trying to ensure they get paid back on a debt that was pretty risky to begin with?
Over 40% of the $1 trillion in outstanding 2nd mortgages are held by the nation's largest 4 banks: Bank of America; Wells Fargo; J.P. Morgan Chase, and Citigroup.
Note: I was disappointed that the author didn't explore or expose more to the 2nd mortgages than meets the eye - For instance, some 2nd lienholders may be holding out or more in private mortgage insurance payoff than what they would get as a payoff - but that's just a guess....;)
Souce: WSJ, 11-27/28-2010, Page A5
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Some lenders of 2nd mortgages are slow to cut deal because the loans are often current. But when they do cut deals, they ask the borrower to agree to pay it back later - which still make the debt repayable.
Note: Isn't it peculiar that many of the first lienholders agree to forgive debt and the debt is not considered income (at least not until 2013 or thereabouts) for Federal Income Tax purposes, yet 2nd lienholders (with alot smaller balances) are trying to ensure they get paid back on a debt that was pretty risky to begin with?
Over 40% of the $1 trillion in outstanding 2nd mortgages are held by the nation's largest 4 banks: Bank of America; Wells Fargo; J.P. Morgan Chase, and Citigroup.
Note: I was disappointed that the author didn't explore or expose more to the 2nd mortgages than meets the eye - For instance, some 2nd lienholders may be holding out or more in private mortgage insurance payoff than what they would get as a payoff - but that's just a guess....;)
Souce: WSJ, 11-27/28-2010, Page A5
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Wednesday, December 8, 2010
Major Real Estate Company in Atlanta charged with discrimination
The US Justice Department has settled with the parties involved who agreed to pay damages and civil penalties amounting to $60,000 for allegedly discriminating against families with children.
Unfortunately, a property was advertised as having a " no-child policy" here in Atlanta where the community wasn't an over 55+ community. The local community itself is under investigation whether they have exercised policies that discriminated against families with children living or looking to purchase in the community.
This is a no-no UNLESS the community is specifically approved and designated for homeowner's over 55 years of age.
Source: MDJ, 11-11-2010, Page 2B.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Unfortunately, a property was advertised as having a " no-child policy" here in Atlanta where the community wasn't an over 55+ community. The local community itself is under investigation whether they have exercised policies that discriminated against families with children living or looking to purchase in the community.
This is a no-no UNLESS the community is specifically approved and designated for homeowner's over 55 years of age.
Source: MDJ, 11-11-2010, Page 2B.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Monday, December 6, 2010
General Service Administration (GSA) finds it harder to sell US Real Estate
The Republican members of the Transportation and Infrastructure Committee recently released a report titled "Sitting on Our Assets: The Federal Government's Misuse of Taxpayer-Owned Assets".
Apparently the report has said the GSA doesn't dispose of property in a timely manner and fails to act as a prudent property owner. Even Barack Obama directed federal agencies to accelerate the elimination of unneeded properties back in June 2010.
In all fairness, some of the properties include lighthouses and other odd properties and financing of unusual properties has dried up - so it might not be entirely fair to criticize the GSA since it's an easy target.
Source: WSJ, November 17, 2010, Page C12
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Apparently the report has said the GSA doesn't dispose of property in a timely manner and fails to act as a prudent property owner. Even Barack Obama directed federal agencies to accelerate the elimination of unneeded properties back in June 2010.
In all fairness, some of the properties include lighthouses and other odd properties and financing of unusual properties has dried up - so it might not be entirely fair to criticize the GSA since it's an easy target.
Source: WSJ, November 17, 2010, Page C12
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Thursday, December 2, 2010
HUD has a 90 day moratorium on Foreclosures in some states
Basically, as a result of the several state investigations of foreclosure activity, some states have requested the moratorium of all foreclosures including HUD (i.e., FHA mortgages). I am sure some similar moratorium provisions are effective on VA loan foreclosures (which are a very few) and quite probably, Fannie Mae and Freddie Mac foreclosures.
Official word from HUD was...
"The Department (HUD) has been advised that due to a recent change in State Laws or State mandated moratoriums, some foreclosures had to be cancelled or stopped and rescheduled to complete all of the new legislative requirements... A ninety (90) day extension to commence foreclosure is provided to those mortgagees where the initial legal action to commence foreclosure has been cancelled to comply with a new State legislation....This extension is provided under the authority of 24 CFR 203.355." And the "extension" means it's "tacked onto" the existing moratorium laws in the appropriate state.
Here is a link to some answers to questions: http://www.hud.gov/offices/hsg/sfh/nsc/faqextns.cfm
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Official word from HUD was...
"The Department (HUD) has been advised that due to a recent change in State Laws or State mandated moratoriums, some foreclosures had to be cancelled or stopped and rescheduled to complete all of the new legislative requirements... A ninety (90) day extension to commence foreclosure is provided to those mortgagees where the initial legal action to commence foreclosure has been cancelled to comply with a new State legislation....This extension is provided under the authority of 24 CFR 203.355." And the "extension" means it's "tacked onto" the existing moratorium laws in the appropriate state.
Here is a link to some answers to questions: http://www.hud.gov/offices/hsg/sfh/nsc/faqextns.cfm
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Monday, November 29, 2010
Ways to reduce your mortgage payment
First, there is always the option of making extra payments toward principal yourself. But don't fall for some businesses that promise results by paying them...Just make the same payment to your loan servicer and ask them to apply the extra amount immediately.
Next, you can ask your lender if they can "recast" your loan. In this fashion, for a small fee with your current lender/servicer, you can ask for a lower monthly payment without extra closing or appraisal costs.
Also, apparently recent changes in banking regulations have severely restricted lender who use prepayment penalties...but ask anyway.
Source: WSJ 10-2/3-2010, B8
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Next, you can ask your lender if they can "recast" your loan. In this fashion, for a small fee with your current lender/servicer, you can ask for a lower monthly payment without extra closing or appraisal costs.
Also, apparently recent changes in banking regulations have severely restricted lender who use prepayment penalties...but ask anyway.
Source: WSJ 10-2/3-2010, B8
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Wednesday, November 24, 2010
Some online mortgage calculators
I found these on the web through different source and I am not sure how much use they will b or the simplest or you to use, but don't feel obligated to use any services advertised on this website.
US Government mortgage calculator from Ginnie Mae - http://www.ginniemae.gov/2_prequal/intro_questions.asp?section=YPTH.
Simple mortgage calculator from Kim Komando: http://amortizationloancalculator.net/index.php
Various mortgage calculators - http://www.calculators4mortgages.com/
Determination to refinance an existing mortgage - http://www.bills.com/calculator-mortgage/
Domania.com offers calculators an recent home sales in your neighborhood - http://www.domania.com/Calculator/default.aspx
Helpful tips and mortgage calculator - http://www.mtgprofessor.com/home.aspx
Lending tree (careful - you may get alot of ads) - http://www.lendingtree.com/mortgage-loans/calculators/loan-payment-calculator/
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
US Government mortgage calculator from Ginnie Mae - http://www.ginniemae.gov/2_prequal/intro_questions.asp?section=YPTH.
Simple mortgage calculator from Kim Komando: http://amortizationloancalculator.net/index.php
Various mortgage calculators - http://www.calculators4mortgages.com/
Determination to refinance an existing mortgage - http://www.bills.com/calculator-mortgage/
Domania.com offers calculators an recent home sales in your neighborhood - http://www.domania.com/Calculator/default.aspx
Helpful tips and mortgage calculator - http://www.mtgprofessor.com/home.aspx
Lending tree (careful - you may get alot of ads) - http://www.lendingtree.com/mortgage-loans/calculators/loan-payment-calculator/
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Monday, November 22, 2010
Your FICO score may drop without you doing a thing!
Even if you're on time with your payments on everything, your FICO credit score may suffer.
If the bank arbitrarily drops your available line of credit on your bank credit card, your credit score may take a hit for sudden change in balance.
The National Association of Realtors (NAR) wants to pressure Fair Issac to change this policy.
NAR also is requesting Fair Issac consider the impact on credit scores of homeowners who had received loan modifications approved under federally backed programs like HAMP. Currently they treat them harshly as if the mortgage wasn't paid as originally agreed - this means a deeper drop in score.
Source: http://www.latimes.com/business/realestate/la-fi-harney-20101121-7,0,6076482.story
Bottom line: What can you do about it? Write to the Fair Issac Company; write your congressional Representatives, or sit on your butt and continue to do nothing as usual.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
If the bank arbitrarily drops your available line of credit on your bank credit card, your credit score may take a hit for sudden change in balance.
The National Association of Realtors (NAR) wants to pressure Fair Issac to change this policy.
NAR also is requesting Fair Issac consider the impact on credit scores of homeowners who had received loan modifications approved under federally backed programs like HAMP. Currently they treat them harshly as if the mortgage wasn't paid as originally agreed - this means a deeper drop in score.
Source: http://www.latimes.com/business/realestate/la-fi-harney-20101121-7,0,6076482.story
Bottom line: What can you do about it? Write to the Fair Issac Company; write your congressional Representatives, or sit on your butt and continue to do nothing as usual.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Thursday, November 18, 2010
Georgia Residential Mortgage Act (GRMA) fee at closing
For a number of years, there was a little noticed fee on each closing statement (HUD-1) in Georgia. A $6.50 fee was charged for each new loan on a property.
You an see why the fee doesn't raise any interest because you normally focus on alot higher charges in closings and the fee goes to cover the costs for the Georgia Department of Banking and Finance (click here for GDBF website) to develop and administer rules and regulations, licensing and registration requirements, review of applications by prospective mortgage lenders in Georgia, and the review and enforcement of statues.
So why mention it? - That fee has now been raised to $10 (see form and notice of increase here). I hate it when fees are raised and no discussion is provided for the increase. Is this fee adequate to cover legitimate expenses? Does the Georgia Department of Banking and Finance deserve the fee? Do we have a "taxation without representation" situation here?
NOTE: When I called last year to mention the possibility of filing a complaint on a lender, they told me their budget was cut and didn't have money to investigate any more complaints...
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
You an see why the fee doesn't raise any interest because you normally focus on alot higher charges in closings and the fee goes to cover the costs for the Georgia Department of Banking and Finance (click here for GDBF website) to develop and administer rules and regulations, licensing and registration requirements, review of applications by prospective mortgage lenders in Georgia, and the review and enforcement of statues.
So why mention it? - That fee has now been raised to $10 (see form and notice of increase here). I hate it when fees are raised and no discussion is provided for the increase. Is this fee adequate to cover legitimate expenses? Does the Georgia Department of Banking and Finance deserve the fee? Do we have a "taxation without representation" situation here?
NOTE: When I called last year to mention the possibility of filing a complaint on a lender, they told me their budget was cut and didn't have money to investigate any more complaints...
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Wednesday, November 17, 2010
Atlanta Regional Commission - Fact, fiction or do they matter at all?
This post may be updated from time to time - depending on the importance of this commission.
According to Charles Krauter (ARC Director), the "PLAN 2040" (whatever anyone knows about 30 years from now...) is based on 2 requirements - A federal requirement to perform a long range transportation plan every six (6) years and a Georgia state requirement from the Department of Community Affairs to perform a regional development plan every 5 years (in other words, they are planning to plan).
This may be the first time the ARC is developing a comprehensive plan (oh yeah, what have they been doing so far - pocket pool?). How much have the citizens of Georgia spent on the ARC and how many "solutions" have they presented to solve "real" problems.
ARC estimates that the 20 county metro Atlanta area will grow by 3 million people totalling about 8.3 m million.
The ARC outlines some challenges for the area like availability of water, aging population, 75% of the population have no other option to drive to other destinations, and the area needs more funds and better management of those funds.
Bottom line: Watch out for the ARC to come to the conclusion we need to build more rail transportation...but between which two cities and who will profit from this construction?
Source: Atlanta Business Chronicle, 11-5 thru 11, 2010, Page 4A.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
According to Charles Krauter (ARC Director), the "PLAN 2040" (whatever anyone knows about 30 years from now...) is based on 2 requirements - A federal requirement to perform a long range transportation plan every six (6) years and a Georgia state requirement from the Department of Community Affairs to perform a regional development plan every 5 years (in other words, they are planning to plan).
This may be the first time the ARC is developing a comprehensive plan (oh yeah, what have they been doing so far - pocket pool?). How much have the citizens of Georgia spent on the ARC and how many "solutions" have they presented to solve "real" problems.
ARC estimates that the 20 county metro Atlanta area will grow by 3 million people totalling about 8.3 m million.
The ARC outlines some challenges for the area like availability of water, aging population, 75% of the population have no other option to drive to other destinations, and the area needs more funds and better management of those funds.
Bottom line: Watch out for the ARC to come to the conclusion we need to build more rail transportation...but between which two cities and who will profit from this construction?
Source: Atlanta Business Chronicle, 11-5 thru 11, 2010, Page 4A.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Tuesday, November 16, 2010
Are you or your remodelers "lead safe certified" to handle lead based paint?
6-14-2011: EPAs website for more details about Lead Based Paint - http://www.epa.gov/ne/enforcement/leadpaint/index.html
Also, a little insight from John Adams, Real Estate Advisor about the final implementation date of 4-22-2010 and other effective dates. - http://money99.com/content/view/516/67/
Per the 3-27/28-2010 WSJ, Page A6, based on a regulation taking effect on 4-22-2010, if you hire a remodeler of a home built in 1978 or prior, they must be federally certified to handle lead based paint removal. Otherwise, your contractor (and maybe you based on your written contract with the contractor) will face a $37,000 daily fine. No waivers will be issued anymore to homeowners who verify there are no pregnant women or children under 6 years old - they closed that loophole.
And as you can guess, the federal government hasn't certified more than 135 businesses and less than 14,000 individuals of the nearly 212,000 firms and 236,000 individual contractors the EPA has estimated that are needed. There haven't been many training providers (job creation?) accredited to train the hundreds of thousand of contractors.
Can we call a South Park shenanigans yet?
Does this mean if you do it yourself, you don't have to be certified?
Does this mean more people will perform the remodeling work themselves and not hire a professional?
Does this mean work will come to a screeching halt because of the $37,000 daily fines of contractors who aren't certified?
6-14-2011 Note: After April 22, 2010, property owners who perform these projects in pre-1978 rental housing or space rented by child-care facilities must be certified and must follow the lead-safe work practices required by EPA's Renovation, Repair and Remodeling rule. http://www.epa.gov/lead/pubs/renovation.htm
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Also, a little insight from John Adams, Real Estate Advisor about the final implementation date of 4-22-2010 and other effective dates. - http://money99.com/content/view/516/67/
Per the 3-27/28-2010 WSJ, Page A6, based on a regulation taking effect on 4-22-2010, if you hire a remodeler of a home built in 1978 or prior, they must be federally certified to handle lead based paint removal. Otherwise, your contractor (and maybe you based on your written contract with the contractor) will face a $37,000 daily fine. No waivers will be issued anymore to homeowners who verify there are no pregnant women or children under 6 years old - they closed that loophole.
And as you can guess, the federal government hasn't certified more than 135 businesses and less than 14,000 individuals of the nearly 212,000 firms and 236,000 individual contractors the EPA has estimated that are needed. There haven't been many training providers (job creation?) accredited to train the hundreds of thousand of contractors.
Can we call a South Park shenanigans yet?
Does this mean if you do it yourself, you don't have to be certified?
Does this mean more people will perform the remodeling work themselves and not hire a professional?
Does this mean work will come to a screeching halt because of the $37,000 daily fines of contractors who aren't certified?
6-14-2011 Note: After April 22, 2010, property owners who perform these projects in pre-1978 rental housing or space rented by child-care facilities must be certified and must follow the lead-safe work practices required by EPA's Renovation, Repair and Remodeling rule. http://www.epa.gov/lead/pubs/renovation.htm
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Monday, November 15, 2010
Some homeowners stop paying mortgages - and stay in homes!
Yesterday: "You don't pay...You don't stay!
Today: "Don't pay, stay, and see what happens!"
You have a 1 in 5 chance of being kicked out of your house for non payment of your mortgage...
This NY Times article really blows the traditional lid off what you think of traditional foreclosures.
This is a quote from the article: "More than 650,000 households had not paid in 18 months, LPS calculated earlier this year. With 19 percent of those homes, the lender had not even begun to take action to repossess the property..."
This may not be the most moral approach since the homebuyer agreed to pay one amount, but is now paying another amount or not at all, well...it amounts to fraud...in this case by the homeowners!
I can empathize if there is a major change in medical, employment, or income status - but even with the IRS forgiveness of the 1099 taxable income, the lender still has a note from the homeowner promising to pay.
Hence, this presents another "moral (fairness) hazard" (in addition to bailing out people who have overextended themselves to purchase a house) that once the homeowners who "are" paying their mortgages hear this, they will also say "why should I be paying my mortgage if others don't pay theirs and get to stay?".
Oh and I heard the other day that banks are now selling their deficiency judgments to debt collectors who will be hounding the homeowner for years down the road. Is this the kind of job growth that was promised over a year ago?
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Today: "Don't pay, stay, and see what happens!"
You have a 1 in 5 chance of being kicked out of your house for non payment of your mortgage...
This NY Times article really blows the traditional lid off what you think of traditional foreclosures.
This is a quote from the article: "More than 650,000 households had not paid in 18 months, LPS calculated earlier this year. With 19 percent of those homes, the lender had not even begun to take action to repossess the property..."
This may not be the most moral approach since the homebuyer agreed to pay one amount, but is now paying another amount or not at all, well...it amounts to fraud...in this case by the homeowners!
I can empathize if there is a major change in medical, employment, or income status - but even with the IRS forgiveness of the 1099 taxable income, the lender still has a note from the homeowner promising to pay.
Hence, this presents another "moral (fairness) hazard" (in addition to bailing out people who have overextended themselves to purchase a house) that once the homeowners who "are" paying their mortgages hear this, they will also say "why should I be paying my mortgage if others don't pay theirs and get to stay?".
Oh and I heard the other day that banks are now selling their deficiency judgments to debt collectors who will be hounding the homeowner for years down the road. Is this the kind of job growth that was promised over a year ago?
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Sunday, November 14, 2010
High Speed Rail - News and Projects
I know this doesn't directly relate to real estate, but the location of the rail lines will impact local real estate values. Some property sellers will make some money...look at Sonny Perdue's gains after the recent Georgia interstate meandering through his property.
But my main concern is the wasteful spending by US Congress. They are planning to spend $2.4 billion (of the $8 billion Pres. Obama set aside last year) in grants to study 54 high speed rail projects in 23 states ($4.1 to study rail transit between Atlanta and Charlotte). The Federal Railroad Administration received 132 applications from 32 states.
I'm sorry, but let's just consider rail systems between two highly concentrated populations in which the termination points are within close proximity to residential and commercial workplaces. In other words, why do I take a train to take a couple of buses to my final destination? How much does it cost to move the person on a train, to other ground transportation, to their final destination? And just because Europe and the rest of the world has high speed rail, look at their cultures and costs. I bet they use it due to their limited geographic space (i.e., Japan) and low GDP (Pakistan/India).
Bottom line: Pork and spreading the taxpayer's wealth!
Source of information: Atlanta Business Chronicle - November 5-11, 2010, 25A
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
But my main concern is the wasteful spending by US Congress. They are planning to spend $2.4 billion (of the $8 billion Pres. Obama set aside last year) in grants to study 54 high speed rail projects in 23 states ($4.1 to study rail transit between Atlanta and Charlotte). The Federal Railroad Administration received 132 applications from 32 states.
I'm sorry, but let's just consider rail systems between two highly concentrated populations in which the termination points are within close proximity to residential and commercial workplaces. In other words, why do I take a train to take a couple of buses to my final destination? How much does it cost to move the person on a train, to other ground transportation, to their final destination? And just because Europe and the rest of the world has high speed rail, look at their cultures and costs. I bet they use it due to their limited geographic space (i.e., Japan) and low GDP (Pakistan/India).
Bottom line: Pork and spreading the taxpayer's wealth!
Source of information: Atlanta Business Chronicle - November 5-11, 2010, 25A
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Friday, November 12, 2010
Deficit Reduction Panel and Realtor Organizations
I think alot of real estate lobbyist groups ( a whole bunch of them) are going to pummel the doors of Congress to try and stop any hint of eliminating this deduction (as they have done so often before).
That's why I don't belong to any of them - they lobby Congress for stuff in "their" best interests.
If we enacted the Fair Tax and eliminated the need for income tax deductions, there would no longer be the false incentive to buy a house "to get the mortgage interest and property tax deductions" that I have heard some other agents profess is a golden goose reason to buy a house. Sure, it's a side benefit of owning a home, but it shouldn't be so important. Flexibility to resell, location, home that fits your lifestyle, and well within your budget should be much more important factors.
What I understand is that the plans were to combine the elimination of the mortgage deduction with a corresponding reduction of tax rate....which may in effect wash itself out.
But mark my words, there will be agents and brokers and heads of realtor associations whining about this for weeks to come.
Ah, the smell of stupidity....
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
That's why I don't belong to any of them - they lobby Congress for stuff in "their" best interests.
If we enacted the Fair Tax and eliminated the need for income tax deductions, there would no longer be the false incentive to buy a house "to get the mortgage interest and property tax deductions" that I have heard some other agents profess is a golden goose reason to buy a house. Sure, it's a side benefit of owning a home, but it shouldn't be so important. Flexibility to resell, location, home that fits your lifestyle, and well within your budget should be much more important factors.
What I understand is that the plans were to combine the elimination of the mortgage deduction with a corresponding reduction of tax rate....which may in effect wash itself out.
But mark my words, there will be agents and brokers and heads of realtor associations whining about this for weeks to come.
Ah, the smell of stupidity....
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Thursday, November 11, 2010
Private Transfer Fees
Definition: A fee charged (normally 1% of sales price) for a period of years (usually 99) each time ownership of a real property is transferred. Sometimes it's paid to homeowner's association for maintenance or capital improvements (roads, entrance, pools, tennis courts, clubhouse, etc,.). Other times it's paid to the developer of a residential subdivision to be applied toward the developer's costs of creating the subdivision including grading, subdividing, roads, common area amenities, sewers, utility (street water, sewer, and electrical lines), and coordination with local businesses and code department to comply with codes and ordinances, and profit.
Many times, the developer's cost of developing the subdivision is included in the cost of each lot charged to builders who purchase the lots and build houses on them.
About 20 states have laws regulating the fees and a bill is in US Congress which calls for the prohibition of the fees.
The Federal Housing Finance Agency (FHFA) is proposing a regulation top prohibit Fannie Mae/Freddie Mac from buying mortgages on real properties that has these fees. FHFA believes that the fees lower equity, depress home prices, and add a complicated the legal transfer of real estate.
Source: WSJ, 11-5-2010 C11
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Many times, the developer's cost of developing the subdivision is included in the cost of each lot charged to builders who purchase the lots and build houses on them.
About 20 states have laws regulating the fees and a bill is in US Congress which calls for the prohibition of the fees.
The Federal Housing Finance Agency (FHFA) is proposing a regulation top prohibit Fannie Mae/Freddie Mac from buying mortgages on real properties that has these fees. FHFA believes that the fees lower equity, depress home prices, and add a complicated the legal transfer of real estate.
Source: WSJ, 11-5-2010 C11
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Wednesday, November 10, 2010
HOA Reserve Fund or Special Assessment - Pick your poison
Homebuyer/homeowner Beware!
If there is a Homeowner’s Association (HOA) for a property you plan to purchase, there normally will be monthly/annual dues you will pay in addition to your mortgage. Be sure you inspect the financial stability of the HOA's budget and its reserve fund. In this economy, many homeowners are refusing to pay their homeowner's dues.
Every HOA has costs. In addition to the front subdivision entrance area and monument, if there are facilities like a pool, tennis court(s), clubhouse, playground, etc, there are costs to insure and maintain them. The standard approach is to collect monthly/annual dues from homeowners to pay for all these and other necessary expenditures. A portion of your HOA fees/dues may be in excess of current planned annual expenses and placed in the bank as “reserve funds” to be used for major or unexpected repair and replacement of facilities/amenities.
If the HOA does not have enough funds to pay for the extras like relining the pool, resurfacing the tennis court, or re-roofing the clubhouse (which all could cost several thousands more than normal expenditures), then depending on the HOA CCR’s (Conditions, Covenants, and Restrictions – i.e., HOA rules/regulations) the HOA needs to get the funds one of two ways:
(a) PAY NOW - Charge each house in subdivision a flat one-time fee (i.e., special assessment) to cover their share of expenses, or
(b) PAY LATER - Increase the annual HOA fee by an amount equal to finance the expenditure over a period of time.
Underwriters of many condominium loans (FHA, Fannie Mae, and Freddie Mac) may require a reserve study and proof that at least a minimum percentage of the annual budget is placed in reserve or may not get financing for the HOA expenditures.
The HOA can have a reserve study performed by a qualified reserve study provider. Members of Association of Professional Reserve Analysts.
Note: Special assessments are the results of poor planning
Here is a good article on Homeowner's Associations
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
If there is a Homeowner’s Association (HOA) for a property you plan to purchase, there normally will be monthly/annual dues you will pay in addition to your mortgage. Be sure you inspect the financial stability of the HOA's budget and its reserve fund. In this economy, many homeowners are refusing to pay their homeowner's dues.
Every HOA has costs. In addition to the front subdivision entrance area and monument, if there are facilities like a pool, tennis court(s), clubhouse, playground, etc, there are costs to insure and maintain them. The standard approach is to collect monthly/annual dues from homeowners to pay for all these and other necessary expenditures. A portion of your HOA fees/dues may be in excess of current planned annual expenses and placed in the bank as “reserve funds” to be used for major or unexpected repair and replacement of facilities/amenities.
If the HOA does not have enough funds to pay for the extras like relining the pool, resurfacing the tennis court, or re-roofing the clubhouse (which all could cost several thousands more than normal expenditures), then depending on the HOA CCR’s (Conditions, Covenants, and Restrictions – i.e., HOA rules/regulations) the HOA needs to get the funds one of two ways:
(a) PAY NOW - Charge each house in subdivision a flat one-time fee (i.e., special assessment) to cover their share of expenses, or
(b) PAY LATER - Increase the annual HOA fee by an amount equal to finance the expenditure over a period of time.
Underwriters of many condominium loans (FHA, Fannie Mae, and Freddie Mac) may require a reserve study and proof that at least a minimum percentage of the annual budget is placed in reserve or may not get financing for the HOA expenditures.
The HOA can have a reserve study performed by a qualified reserve study provider. Members of Association of Professional Reserve Analysts.
Note: Special assessments are the results of poor planning
Here is a good article on Homeowner's Associations
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Tuesday, November 9, 2010
Can we make serious mortgage foreclosure violations punishable by death?
I love the state/federal governments in this country...they complain of "serious errors and procedure violations" yet can't find any major errors...then in the same breath, they want foreclosures to start moving again - Here's an idea - Get the h*** out of the way, stop making just the lawyers profit from multiple generic lawsuits, and investigate only those calls into your state offices! ...Oh, and make serious mortgage company violations punishable by death with choice of termination method by displaced homeowner!
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Monday, November 8, 2010
Mortgage Electronic Registration Systems (MERS)
7-28-2011: MERS is out of the mortgage foreclosure business? Maybe not for long...Just transfer into another lender name...then foreclose! Source: http://www.dsnews.com/articles/mers-bows-out-of-foreclosure-and-bankruptcy-proceedings-2011-07-27
6-7-2011:Hard to believe these numbers $60-120 Billion in unpaid property recording fees alone? Either California has excessive fees or they are suffering from PMS...Phuzzy Math Syndrome! Source: http://realestate.bryanellis.com/4581/untangling-the-mers-mess-part-2/
6-6-2011: Oregon, like Georgia, is a non-judicial foreclosure state meaning the bank/lending institution doesn't need to go to court to foreclose, however, a Federal Oregon judge just ruled the state requires banks to record the ownership history of the mortgage with local county governments and not loud the chain of title using MERS. The Mortgage Electronic Registration Systems (MERS) was created by the mortgage industry (including consensus by the Federal Government through Fannie Mae/Freddie Mac sanction) in the 1990s to record mortgages under "MERS" ownership but that got bundled and resold as securities. However, MERS is under investigation for lots of property records that not only hid identity of current mortgage holder, but avoided recording fee revenue for local governments.
Source: http://blogs.wsj.com/developments/2011/05/26/oregon-judge-denies-foreclosure-challenges-mers/
5-10-2011: Court cases involving MERS (founded in mid 90 by Fannie, Freddie and some large US banks) - retains control over about 60 million mortgage loans with respect to foreclosure action - think of how much money they save (and local governments lose) when MERS doesn't need to pay mortgage filing fees more than once.
Source: http://hken.ibtimes.com/articles/143315/20110510/california-court-mortgage-foreclosure-new-york-times.htm
Update 1-3-2011: Shell game of MERS - See 12-15-2010 House Judiciary Subcommittee - http://www.c-spanvideo.org/program/ForeclosureC
MERS, out of Reston VA, serves as a stand alone "place holder" of mortgage loans in the United States.It was created jointly almost 13 years ago between large banks, financial institutions, and Fannie/Freddie to expedite the process of recording change in ownership of mortgage loans. Normally, each time a mortgage changes ownership, the change in ownership must be recorded in the public records of where the real property is located. Each change in ownership is normally accompanied by a charge by the county to record the fee that covers the cost to maintain and record records in the system. MERS currently controls about 65 million home loans.
Since several state budgets are tapped out and looking for new sources of revenue, this provides an "opportunity" for states to get some extra revenues by filing lawsuits (Nevada and California already) challenging MERS ability to actually have the authority to foreclose on a property and attempting to collect a fee for each change in ownership on a loan during MERS control. Virginia AG is investigating whether MERS should have paid a fee each time the loan changed hands.
A Georgia attorney is trying to get MERS foreclosures nullified and properties returned to former homeowners.
Sources: Atlanta Business Chronicle November 5-11, 2010 - 4A - WSJ 11-2-2010, C1
Note: Remember my post earlier this year regarding the inability of Lender Processing Services (LPS) to identify the actual owner of the mortgage? I smell a connection between LPS and MERS....
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
6-7-2011:Hard to believe these numbers $60-120 Billion in unpaid property recording fees alone? Either California has excessive fees or they are suffering from PMS...Phuzzy Math Syndrome! Source: http://realestate.bryanellis.com/4581/untangling-the-mers-mess-part-2/
6-6-2011: Oregon, like Georgia, is a non-judicial foreclosure state meaning the bank/lending institution doesn't need to go to court to foreclose, however, a Federal Oregon judge just ruled the state requires banks to record the ownership history of the mortgage with local county governments and not loud the chain of title using MERS. The Mortgage Electronic Registration Systems (MERS) was created by the mortgage industry (including consensus by the Federal Government through Fannie Mae/Freddie Mac sanction) in the 1990s to record mortgages under "MERS" ownership but that got bundled and resold as securities. However, MERS is under investigation for lots of property records that not only hid identity of current mortgage holder, but avoided recording fee revenue for local governments.
Source: http://blogs.wsj.com/developments/2011/05/26/oregon-judge-denies-foreclosure-challenges-mers/
5-10-2011: Court cases involving MERS (founded in mid 90 by Fannie, Freddie and some large US banks) - retains control over about 60 million mortgage loans with respect to foreclosure action - think of how much money they save (and local governments lose) when MERS doesn't need to pay mortgage filing fees more than once.
Source: http://hken.ibtimes.com/articles/143315/20110510/california-court-mortgage-foreclosure-new-york-times.htm
Update 1-3-2011: Shell game of MERS - See 12-15-2010 House Judiciary Subcommittee - http://www.c-spanvideo.org/program/ForeclosureC
MERS, out of Reston VA, serves as a stand alone "place holder" of mortgage loans in the United States.It was created jointly almost 13 years ago between large banks, financial institutions, and Fannie/Freddie to expedite the process of recording change in ownership of mortgage loans. Normally, each time a mortgage changes ownership, the change in ownership must be recorded in the public records of where the real property is located. Each change in ownership is normally accompanied by a charge by the county to record the fee that covers the cost to maintain and record records in the system. MERS currently controls about 65 million home loans.
Since several state budgets are tapped out and looking for new sources of revenue, this provides an "opportunity" for states to get some extra revenues by filing lawsuits (Nevada and California already) challenging MERS ability to actually have the authority to foreclose on a property and attempting to collect a fee for each change in ownership on a loan during MERS control. Virginia AG is investigating whether MERS should have paid a fee each time the loan changed hands.
A Georgia attorney is trying to get MERS foreclosures nullified and properties returned to former homeowners.
Sources: Atlanta Business Chronicle November 5-11, 2010 - 4A - WSJ 11-2-2010, C1
Note: Remember my post earlier this year regarding the inability of Lender Processing Services (LPS) to identify the actual owner of the mortgage? I smell a connection between LPS and MERS....
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Friday, November 5, 2010
Should we privatize the mortgage market?
About 90% of today's $14 Trillion in mortgage loans are controlled by the Federal Housing Authority (FHA), Department of Veterans Affairs, Fannie Mae or Freddie Mac. That's alot of risk concentrated on one source - the US taxpayers!
Even though the private market couldn't compete with government guarantees, or offer loans without a prepayment penalty, we certainly don't want to leave the taxpayer on the hook.
One step toward privatization suggested was to reduce the maximum amount of mortgage loan by $75,000 on a periodic basis which eventually would force more people out of the government loan and into a private loan.
Full disclosures - consumer protections - and reducing taxpayer exposure are goals.
Recourse -The right to seize the home owner's other personal assets, in addition to the real property, in payment of the loan. Proposals include using recourse to drive rates lower if borrower is willing to accept more risk to give up their personal assets
Note: Government National Mortgage Association - Ginnie Mae - securitizes the FHA loans now.
Source: For some information was WSJ 10-25-2010, A17
Also, if you want to watch a good summary of securitization analysis - here's a Cspan video library segment - but grab a pot of coffee - http://www.c-spanvideo.org/program/296226-1
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Even though the private market couldn't compete with government guarantees, or offer loans without a prepayment penalty, we certainly don't want to leave the taxpayer on the hook.
One step toward privatization suggested was to reduce the maximum amount of mortgage loan by $75,000 on a periodic basis which eventually would force more people out of the government loan and into a private loan.
Full disclosures - consumer protections - and reducing taxpayer exposure are goals.
Recourse -The right to seize the home owner's other personal assets, in addition to the real property, in payment of the loan. Proposals include using recourse to drive rates lower if borrower is willing to accept more risk to give up their personal assets
Note: Government National Mortgage Association - Ginnie Mae - securitizes the FHA loans now.
Source: For some information was WSJ 10-25-2010, A17
Also, if you want to watch a good summary of securitization analysis - here's a Cspan video library segment - but grab a pot of coffee - http://www.c-spanvideo.org/program/296226-1
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Thursday, November 4, 2010
Does crime really pay?
The MDJ article on page 5B of the 6-24-2010 issue reports that 1,300 inmates in prison filed for a total of $9 million under the $8,000 first-time homebuyer tax credit.
It was reported that 14,100 tax filers wrongly received about $27 million in tax credits. Apparently, this number doesn't include the people who filed and received the tax credit in 2009 that never bought homes. (I wonder how much of that we'll recover?)
• One home was used more than 65 times to get the same credit.
• Some even got the credit for sales "prior to" the start of the effective date.
Total claims filed amounted to almost $19 Billion.
The National Association of Realtors (NAR) reported that about 1 million new homes were sold that probably wouldn't have if the tax credit wasn't available. (Don't really know how they got those figures. I would imagine that most would be sold anyway, just later in the year and not before the 4-30-2010 contract cutoff date.)
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
It was reported that 14,100 tax filers wrongly received about $27 million in tax credits. Apparently, this number doesn't include the people who filed and received the tax credit in 2009 that never bought homes. (I wonder how much of that we'll recover?)
• One home was used more than 65 times to get the same credit.
• Some even got the credit for sales "prior to" the start of the effective date.
Total claims filed amounted to almost $19 Billion.
The National Association of Realtors (NAR) reported that about 1 million new homes were sold that probably wouldn't have if the tax credit wasn't available. (Don't really know how they got those figures. I would imagine that most would be sold anyway, just later in the year and not before the 4-30-2010 contract cutoff date.)
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Wednesday, November 3, 2010
Alternative to Foreclosure - Deed in Lieu of Foreclosure & Short Sales
Update 10-11-2011: According to this FICO study, there's is little difference between foreclosure and short sale when it comes to a hit on your credit score, but shorter refresh period with short sales (about 3 years) than foreclosure (about 7 years). Source: http://massrealestatenews.com/credit-scoring-impacts-short-sale-vs-foreclosure/
It was sad to see a young couple with two children down the street from me that weren't able to sell their house on a short sale, so they wound up taking this action: Deed in Lieu of Foreclosure.
A Deed in lieu of foreclosure is a special deed that the homeowner/borrower uses to transfer ownership in a residential property (e.g., primary residence) to the mortgagee/lender to eliminate a loan that is in default (i.e., behind on payments) and thereby avoids a foreclosure.
Some reported advantages are: see wikipedia discussion here.
It immediately releases borrower from some portion (which means a possible deficiency judgment) or the entire mortgage and may be less impact as a foreclosure.
NOTE: I am trying to noodle this out and I'm not sure how this deficiency plays out, but I would recommend somewhere in the documentation that you sign in the DIL process would need to have the lender's agreement to "waive" their pursuit of a deficiency judgment.
Your lender is required to report a deficiency from a foreclosure or short sale to the IRS for tax purposes - so I assume this would be true if the lender also forgave a small portion of the loan under Deed in Lieu action. The lender sends you 1099A Form which reflects that the deficiency has "not" been forgiven/cancelled and the lender "can" come after you in future to collect the debt.
If the lender forgives the debt, you'll receive a Form 1099C. It suggests that the remainder of the debt has been cancelled and the lender will not come after you to collect the debt.
For income tax purposes in 2010, in both cases of the 1099A and 1099C Forms, I believe the "forgiveness" of these debts will need to be reported as income, but will subsequently be exempted from Income Taxes (per HR 3648 - the Mortgage Forgiveness Debt Relief Act, 2007).
Other benefits may include:
• Avoids the public (published in newspaper of record) notice of foreclosure situation;
• The borrower may get more generous terms than he/she would in a formal foreclosure.
• It probably will hurt the borrower's credit score and future ability to obtain credit (possibly more or less than a foreclosure);
• Advantages to a lender include a reduction in the time and cost of a repossession, lower risk of borrower revenge (theft and vandalism of the property before sheriff eviction), and additional advantages if the borrower subsequently files for bankruptcy.
I would think some disadvantages would be:
• It may not apply if you have more than one loan on the property.
• Negative impact on your credit score - perhaps worse than 120-150 points that foreclosures and short sales impact your credit score and maybe less than the 300-350 point drop in your credit score from a Bankruptcy. (See this article for impact - http://www.ehow.com/about_7446137_effect-foreclosure-credit-rating.html)
• Losing a property in which you may have some equity but just couldn't afford to continue the payment.
• You may first be required to try to sell the property (as a short sale) for 60-90 days which often wastes your time, but delays the inevitable, since you may not receive an offer high enough to pay off the loan balance(s).
See a summary of advantages and disadvantages of Deeds in Lieu of Foreclosure at http://www.nolo.com/
or
Here at the HUD (Housing & Urban Development) website
Both the borrower (by voluntary action) and the lender have to agree on all terms. If possible, the written agreement must have total consideration (appraisal/fair market value of the property plus potential cash payment by borrower, if cash is available) at least equal to the loan balance. Otherwise, there will be loan forgiveness involved.
Before considering this action, please consult with a real estate attorney about the process and consequences.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
It was sad to see a young couple with two children down the street from me that weren't able to sell their house on a short sale, so they wound up taking this action: Deed in Lieu of Foreclosure.
A Deed in lieu of foreclosure is a special deed that the homeowner/borrower uses to transfer ownership in a residential property (e.g., primary residence) to the mortgagee/lender to eliminate a loan that is in default (i.e., behind on payments) and thereby avoids a foreclosure.
Some reported advantages are: see wikipedia discussion here.
It immediately releases borrower from some portion (which means a possible deficiency judgment) or the entire mortgage and may be less impact as a foreclosure.
NOTE: I am trying to noodle this out and I'm not sure how this deficiency plays out, but I would recommend somewhere in the documentation that you sign in the DIL process would need to have the lender's agreement to "waive" their pursuit of a deficiency judgment.
Your lender is required to report a deficiency from a foreclosure or short sale to the IRS for tax purposes - so I assume this would be true if the lender also forgave a small portion of the loan under Deed in Lieu action. The lender sends you 1099A Form which reflects that the deficiency has "not" been forgiven/cancelled and the lender "can" come after you in future to collect the debt.
If the lender forgives the debt, you'll receive a Form 1099C. It suggests that the remainder of the debt has been cancelled and the lender will not come after you to collect the debt.
For income tax purposes in 2010, in both cases of the 1099A and 1099C Forms, I believe the "forgiveness" of these debts will need to be reported as income, but will subsequently be exempted from Income Taxes (per HR 3648 - the Mortgage Forgiveness Debt Relief Act, 2007).
Other benefits may include:
• Avoids the public (published in newspaper of record) notice of foreclosure situation;
• The borrower may get more generous terms than he/she would in a formal foreclosure.
• It probably will hurt the borrower's credit score and future ability to obtain credit (possibly more or less than a foreclosure);
• Advantages to a lender include a reduction in the time and cost of a repossession, lower risk of borrower revenge (theft and vandalism of the property before sheriff eviction), and additional advantages if the borrower subsequently files for bankruptcy.
I would think some disadvantages would be:
• It may not apply if you have more than one loan on the property.
• Negative impact on your credit score - perhaps worse than 120-150 points that foreclosures and short sales impact your credit score and maybe less than the 300-350 point drop in your credit score from a Bankruptcy. (See this article for impact - http://www.ehow.com/about_7446137_effect-foreclosure-credit-rating.html)
• Losing a property in which you may have some equity but just couldn't afford to continue the payment.
• You may first be required to try to sell the property (as a short sale) for 60-90 days which often wastes your time, but delays the inevitable, since you may not receive an offer high enough to pay off the loan balance(s).
See a summary of advantages and disadvantages of Deeds in Lieu of Foreclosure at http://www.nolo.com/
or
Here at the HUD (Housing & Urban Development) website
Both the borrower (by voluntary action) and the lender have to agree on all terms. If possible, the written agreement must have total consideration (appraisal/fair market value of the property plus potential cash payment by borrower, if cash is available) at least equal to the loan balance. Otherwise, there will be loan forgiveness involved.
Before considering this action, please consult with a real estate attorney about the process and consequences.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Tuesday, November 2, 2010
Credit Unions - Sam's Club - will they be lending more to businesses?
This doesn't necessarily relate to residential real estate, but perhaps to commercial real estate and all business owners, regardless of where they operate their businesses - residential or non-residential locations.
HR 3380 (Promoting Lending to America's Small Businesses Act) proposed that credit unions may double (from 12.5% to 25% of its capital) the amount of funds available to lend to businesses. Credit unions may also be able to provide other services like business checking and business credit cards.
This really ticks off the commercial banks who traditionally lend to businesses….Obviously, it’s competition (duh!).
Side note: Our credit union just went video – the new branch they moved to, with respect to security, has a video screen to chat with teller and air tube system that transports your transaction to another part of the facility…There is no human contact with the teller, just through a video screen an camera…maybe they can offer a video game or cartoon too.
Article on Page 4B of July 7, 2010 of Marietta Daily Journal (MDJ), Sam's Club is now partnering with Superior Financial Group to make loans from $5,000 to $25,000 to small business members. Even with the small dollar amounts involved, I would suspect the Commercial Financial institutions will object to this and lobby against it.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
HR 3380 (Promoting Lending to America's Small Businesses Act) proposed that credit unions may double (from 12.5% to 25% of its capital) the amount of funds available to lend to businesses. Credit unions may also be able to provide other services like business checking and business credit cards.
This really ticks off the commercial banks who traditionally lend to businesses….Obviously, it’s competition (duh!).
Side note: Our credit union just went video – the new branch they moved to, with respect to security, has a video screen to chat with teller and air tube system that transports your transaction to another part of the facility…There is no human contact with the teller, just through a video screen an camera…maybe they can offer a video game or cartoon too.
Article on Page 4B of July 7, 2010 of Marietta Daily Journal (MDJ), Sam's Club is now partnering with Superior Financial Group to make loans from $5,000 to $25,000 to small business members. Even with the small dollar amounts involved, I would suspect the Commercial Financial institutions will object to this and lobby against it.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Monday, November 1, 2010
So how's HAMP (Home Affordable Modification Program) working out for you now?
4-15-2011: Only about 25% of 2.7 million homeowners (opposed to the 3-4 million promised to be modified) have received permanent modifications, but we're not sure how many of that 25% have redefaulted. Source: http://www.365days365plays.com/365-days-365-plays/7048
4-15-2011: HAMP was established with goal of mortgage relief for 3-4 million homeowners; 75% of homeowners receiving permanent modifications are expected to redefault (no wonder since debt-to-income ratios are about 63%); recent investigations revealed that 7% of 3 million homeowner applications through the five major loan servicers received permanent HAMP modifications; and $2 Billion has been allocated for US Treasury's Hardest Hit fund to help homeowners (some up to 12 months or $15K one time assistance such as in Alabama). Another $1 Billion HUD program will provide non-recourse loan(i.e., a percentage will be forgiven each year for x # of years)up to $50K to "distressed homeowners" in "targeted communities". Source: WSJ, 8-25-2010, A15.
3-1-2011: About 25% (680,0000/2,700,000) of homeowners applying for HAMP (started in 2009) have received loan modifications. WSJ 2-28-2011, A4.
NOTE: Approximately 6.7 million homes were foreclosed between 2000 and 2010.
1-15-2011: Only 170,000 of the 1.1 million homeowners who started the program have completed the loan modification.
11-20-2010: Over 50% of the 1.4 million applicants for HAMP that were approved for temporary modifications didn't qualify for permanent modifications. Neil Barofsky (inspector general overseeing TARP) thinks people were put into foreclosure that shouldn't have been; would have been better off had they never entered the program; and wrongly denied permanent loan modifications.
Update 10-27-2010: Watch the hearing about HAMP's "in"effectiveness - http://www.c-spanvideo.org/program/id/236346
Apparently about 15% of borrowers (398,000/1.3 million) who applied for the HAMP got help...another 520,000 have dropped out and about 45% (234,000) may have received loan restructuring with their loan company...but 286,000 homeowners weren't helped.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
4-15-2011: HAMP was established with goal of mortgage relief for 3-4 million homeowners; 75% of homeowners receiving permanent modifications are expected to redefault (no wonder since debt-to-income ratios are about 63%); recent investigations revealed that 7% of 3 million homeowner applications through the five major loan servicers received permanent HAMP modifications; and $2 Billion has been allocated for US Treasury's Hardest Hit fund to help homeowners (some up to 12 months or $15K one time assistance such as in Alabama). Another $1 Billion HUD program will provide non-recourse loan(i.e., a percentage will be forgiven each year for x # of years)up to $50K to "distressed homeowners" in "targeted communities". Source: WSJ, 8-25-2010, A15.
3-1-2011: About 25% (680,0000/2,700,000) of homeowners applying for HAMP (started in 2009) have received loan modifications. WSJ 2-28-2011, A4.
NOTE: Approximately 6.7 million homes were foreclosed between 2000 and 2010.
1-15-2011: Only 170,000 of the 1.1 million homeowners who started the program have completed the loan modification.
11-20-2010: Over 50% of the 1.4 million applicants for HAMP that were approved for temporary modifications didn't qualify for permanent modifications. Neil Barofsky (inspector general overseeing TARP) thinks people were put into foreclosure that shouldn't have been; would have been better off had they never entered the program; and wrongly denied permanent loan modifications.
Update 10-27-2010: Watch the hearing about HAMP's "in"effectiveness - http://www.c-spanvideo.org/program/id/236346
Apparently about 15% of borrowers (398,000/1.3 million) who applied for the HAMP got help...another 520,000 have dropped out and about 45% (234,000) may have received loan restructuring with their loan company...but 286,000 homeowners weren't helped.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Friday, October 29, 2010
FHA Kiddie Condo Loan
This type of mortgage allows a person to co-borrow with a blood relative (eg. parent, grandparent, sibling, etc.) who helps qualify for the loan using their income or assets. Both borrowers take title to the property and sign for the loan.
There are three big advantages to using this type of loan.
1. A low down payment (as little as 3% of the purchase price).
2. A lower, owner-occupied interest rate on the mortgage Vs the higher investment property interest rate.
3. Helps the new borrower establish a solid credit rating.
With a Kiddie Condo loan program, at least one borrower must occupy the property as his/her primary residence, but extra bedrooms could be rented out to help cover the cost of the mortgage payments. This is a perfect way for a college student, recent graduate, or anyone unable to obtain a loan on his/her own to buy a condo or townhome or single family home with the help of a family member
The tax benefits, such as deducting mortgage interest and real estate taxes on a Federal Income Tax return, can be divided among the owners, according to who pays the expense. See your tax advisor for details.
Kiddie Condo Loan
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
There are three big advantages to using this type of loan.
1. A low down payment (as little as 3% of the purchase price).
2. A lower, owner-occupied interest rate on the mortgage Vs the higher investment property interest rate.
3. Helps the new borrower establish a solid credit rating.
With a Kiddie Condo loan program, at least one borrower must occupy the property as his/her primary residence, but extra bedrooms could be rented out to help cover the cost of the mortgage payments. This is a perfect way for a college student, recent graduate, or anyone unable to obtain a loan on his/her own to buy a condo or townhome or single family home with the help of a family member
The tax benefits, such as deducting mortgage interest and real estate taxes on a Federal Income Tax return, can be divided among the owners, according to who pays the expense. See your tax advisor for details.
Make sure you read the section on credit as both borrowers must qualify. If the owner occupant has little or no credit you should review the "non traditional credit" section and pay particular attention to the information on the 2nd page.
Note that the property DOES NOT have to be a Condo. If it is a condo then you need to make sure that the project is approved or the that the property can get a "Spot approval".
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Wednesday, October 27, 2010
Commercial & Residential Real Estate (CRE) News & Updates
2-8-2011: Now the news seems rosey about Commercial Real Estate according to this article - but it seem the rosiness is based on buying foreclosed/depressed sale of commercial properties and the specific market of these properties so my conclusion is still...it all depends on which end of the market you sit whether things are good or bad - http://www.businessweek.com/news/2011-02-04/u-s-commercial-property-recovery-spares-economy.html
2-7-2011: WSJ, A2 - Office space vacancy rate is about 18%, delinquency rate of Commercial Mortgage Backed Securities (CMBS) is over 9%, and some think rental and occupancy rates will struggle along in the next 4 years. Not all gloom news - some investors are bidding up property values due to good deals and low interest rates but the US Government is encouraging banks to modify existing loans as alternatives to foreclosures to help retard the fall of property values.
2-7-2011: WSJ, A2 - Office space vacancy rate is about 18%, delinquency rate of Commercial Mortgage Backed Securities (CMBS) is over 9%, and some think rental and occupancy rates will struggle along in the next 4 years. Not all gloom news - some investors are bidding up property values due to good deals and low interest rates but the US Government is encouraging banks to modify existing loans as alternatives to foreclosures to help retard the fall of property values.
Commercial Indexes - Indexes (as different as night and day)
Green Street Advisors - Said Commercial Real Estate hit bottom in 2009 and is rising. They track 47 REITS with $400 billion of assets.
Moody's Investors Service - Said commercial real estate hasn't hit bottom yet. They track closed sales of at least $2.5 million.
Source: WSJ 10-13-2010, C11
RESIDENTIAL INDEXES
S&P Case Shiller home price index - 3 month average of home prices in 10 major metropolitan areas.
Federal Housing Finance Agency index which covers sales and refinancings of conventional mortgages purchased or securitized by Fannie Mae/Freddie Mac (which omits jumbo and subprime loans).
Source: WSJ 10-27-2010, A6
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Tuesday, October 26, 2010
Cobb County Restrictions on Parking...on the residential property
Cobb County Code (which complies with Georgia state OCGA 36-1-20) states that vehicles may not be parked on the grass or unimproved surface between the road and the home's front setback. Parking in a residential area normally allows only one vehicle, one boat, and recreational vehicle or any combination totalling three (3) in the rear or side yard on a hardened surface (concrete, asphalt, or tar & gravel mix). All tires must rest on a hardened surface.
Violations may result in jail not more than 60 days or fines from $100-1,000.
Visit www.cobbcounty.org/clerk for more details.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Violations may result in jail not more than 60 days or fines from $100-1,000.
Visit www.cobbcounty.org/clerk for more details.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Monday, October 25, 2010
NAR in Montana tries to BUY the removal of Transfer Taxes
UPDATE 10-27-2010: Missouri (one of 13 states not charging transfer taxes) is voting to permanently prohibit transfer taxes - Many surrounding states take in millions of dollars, but nobody is saying what the money is spent on regarding real estate in the state...
Source: http://www.columbiamissourian.com/stories/2010/10/26/surrounding-states-impose-forms-real-estate-transfer-taxes/
Apparently, money talks - especially when you want to change the constitution.
It is a noble effort for anyone to stand up and say "no more double taxation", but the NAR using money to buy the change is a little disconcerting.
Why wouldn't it be reconsidered and prohibited on its own merit? Ah, because it another "hidden source" of state tax revenue. And in Georgia, "it's only $1 per thousand of sales price" which till amounts to double taxation UNLESS it specifically funds regulation and oversight of the Georgia Real Estate Commission, state regulators and other agencies directly related to the protection of real property rights.
So ask your State Representative and Senator "why is there a transfer tax and why can't we eliminate it?"
Source: http://www.flatheadbeacon.com/articles/article/realtors_spend_2_million_on_real_estate_initiative/20243/
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Source: http://www.columbiamissourian.com/stories/2010/10/26/surrounding-states-impose-forms-real-estate-transfer-taxes/
Apparently, money talks - especially when you want to change the constitution.
It is a noble effort for anyone to stand up and say "no more double taxation", but the NAR using money to buy the change is a little disconcerting.
Why wouldn't it be reconsidered and prohibited on its own merit? Ah, because it another "hidden source" of state tax revenue. And in Georgia, "it's only $1 per thousand of sales price" which till amounts to double taxation UNLESS it specifically funds regulation and oversight of the Georgia Real Estate Commission, state regulators and other agencies directly related to the protection of real property rights.
So ask your State Representative and Senator "why is there a transfer tax and why can't we eliminate it?"
Source: http://www.flatheadbeacon.com/articles/article/realtors_spend_2_million_on_real_estate_initiative/20243/
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Friday, October 22, 2010
Fannie Mae & Freddie Mac News
This blog post will be updated from time to time.
2-20-2012: Freddie Mac issues policy statement to mortgage servicers of Freddie Mac loans that unemployed homeowners (representing about 10% of Freddie Mac's mortgage delinquencies) can have up to 12 months of suspended mortgage payments. Source: http://www.pe.com/business/business-headlines/20120106-real-estate-freddie-mac-extends-forbearance-for-jobless-borrowers.ece
2-19-2012: Do you think Fannie, Freddie, or the Federal Housing Finance Agency is more interested in big bank welfare or taxpayer welfare by not getting a better settlement from the major banks? My big question is: What kind of due diligence did Fannie and Freddie perform when buying any toxic mortgage loans or securities? Also, my question is: Why ask the taxpayers for another effective bailout to drop the loan balances unless they are liens against future sales prices to recapture losses for the taxpayers?
Source: http://www.huffingtonpost.com/peter-s-goodman/freddie-mac-report-_b_983412.html
3-14-2011: The SEC is investigating whether Fannie & Freddie had properly & timely reported their exposure to subprime mortgage loans. Also, Republicans in Congress are drafting proposals to eventually eliminate Fannie & Freddie - Fannie & Freddie have estimated combined portfolio of about $1.5 Trillion and guarantee about $5 Trillion of mortgage loans.
3-11-2011: According to the Wall Street Journal (3-1-2011,C1) both Fannie Mae and Freddie Mac are borrowing money from the US Treasury to pay their preferred dividends..to the US Treasury...does this make sense?
3-7-2011: The Securities and Exchange Commission (SEC) issued a Wells Notice to investigate Freddie whether the company violated federal securities laws.
(NOTE to the Insane: Freddie wants to borrow $500 million from the Treasury to remain solvent after already paying the Treasury Department $1.6 Billion in dividends. Fannie Mae may require $2.6 Billion to cover cost of dividend payments to the Treasury. Is this a great country or what? WSJ, 2-25-2011, C7)
3-7-2011: Interesting - Fannie & Freddie have total portfolio of $1.4 Trillion in home mortgages - They plan to reduce their portfolio by 10% each year. (WSJ, 2-9-2011, A4) (Comment: I don't think that will happen - Who will buy the loans? The loans better be good quality, but what is good quality today - may be crap tomorrow.)
2-15-11: I don't believe Fannie and Freddie were as a large a problem (they were a big part but the private market was worse at times) as the securitization process was to push us into a big slide. We all saw the writing on the wall that home prices were climbing faster than we could justify the price. No matter which way we establish the mortgage market in the future, it's gonna take one mean mo-fo regulator to manage to watch every move and warn all involved that there's any problems that need correcting. So which regulatory body in the US Government has done that good of a job in the past - I say the U.S. Marines, and they can "fire at will" once they contact the enemy!
1-11-2011: However Fannie and Freddie are structured from ...now on, here's what they're faced with - in the current home price decline, there are 19 million subprime mortgages supported by the Federal Government (i..e., the taxpayer) - (12 million delinquent Fannie Mae/Freddie Mac foreclosures; 5 million FHA insured properties; 2.2 million mortgages held by banks under the Community Reinvestment Act (CRA) requirements. NOTE: About 8 million were securitize by various lenders. The Federal Housing Finance Agency (formerly part of the Office of Federal Housing Oversight Committee), the US Government Agency in charge of overseeing Fannie and Freddie, estimates the final cost of bailing Fannie/Freddie out is as high as $363 Billion (right now we're at at least $148 billion).
See the Financial Crisis Inquiry Commission on Cspan for more details.
12-29-2010: Sounds like the Republicans (who were clamouring to Obama about restructure Fannie and Freddie during the Frank Dodd discussions in more privatization and fast) are now back tracking and saying that we should slow down and lose the Federal grip over time. The House Financial Services Committee in the next Congressional session (112th Congress) is set to tackle the restructuring - and some suggest gradual lowering over time of limits insured by the Federal Government.
12-26-2010: How should Fannie Mae-Freddie Mac be structured in the future? The Treasury Department has a January 2011 deadline to propose a revised system to Congress. Should it be limited guarantees of loans? No guarantees? All or nothing? Both Fannie and Freddie have announced increased risk based fees to lenders in 2011, raising the cost of loans to borrowers. There maybe lower loan limits limiting exposure to taxpayers
Note: Fannie and Freddie guarantee about 50% of the $10.6 trillion in home mortgages.
12-26-2010: The Obama administration is pressuring Fannie and Freddie through their regulatory agency (Federal Housing Finance Agency (FHFA)) to accept a program run by the Federal Housing Authority (FHA) to write down mortgages and hand them to the FHA. Only 3 loan modification out of 61 applications in the first 6 months. Some say loan modifications aren't doing enough (no duh!). Only 10 of 120,000 loans were modified by Fannie and Freddie in the first 6 months of 2010. Fannie and Freddie are hesitant to reduce loan balances due to limitations of option to recoup losses later. The FHA program is open to borrowers who "aren't" behind on their mortgage payments. Also, banks were able to receive subsidies if they wrote down mortgages of borrowers who owed at least 15% more than their homes were worth. Source: WSJ, 12-8-2010, A2.
Note: An estimated 11 million homeowners (about 23% of all homeowners) are under water (i.e., owe more than their homes are worth).
11-12-2010: An interesting OP-ED piece in the WSJ 11-11-2010 (A19) gave a plan of how Fannie and Freddie could be unleashed on a gradual basis during an 8 year period which may allow the private market to pick up the slack. It's certainly going to be interesting if Fannie and Freddie ever become privatized or a piece held in US Government control. I would hope privatization with strong oversight, but you know how that tune could play out - just as bad as it has before under Government control with Government oversight. We definitely need a good watchdog and a Congress that responds. And additional transparency wouldn't hurt either.
11-4-2010: MDJ 11-4-2010, 6B - $4.1 billion loss for 3Q10 and requested an additional $100 million (less than the $1.8 billion last quarter) in federal assistance.
Fannie Mae and Freddie Mac (who owns or guarantees about 50% of all US mortgages) are planning to design an indemnification agreement (perhaps similar to the Bank of America - Fidelity National agreement covering clean foreclosures---but leaves B of A exposed to extra losses).
Fannie and Freddie may end up costing the US taxpayers $259 billion (currently has cost about $150 billion). (WSJ 10-23-2010, B2)...As a comparison, according to Treasury Department $50 billion was shelled out for financial and auto company bailouts.
Fannie May (in August 2010) notified loan servicers they could face fines if foreclosures became unreasonably long. (WSJ 10-230-2010, B2)
Federal Housing Finance Agency (FHFA Chief Edward DeMarco----Joseph A Smith Jr was just appointed per Op-Ed 11-15-2010, A16) is Fannie's and Freddie's regulator is seeking legal assistance in recovering billions in mortgage backed securities that have now foreclosed that were purchased from banks and financial institutions. (WSJ, 10-21-2010, C1)
Fannie & Freddie purchased privately issued securities (about $227) billion as investments backed by subprime and other riky loans in 2006 and 2007.
9-17-2010: Fannie/Freddie taken over 191,000 homes as of 6-30-2010 and till taking them in faster than selling them; Fannie took a $13 Billion charge for carrying costs in 2Q10; lenders are taking too long to reclaim homes shadow inventory around 4 million homes; Fannie & Freddie are trying not to dump as many homes on market at one time to lower values in a neighborhood; Fannie plans to test foreclosure rentals in Chicago; Fannie offers HomePath mortgages at 3% down payment - no PMI on their own foreclosed properties.
8-7-2010: Rep.Spencer Bachus (R) has asked Rep Barney Frank for a hearing into the firing of Caroline Herron (former Fannie Mae Executive) ...Apparently, (according to the 8-7-10 AJC), she was fired after she criticized how the company was running a loan assistance program....She asked that the borrower provide proof of income and these requests were ignored....
Yeah, let's see if (a) Rep Frank holds a hearing and (b) if the real truth is told...I think I know the answer to both concerns...
8-6-2010: Fannie Mae and and Freddie Mac tighten lending standards since 2008 and lo and behold, since then those loans are performing better than any loan in the past decade...well, duh!
8-6-2010: So far, Fannie Mae & Freddie Mac have required $146 billion of taxpayer resources to cover losses ... so far.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
2-20-2012: Freddie Mac issues policy statement to mortgage servicers of Freddie Mac loans that unemployed homeowners (representing about 10% of Freddie Mac's mortgage delinquencies) can have up to 12 months of suspended mortgage payments. Source: http://www.pe.com/business/business-headlines/20120106-real-estate-freddie-mac-extends-forbearance-for-jobless-borrowers.ece
2-19-2012: Do you think Fannie, Freddie, or the Federal Housing Finance Agency is more interested in big bank welfare or taxpayer welfare by not getting a better settlement from the major banks? My big question is: What kind of due diligence did Fannie and Freddie perform when buying any toxic mortgage loans or securities? Also, my question is: Why ask the taxpayers for another effective bailout to drop the loan balances unless they are liens against future sales prices to recapture losses for the taxpayers?
Source: http://www.huffingtonpost.com/peter-s-goodman/freddie-mac-report-_b_983412.html
3-14-2011: The SEC is investigating whether Fannie & Freddie had properly & timely reported their exposure to subprime mortgage loans. Also, Republicans in Congress are drafting proposals to eventually eliminate Fannie & Freddie - Fannie & Freddie have estimated combined portfolio of about $1.5 Trillion and guarantee about $5 Trillion of mortgage loans.
3-11-2011: According to the Wall Street Journal (3-1-2011,C1) both Fannie Mae and Freddie Mac are borrowing money from the US Treasury to pay their preferred dividends..to the US Treasury...does this make sense?
3-7-2011: The Securities and Exchange Commission (SEC) issued a Wells Notice to investigate Freddie whether the company violated federal securities laws.
(NOTE to the Insane: Freddie wants to borrow $500 million from the Treasury to remain solvent after already paying the Treasury Department $1.6 Billion in dividends. Fannie Mae may require $2.6 Billion to cover cost of dividend payments to the Treasury. Is this a great country or what? WSJ, 2-25-2011, C7)
3-7-2011: Interesting - Fannie & Freddie have total portfolio of $1.4 Trillion in home mortgages - They plan to reduce their portfolio by 10% each year. (WSJ, 2-9-2011, A4) (Comment: I don't think that will happen - Who will buy the loans? The loans better be good quality, but what is good quality today - may be crap tomorrow.)
2-15-11: I don't believe Fannie and Freddie were as a large a problem (they were a big part but the private market was worse at times) as the securitization process was to push us into a big slide. We all saw the writing on the wall that home prices were climbing faster than we could justify the price. No matter which way we establish the mortgage market in the future, it's gonna take one mean mo-fo regulator to manage to watch every move and warn all involved that there's any problems that need correcting. So which regulatory body in the US Government has done that good of a job in the past - I say the U.S. Marines, and they can "fire at will" once they contact the enemy!
1-11-2011: However Fannie and Freddie are structured from ...now on, here's what they're faced with - in the current home price decline, there are 19 million subprime mortgages supported by the Federal Government (i..e., the taxpayer) - (12 million delinquent Fannie Mae/Freddie Mac foreclosures; 5 million FHA insured properties; 2.2 million mortgages held by banks under the Community Reinvestment Act (CRA) requirements. NOTE: About 8 million were securitize by various lenders. The Federal Housing Finance Agency (formerly part of the Office of Federal Housing Oversight Committee), the US Government Agency in charge of overseeing Fannie and Freddie, estimates the final cost of bailing Fannie/Freddie out is as high as $363 Billion (right now we're at at least $148 billion).
See the Financial Crisis Inquiry Commission on Cspan for more details.
12-29-2010: Sounds like the Republicans (who were clamouring to Obama about restructure Fannie and Freddie during the Frank Dodd discussions in more privatization and fast) are now back tracking and saying that we should slow down and lose the Federal grip over time. The House Financial Services Committee in the next Congressional session (112th Congress) is set to tackle the restructuring - and some suggest gradual lowering over time of limits insured by the Federal Government.
12-26-2010: How should Fannie Mae-Freddie Mac be structured in the future? The Treasury Department has a January 2011 deadline to propose a revised system to Congress. Should it be limited guarantees of loans? No guarantees? All or nothing? Both Fannie and Freddie have announced increased risk based fees to lenders in 2011, raising the cost of loans to borrowers. There maybe lower loan limits limiting exposure to taxpayers
Note: Fannie and Freddie guarantee about 50% of the $10.6 trillion in home mortgages.
12-26-2010: The Obama administration is pressuring Fannie and Freddie through their regulatory agency (Federal Housing Finance Agency (FHFA)) to accept a program run by the Federal Housing Authority (FHA) to write down mortgages and hand them to the FHA. Only 3 loan modification out of 61 applications in the first 6 months. Some say loan modifications aren't doing enough (no duh!). Only 10 of 120,000 loans were modified by Fannie and Freddie in the first 6 months of 2010. Fannie and Freddie are hesitant to reduce loan balances due to limitations of option to recoup losses later. The FHA program is open to borrowers who "aren't" behind on their mortgage payments. Also, banks were able to receive subsidies if they wrote down mortgages of borrowers who owed at least 15% more than their homes were worth. Source: WSJ, 12-8-2010, A2.
Note: An estimated 11 million homeowners (about 23% of all homeowners) are under water (i.e., owe more than their homes are worth).
11-12-2010: An interesting OP-ED piece in the WSJ 11-11-2010 (A19) gave a plan of how Fannie and Freddie could be unleashed on a gradual basis during an 8 year period which may allow the private market to pick up the slack. It's certainly going to be interesting if Fannie and Freddie ever become privatized or a piece held in US Government control. I would hope privatization with strong oversight, but you know how that tune could play out - just as bad as it has before under Government control with Government oversight. We definitely need a good watchdog and a Congress that responds. And additional transparency wouldn't hurt either.
11-4-2010: MDJ 11-4-2010, 6B - $4.1 billion loss for 3Q10 and requested an additional $100 million (less than the $1.8 billion last quarter) in federal assistance.
Fannie Mae and Freddie Mac (who owns or guarantees about 50% of all US mortgages) are planning to design an indemnification agreement (perhaps similar to the Bank of America - Fidelity National agreement covering clean foreclosures---but leaves B of A exposed to extra losses).
Fannie and Freddie may end up costing the US taxpayers $259 billion (currently has cost about $150 billion). (WSJ 10-23-2010, B2)...As a comparison, according to Treasury Department $50 billion was shelled out for financial and auto company bailouts.
Fannie May (in August 2010) notified loan servicers they could face fines if foreclosures became unreasonably long. (WSJ 10-230-2010, B2)
Federal Housing Finance Agency (FHFA Chief Edward DeMarco----Joseph A Smith Jr was just appointed per Op-Ed 11-15-2010, A16) is Fannie's and Freddie's regulator is seeking legal assistance in recovering billions in mortgage backed securities that have now foreclosed that were purchased from banks and financial institutions. (WSJ, 10-21-2010, C1)
Fannie & Freddie purchased privately issued securities (about $227) billion as investments backed by subprime and other riky loans in 2006 and 2007.
9-17-2010: Fannie/Freddie taken over 191,000 homes as of 6-30-2010 and till taking them in faster than selling them; Fannie took a $13 Billion charge for carrying costs in 2Q10; lenders are taking too long to reclaim homes shadow inventory around 4 million homes; Fannie & Freddie are trying not to dump as many homes on market at one time to lower values in a neighborhood; Fannie plans to test foreclosure rentals in Chicago; Fannie offers HomePath mortgages at 3% down payment - no PMI on their own foreclosed properties.
8-7-2010: Rep.Spencer Bachus (R) has asked Rep Barney Frank for a hearing into the firing of Caroline Herron (former Fannie Mae Executive) ...Apparently, (according to the 8-7-10 AJC), she was fired after she criticized how the company was running a loan assistance program....She asked that the borrower provide proof of income and these requests were ignored....
Yeah, let's see if (a) Rep Frank holds a hearing and (b) if the real truth is told...I think I know the answer to both concerns...
8-6-2010: Fannie Mae and and Freddie Mac tighten lending standards since 2008 and lo and behold, since then those loans are performing better than any loan in the past decade...well, duh!
8-6-2010: So far, Fannie Mae & Freddie Mac have required $146 billion of taxpayer resources to cover losses ... so far.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.
Who's going to jail or getting fined over real estate/mortgage crimes?
This BLOG post will be updated on an ongoing basis to update you on who's paying for their behavior. My guess is probably not enough people and not enough pain...
Public hanging or medieval stockades anyone?
(Does it seem like alot of little fish are caught, but not the big fish?)
2-22-2012: San Bernardino man is guilty of real estate scam involving promising to help home owners avoid foreclosure and gets $6 million fine and to serve 12 years in federal prison. Source: http://www.utsandiego.com/news/2012/feb/21/man-sent-prison-real-estate-scam/
2-18-2012: Minnesota businessman sentenced to 12 years for $226 million fraudulent development.
Source: http://www.startribune.com/business/139519448.html
2-7-0212: Family of real estate agents in Springfield MO sentenced to prison and fined >$4 million in restitution for mortgage fraud. Source: http://www.kspr.com/news/local/kspr-monett-family-of-real-estate-agents-sentenced-in-11-million-dollar-mortgage-fraud-20120206,0,373444.story
2-3-2012: Real estate agent & mortgage broker guilty of mortgage fraud in Las Vegas.
Source: http://www.legalnewsline.com/news/235120-real-estate-agent-mortgage-broker-found-guilty-of-fraud
1-27-2012: Birmingham man sentenced to 5 year in prison & over $500,000 in fines & restitution. Source: http://blog.al.com/spotnews/2012/01/birmingham_man_sentenced_in_fr.html
1-19-2012: Former real estate and mortgage broker awaits sentencing upon guilty verdict for embezzeling >$500,000. Source: http://www.santacruzsentinel.com/localnews/ci_19778676
1-18-2012: 4 out of 5 already get sentence and owe >$11 million in restitution in Florida mortgage fraud case. Source: http://www.loansafe.org/parkland-real-estate-agent-pleads-guilty-to-mortgage-fraud
1-16-12: North Carolina attorney sentenced to 14 months in prison for mortgage fraud.
Source: http://www.fbi.gov/charlotte/press-releases/2011/fayetteville-attorney-sentenced-for-mortgage-fraud
1-12-12: 2 of 10 people in Atlanta, Georgia area plead guilty of mortgage fraud -
Source: http://www.coosavalleynews.com/np94876.htm
1-11-2012: Man gets 13 years of prison over $1 million mortgage fraud scheme - Source: http://www.fayobserver.com/articles/2012/01/11/1149735?sac=Bus
12-22-2011: Cleveland Ohio Crook - Sentencing includes both some form of restitution and jail (maybe 6-16 years). Source: http://www.clevelandjewishnews.com/news/local/article_cbd26c8a-2cbf-11e1-b482-0019bb2963f4.html
12-21-2011: Wow, only one Canadian real estate agent gets convicted of tax evasion. Does this mean NO US real estate agent ever got convicted? Source: http://www.benzinga.com/pressreleases/11/12/m2217245/real-estate-agent-fined-93-679-for-tax-evasion
12-19-2011: Iowa Real Estate Agent sentenced to 2 years in prison for wire fraud.
Source: http://qctimes.com/news/local/real-estate-agent-sentenced-for-mortgage-fraud/article_3051a97e-2a71-11e1-ba31-001871e3ce6c.html
12-15-2011: Mortgage fraud trial ready to wrap up -
Source: http://blog.al.com/live/2011/12/mortgage_fraud_trial_defense_c.html
12-15-2011: Internet auction fraud - http://www.fbi.gov/birmingham/press-releases/2011/illinois-man-pleads-guilty-to-internet-auction-real-estate-scam
12-5-2011: Alabama real estate investor pleads guilty of rigging bids mail fraud relating to real estate auctions. Source: http://7thspace.com/headlines/401399/alabama_real_estate_investor_agrees_to_plead_guilty_to_conspiracy_to_rig_bids_for_the_purchase_of_real_estate_at_public_foreclosure_auctions.html
11-23-2011: Real estate investor convicted of Wire and Bank Fraud for up to $6.5 million in funds and may serve up to 30 years and fine of up to $1 million. Source: http://7thspace.com/headlines/400551/real_estate_investor_convicted_for_leading_a_mortgage_fraud_conspiracy.html
11-8-2011: Former PA real estate agent convicted of wire fraud and money laundering involving 30+ homebuyers and over $6 million - http://www.abc27.com/story/15980916/former-real-estate-agent-convicted-of-money-laundering-wire-fraud
11-2-2011: Another person convicted of defrauding lenders and laundering money and faces 20-30 years in prison. - Source: http://newsandinsight.thomsonreuters.com/Legal/News/2011/11_-_November/Federal_jury_convicts_lawyer_in_real-estate_scam/
10-20-2011: Man from Sacramento convicted on $1+ million fraud - collected money to buy real estate and develop property but oops...he pocketed some money instead - what a guy! - Source: http://www.bizjournals.com/sacramento/news/2011/10/18/sacramento-man-prison-real-estaste-fraud.html
10-20-2011: Former real estate agent maybe sentenced to 13+ years for scam - collected near $1 million to be used to purchase real estate but didn't. - Source: http://www.wavenewspapers.com/news/local/132209508.html
10-15-2011: Real estate agent sentenced (after < 2 hours by Jury) to 8+ years in jail for $43 million mortgage fraud in Minnesota. Source: http://www.twincities.com/business/ci_19104689
10-13-2011: HUD suspends former President of Lend America from doing any business with HUD due to mortgage fraud scheme - it seems money collected to pay off loans being refinanced were channeled for unrelated purposes. Source: http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2011/HUDNo.11-250
10-6-2011: Real estate agent was one of 19 defendants involved in a $12+ million inflated mortgage fraud scheme and got >$5 million fine and <2 years jail time. Source: http://www.forbes.com/feeds/ap/2011/10/03/general-mo-mortgage-fraud-sentence_8714539.html
9-16-2011: Man to serve more than 4 years of jail for >$5million mortgage fraud involving people using 100% financing. Source: http://www.lcsun-news.com/las_cruces-news/ci_18899795
9-8-2011: Man pleads guilty to $5 million mortgage scam/mail fraud in Sacramento and will serve 5 years. Source: http://www.egcitizen.com/articles/2011/09/06/news/doc4e66c34b0a658071704782.txt
http://www.statejournal.com/story.cfm?func=viewstory&storyid=106723
8-27-2011: Another Alabama fraudster files false loan applications for Condominiums and 2nd mortgage and took over $1 million. Source: http://realestate.bryanellis.com/5068/real-estate-scam-of-the-day-alabama-real-estate-scam-mastermind-pleads-guilty/
8-26-2011: Missouri developer guilty of million $ bank fraud scheme involving false vouchers. Source: http://www.bizjournals.com/stlouis/news/2011/08/26/st-charles-county-developer-sentenced.html
8-24-2011: Man pleads guilty to multi million dollar mortgage scam - some realtors and buyers were inolved too. Source: http://blog.al.com/live/2011/08/alleged_mastermind_of_baldwin.html
8-24-2011: Fourth person (former loan officer) pleads guilty in a Kentucky mortgage fraud scheme that ultimately totalled millions of dollars.
Source: http://www.loansafe.org/fourth-person-pleads-guilty-in-central-kentucky-mortgage-scam
8-19-2011: Former New York real estate agent/loan officer indicted by federal grand jury in $50 million mortgage fraud scheme and if convicted, may face fines and 3 years in jail.
Source: http://www.fbi.gov/newyork/press-releases/2011/real-estate-agent-indicted-in-50-million-mortgage-fraud-scheme
8-9-2011: Minnesota closing agent gets >5 years prison for $1.2M fraud case. Source: http://tcbmag.blogs.com/daily_developments/2011/08/real-estate-exec-gets-max-sentence-for-12m-fraud.html
8-5-2011: 3 people were charged in a $2.5 million scheme involving loan modifications - Source: http://www.loansafe.org/three-real-estate-workers-charged-in-miami-for-stealing-2-5-million-in-loan-modification-scheme
8-5-2011: 14 people were charged in a $58 million mortgage fraud scheme involving receipt of money in exchange for false paperwork on mortgages. Source: http://blogs.wsj.com/law/2011/08/04/real-estate-woes-five-lawyers-busted-in-58m-mortgage-fraud-scheme/
7-27-2011: Former Mortgage Company owner convicted of money laundering, mail fraud $30 million real estate fraud. Source: http://www.denverpost.com/business/ci_18525859
7-27-2011: Real estate securities fraud results in man being sentenced to >200 month and $1.9 million fine. Source: http://www.loansafe.org/fugitive-texas-real-estate-fraudster-sentenced-to-more-than-17-years-in-prison
7-26-2011: Alleged >$5 million mortgage fraud committed by former Minnesota real estate agent Source: http://www.loansafe.org/former-minnesota-female-real-estate-broker-charged-in-mortgage-fraud-scheme
7-26-2011: Connecticut real estate agent goes to jail for mortgage short sale fraud.
Source: http://realtybiznews.com/short-sale-fraud-agent-jailed/9874323/
7-24-2011: Wells Fargo gets fined $85 Million (a small pittance of the Billions in economic losses we all suffered in the mortgage fiasco) by the Federal Reserve Board for mortgage fraud related behavior by selling higher rate loans to >10,000 people who should have qualified for lower rates. Can you say "Yield Spread Premium"? Source: http://agentgenius.com/real-estate-news-events/wells-fargo-fined-85-for-abusive-practices-of-thousands-of-borrowers/
7-22-2011: This mortgage schmuck and his ponzi scheme gives bad image to the industry, but where was due diligence of investors? The theory: "If it's too good to be true, it usually is" remains a constant! Source: http://www.denverpost.com/business/ci_18525859
7-21-2011: Real estate agent in Idaho convicted of lying to lender - sentenced to >5 total years and fined. Source: http://www.greenfieldreporter.com/view/story/925722b9bbbd4f94af06f715ed9e146b/ID--Mortgage-Fraud-Sentence/
7-14-201: Two more involved with Taylor, Bean, Whitaker debacle were sentenced to jail time in addition to a $1.6 settlement - so far...Source: https://www.fis.dowjones.com/WebBlogs.aspx?aid=DJFDBR0020110712e77c000dx%20&ProductIDFromApplication=&r=wsjblog&s=djfdbr
7-13-11: Prospect Mortgage agrees to $3+ million fine involving FHA and kickbacks to real estate brokers. Source: http://www.inman.com/news/2011/07/13/hud-lender-paid-kickbacks-real-estate-brokers-agents
7-13-11: Two former real estate agents committed and admitted to $11 Million in mortgage fraud. Source: http://ozarksfirst.com/fulltext?nxd_id=487207
7-13-11: Real state agent convicted of mail fraud to serve 4+ years. Source:http://www2.timesdispatch.com/news/2011/jul/13/6/richmond-real-estate-agent-be-sentenced-fraud-sche-ar-1169735/
7-6-2011: Real Estate agent lies....and that's news? Well, it is in this case and when you lie to HUD - http://www.star-telegram.com/2011/07/06/3203853/fort-worth-real-estate-agent-faked.html
6-29-2011: Man sells houses that didn't exist. (Note: To whom would you sell - people that didn't exist? And where was the due diligence of the Buyers? I think there's contributory negligence here - isn't there always when stupid Buyers meet shifty sellers?)
Source: http://alabama.realestaterama.com/2011/06/29/birmingham-man-faces-mortgage-fraud-charges-for-selling-houses-he-did-not-own-ID0124.html
6-24-2011: Real estate attorney charged with mortgage fraud - gets 3 years of supervised release. Source: http://www.northcountrygazette.org/2011/06/23/kaplan_fraud/
6-21-2011: A former Colonial Bank executive was sentenced to eight (8) years in a federal prison related to Taylor, Bean & Whitaker Mortgage Corp fraud scheme.
Source: http://www.biggerpockets.com/renewsblog/2011/06/17/real-estate-news-by-the-numbers-week-of-june-11-june-17/
(Does it seem like alot of little fish are caught, but not the big fish?)
Here's an article outlining winners and losers from the mortgage meltdown - just to name a few: http://www.8newsnow.com/story/16049641/foreclosure-crisis-the-winners-and-losers
Yes, 49/50 states settled the lawsuit against largest US banks (see AG settlement ), but $26 Billion against a $1 Trillion mortgage fiasco and nobody of significance is in jail? Where are the derivative traders who failed in their Due Diligence responsibility? Or designers of CDOs who failed to disclose the real risks?
3-21-2012: Virginia man pleads guilty and gets $250K fine and may serve 3-20 years for real estate investment fraud. Source: http://www2.timesdispatch.com/business/2012/mar/21/david-silver-pleads-guilty-in-real-estate-investme-ar-1779889/
3-4-2012: 70 year old Tucson real estate agent gets 8 months and $700,000 in restitution for mortgage fraud. Source: http://www.vadvert.co.uk/government/22268-70-year-old-tuscon-real-estate-agent-sentenced-to-prison-for-mortgage-fraud.html
2-22-2012: Five people plead guilty in Cleveland, Ohio area to mortgage fraud involving $50 million mortgage scam from 500 real estate transactions. Source: http://www.wtam.com/cc-common/news/sections/newsarticle.html?feed=122520&article=9536914
3-21-2012: Virginia man pleads guilty and gets $250K fine and may serve 3-20 years for real estate investment fraud. Source: http://www2.timesdispatch.com/business/2012/mar/21/david-silver-pleads-guilty-in-real-estate-investme-ar-1779889/
3-4-2012: 70 year old Tucson real estate agent gets 8 months and $700,000 in restitution for mortgage fraud. Source: http://www.vadvert.co.uk/government/22268-70-year-old-tuscon-real-estate-agent-sentenced-to-prison-for-mortgage-fraud.html
2-22-2012: Five people plead guilty in Cleveland, Ohio area to mortgage fraud involving $50 million mortgage scam from 500 real estate transactions. Source: http://www.wtam.com/cc-common/news/sections/newsarticle.html?feed=122520&article=9536914
2-22-2012: San Bernardino man is guilty of real estate scam involving promising to help home owners avoid foreclosure and gets $6 million fine and to serve 12 years in federal prison. Source: http://www.utsandiego.com/news/2012/feb/21/man-sent-prison-real-estate-scam/
2-18-2012: Minnesota businessman sentenced to 12 years for $226 million fraudulent development.
Source: http://www.startribune.com/business/139519448.html
2-7-0212: Family of real estate agents in Springfield MO sentenced to prison and fined >$4 million in restitution for mortgage fraud. Source: http://www.kspr.com/news/local/kspr-monett-family-of-real-estate-agents-sentenced-in-11-million-dollar-mortgage-fraud-20120206,0,373444.story
2-3-2012: Real estate agent & mortgage broker guilty of mortgage fraud in Las Vegas.
Source: http://www.legalnewsline.com/news/235120-real-estate-agent-mortgage-broker-found-guilty-of-fraud
1-27-2012: Birmingham man sentenced to 5 year in prison & over $500,000 in fines & restitution. Source: http://blog.al.com/spotnews/2012/01/birmingham_man_sentenced_in_fr.html
1-19-2012: Former real estate and mortgage broker awaits sentencing upon guilty verdict for embezzeling >$500,000. Source: http://www.santacruzsentinel.com/localnews/ci_19778676
1-18-2012: 4 out of 5 already get sentence and owe >$11 million in restitution in Florida mortgage fraud case. Source: http://www.loansafe.org/parkland-real-estate-agent-pleads-guilty-to-mortgage-fraud
1-16-12: North Carolina attorney sentenced to 14 months in prison for mortgage fraud.
Source: http://www.fbi.gov/charlotte/press-releases/2011/fayetteville-attorney-sentenced-for-mortgage-fraud
1-12-12: 2 of 10 people in Atlanta, Georgia area plead guilty of mortgage fraud -
Source: http://www.coosavalleynews.com/np94876.htm
1-11-2012: Man gets 13 years of prison over $1 million mortgage fraud scheme - Source: http://www.fayobserver.com/articles/2012/01/11/1149735?sac=Bus
12-22-2011: Cleveland Ohio Crook - Sentencing includes both some form of restitution and jail (maybe 6-16 years). Source: http://www.clevelandjewishnews.com/news/local/article_cbd26c8a-2cbf-11e1-b482-0019bb2963f4.html
12-21-2011: Wow, only one Canadian real estate agent gets convicted of tax evasion. Does this mean NO US real estate agent ever got convicted? Source: http://www.benzinga.com/pressreleases/11/12/m2217245/real-estate-agent-fined-93-679-for-tax-evasion
12-19-2011: Iowa Real Estate Agent sentenced to 2 years in prison for wire fraud.
Source: http://qctimes.com/news/local/real-estate-agent-sentenced-for-mortgage-fraud/article_3051a97e-2a71-11e1-ba31-001871e3ce6c.html
12-15-2011: Mortgage fraud trial ready to wrap up -
Source: http://blog.al.com/live/2011/12/mortgage_fraud_trial_defense_c.html
12-15-2011: Internet auction fraud - http://www.fbi.gov/birmingham/press-releases/2011/illinois-man-pleads-guilty-to-internet-auction-real-estate-scam
12-5-2011: Alabama real estate investor pleads guilty of rigging bids mail fraud relating to real estate auctions. Source: http://7thspace.com/headlines/401399/alabama_real_estate_investor_agrees_to_plead_guilty_to_conspiracy_to_rig_bids_for_the_purchase_of_real_estate_at_public_foreclosure_auctions.html
11-23-2011: Real estate investor convicted of Wire and Bank Fraud for up to $6.5 million in funds and may serve up to 30 years and fine of up to $1 million. Source: http://7thspace.com/headlines/400551/real_estate_investor_convicted_for_leading_a_mortgage_fraud_conspiracy.html
11-8-2011: Former PA real estate agent convicted of wire fraud and money laundering involving 30+ homebuyers and over $6 million - http://www.abc27.com/story/15980916/former-real-estate-agent-convicted-of-money-laundering-wire-fraud
11-2-2011: Another person convicted of defrauding lenders and laundering money and faces 20-30 years in prison. - Source: http://newsandinsight.thomsonreuters.com/Legal/News/2011/11_-_November/Federal_jury_convicts_lawyer_in_real-estate_scam/
10-20-2011: Man from Sacramento convicted on $1+ million fraud - collected money to buy real estate and develop property but oops...he pocketed some money instead - what a guy! - Source: http://www.bizjournals.com/sacramento/news/2011/10/18/sacramento-man-prison-real-estaste-fraud.html
10-20-2011: Former real estate agent maybe sentenced to 13+ years for scam - collected near $1 million to be used to purchase real estate but didn't. - Source: http://www.wavenewspapers.com/news/local/132209508.html
10-15-2011: Real estate agent sentenced (after < 2 hours by Jury) to 8+ years in jail for $43 million mortgage fraud in Minnesota. Source: http://www.twincities.com/business/ci_19104689
10-13-2011: HUD suspends former President of Lend America from doing any business with HUD due to mortgage fraud scheme - it seems money collected to pay off loans being refinanced were channeled for unrelated purposes. Source: http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2011/HUDNo.11-250
10-6-2011: Real estate agent was one of 19 defendants involved in a $12+ million inflated mortgage fraud scheme and got >$5 million fine and <2 years jail time. Source: http://www.forbes.com/feeds/ap/2011/10/03/general-mo-mortgage-fraud-sentence_8714539.html
9-16-2011: Man to serve more than 4 years of jail for >$5million mortgage fraud involving people using 100% financing. Source: http://www.lcsun-news.com/las_cruces-news/ci_18899795
9-8-2011: Man pleads guilty to $5 million mortgage scam/mail fraud in Sacramento and will serve 5 years. Source: http://www.egcitizen.com/articles/2011/09/06/news/doc4e66c34b0a658071704782.txt
http://www.statejournal.com/story.cfm?func=viewstory&storyid=106723
8-27-2011: Another Alabama fraudster files false loan applications for Condominiums and 2nd mortgage and took over $1 million. Source: http://realestate.bryanellis.com/5068/real-estate-scam-of-the-day-alabama-real-estate-scam-mastermind-pleads-guilty/
8-26-2011: Missouri developer guilty of million $ bank fraud scheme involving false vouchers. Source: http://www.bizjournals.com/stlouis/news/2011/08/26/st-charles-county-developer-sentenced.html
8-24-2011: Man pleads guilty to multi million dollar mortgage scam - some realtors and buyers were inolved too. Source: http://blog.al.com/live/2011/08/alleged_mastermind_of_baldwin.html
8-24-2011: Fourth person (former loan officer) pleads guilty in a Kentucky mortgage fraud scheme that ultimately totalled millions of dollars.
Source: http://www.loansafe.org/fourth-person-pleads-guilty-in-central-kentucky-mortgage-scam
8-19-2011: Former New York real estate agent/loan officer indicted by federal grand jury in $50 million mortgage fraud scheme and if convicted, may face fines and 3 years in jail.
Source: http://www.fbi.gov/newyork/press-releases/2011/real-estate-agent-indicted-in-50-million-mortgage-fraud-scheme
8-9-2011: Minnesota closing agent gets >5 years prison for $1.2M fraud case. Source: http://tcbmag.blogs.com/daily_developments/2011/08/real-estate-exec-gets-max-sentence-for-12m-fraud.html
8-5-2011: 3 people were charged in a $2.5 million scheme involving loan modifications - Source: http://www.loansafe.org/three-real-estate-workers-charged-in-miami-for-stealing-2-5-million-in-loan-modification-scheme
8-5-2011: 14 people were charged in a $58 million mortgage fraud scheme involving receipt of money in exchange for false paperwork on mortgages. Source: http://blogs.wsj.com/law/2011/08/04/real-estate-woes-five-lawyers-busted-in-58m-mortgage-fraud-scheme/
7-27-2011: Former Mortgage Company owner convicted of money laundering, mail fraud $30 million real estate fraud. Source: http://www.denverpost.com/business/ci_18525859
7-27-2011: Real estate securities fraud results in man being sentenced to >200 month and $1.9 million fine. Source: http://www.loansafe.org/fugitive-texas-real-estate-fraudster-sentenced-to-more-than-17-years-in-prison
7-26-2011: Alleged >$5 million mortgage fraud committed by former Minnesota real estate agent Source: http://www.loansafe.org/former-minnesota-female-real-estate-broker-charged-in-mortgage-fraud-scheme
7-26-2011: Connecticut real estate agent goes to jail for mortgage short sale fraud.
Source: http://realtybiznews.com/short-sale-fraud-agent-jailed/9874323/
7-24-2011: Wells Fargo gets fined $85 Million (a small pittance of the Billions in economic losses we all suffered in the mortgage fiasco) by the Federal Reserve Board for mortgage fraud related behavior by selling higher rate loans to >10,000 people who should have qualified for lower rates. Can you say "Yield Spread Premium"? Source: http://agentgenius.com/real-estate-news-events/wells-fargo-fined-85-for-abusive-practices-of-thousands-of-borrowers/
7-22-2011: This mortgage schmuck and his ponzi scheme gives bad image to the industry, but where was due diligence of investors? The theory: "If it's too good to be true, it usually is" remains a constant! Source: http://www.denverpost.com/business/ci_18525859
7-21-2011: Real estate agent in Idaho convicted of lying to lender - sentenced to >5 total years and fined. Source: http://www.greenfieldreporter.com/view/story/925722b9bbbd4f94af06f715ed9e146b/ID--Mortgage-Fraud-Sentence/
7-14-201: Two more involved with Taylor, Bean, Whitaker debacle were sentenced to jail time in addition to a $1.6 settlement - so far...Source: https://www.fis.dowjones.com/WebBlogs.aspx?aid=DJFDBR0020110712e77c000dx%20&ProductIDFromApplication=&r=wsjblog&s=djfdbr
7-13-11: Prospect Mortgage agrees to $3+ million fine involving FHA and kickbacks to real estate brokers. Source: http://www.inman.com/news/2011/07/13/hud-lender-paid-kickbacks-real-estate-brokers-agents
7-13-11: Two former real estate agents committed and admitted to $11 Million in mortgage fraud. Source: http://ozarksfirst.com/fulltext?nxd_id=487207
7-13-11: Real state agent convicted of mail fraud to serve 4+ years. Source:http://www2.timesdispatch.com/news/2011/jul/13/6/richmond-real-estate-agent-be-sentenced-fraud-sche-ar-1169735/
7-6-2011: Real Estate agent lies....and that's news? Well, it is in this case and when you lie to HUD - http://www.star-telegram.com/2011/07/06/3203853/fort-worth-real-estate-agent-faked.html
6-29-2011: Man sells houses that didn't exist. (Note: To whom would you sell - people that didn't exist? And where was the due diligence of the Buyers? I think there's contributory negligence here - isn't there always when stupid Buyers meet shifty sellers?)
Source: http://alabama.realestaterama.com/2011/06/29/birmingham-man-faces-mortgage-fraud-charges-for-selling-houses-he-did-not-own-ID0124.html
6-24-2011: Real estate attorney charged with mortgage fraud - gets 3 years of supervised release. Source: http://www.northcountrygazette.org/2011/06/23/kaplan_fraud/
6-21-2011: A former Colonial Bank executive was sentenced to eight (8) years in a federal prison related to Taylor, Bean & Whitaker Mortgage Corp fraud scheme.
Source: http://www.biggerpockets.com/renewsblog/2011/06/17/real-estate-news-by-the-numbers-week-of-june-11-june-17/
6-18-2011: A California real estate broker charged with mortgage fraud for inflated property values & inflated incomes of buyers, and other charges. Also, two people were harge with a fraud scheme involving a financial firm promoting foreclosure rescue/prevention services. Source: http://www.thereporter.com/news/ci_18298413
6-10-2011: I don't know whether this former real estate agent will use the "one armed man" defense, but hey - what could it hurt? Source: http://www.heraldtribune.com/article/20110609/BREAKING/110609559/2055/NEWS?Title=Fugitive-real-estate-agent-arrested-on-fraud-charges-
6-10-2011: Anytime a Real Estate Agent breaks a bond of trust and tried to get away with a rime, all other honest agent cringe. Yes there are dishonest agents, but far more are honest an hard working. Source: http://blogs.sacbee.com/crime/archives/2011/06/couple-pleads-n-1.html
6-10-2011: Another Ponzi scheme for commercial properties in Florida - Is there also such a thing as "greedy" or "stupid" investors? Contributory negligence of due diligence? Source: http://www.housingwire.com/2011/06/08/former-tv-host-charged-in-florida-real-estate-ponzi-scheme
5-29-2011: Real estate agent (as President of an HOA), was accused in fraud scheme to sell 22 Condo units the HOA didn't own or she didn't have authorization to sell. Source: http://www.myfoxtampabay.com/dpp/news/local/pinellas/real_estate_fraud_arrest_clearwater052811
5-28-2011: Three (3) Utah men were indited with conspiracy to commit mortgage fraud using "straw buyers" (i.e., using real people's information to falsely stage mortgage lending, getting false appraisals, etc,.) to get lender to provide the loan funds for closings that aren't real. Possible penalties are sentences, about $2 million in fines, and property. Source: http://www.sltrib.com/sltrib/money/51894227-79/meier-goff-false-prowell.html.csp
5-27-2011: Two former California realtor "sister" fraudsters had paid people $5K to use their personal and financial information as "straw buyers" and promised to buy the homes back. They only got less than 2 years jail time and $200K fines. (Note: Small fish in the sea, but fish nonetheless!)
Source: http://california.realestaterama.com/2011/05/27/former-real-estate-professionals-sentenced-for-mortgage-fraud-scheme-in-vallejo-ID01148.html
http://rejournalonline.com/real-estate-scam-of-the-day-pennsylvania-appraiser-set-to-pay-up/853783/, a Pennsylvania appraiser was convicted of fraud and paid a $15K fine, but wasn't sent to Federal prison like 5 others were. Like the article questioned - tough enough sentence?
4-30-2011: Co-founder of Omni National Bank (Jeffrey L. Levine) was fined $6.8 Million and sentenced to 5 years in Federal prison for involvement of inflating values of bank assets and mortgage fraud. (Atlanta Business Chronicle - 4-29 thru 5-5, page 13A).
4-22-2011: Mortgage Loan Processors (mostly in major US banks) are getting regulatory actions, fines and penalties for sloppy foreclosure processing. However, I haven't hear the final count of the foreclosures that kicked people out of their homes while there were in loan modification processing. 5-10-20-100? Has there been any restitution for those folks? - http://www.mortgagenewsdaily.com/04132011_mortgage_servicing.asp
4-8-2011: Wives of WAMU accused of transferring assets to avoid access from legal claims...As of 3-15-2011, FDIC authorized suits to recover $3.5 B (wow, a far cry from the almost Trillion $ loss)! Source: WSJ, 3-18-2011, C1
3-15-2011: Credit Suisse Group settled a securities class action lawsuit (about misleading some investors about their mortgage exposure by failing to write down some mortgage related securities) and will pay $70 million. WSJ, 3-11-2011, C1 (Comment: I wonder what the attorney's cut is out of the $70 million and how much the plaintiffs will actually receive? Probably not near the damage to investors?)
3-1-2011: WSJ 2-25-11, C3 - Former executive with Taylor, Bean, Whitaker pleaded guilty regarding a $1.9 Billion scheme may result in 30 years of prison on charges executives falsified sales of mortgage loans. (Hey, I didn't see any form of victim restitution....)
WSJ 2-24-2011, A1: Possible settlement of $20 Billion and write downs of loans with large banks under Federal investigation over loan servicing issues like improperly foreclosing on borrowers and not providing sufficient help to restructure loans. If the settlement isn't reached with the Obama Administration, different Federal agencies could pursue other penalties.
MDJ -2-12-2011, 6B = The Securities and Exchange Commission filed civil fraud charges against three former IndyMac Bank executives by disclosing false and misleading reports about the financial stability of IndyMac Bank to investors just before it failed. So far there's only a $100K fine and $2K in restitution - a far cry from the millions of $ in stock that were sold without the alleged proper disclosure of the financial situation.
WSJ-10-16/17-2010=Angelo Mozilo (former Countrywide Financial Chief) has recently settled out of court by paying a $67.5 million fine stemming from insider trading of about $140 million in stock. It was also reported that he has been banned from servicing as officer or director of a public company (but I guess that doesn't prevent him from working for a private 'investment' firm - does it?) Oh, and alot of the fine will be paid by current employer - Bank of America ---Priceless!
Earlier in 2010 Goldman Sachs settled a $550 million suit stemming from misleading investors in the sale of mortgage backed securities.
Note: A 10-21-2010 WSJ Opinion column mentioned that $45 million of the $67 million fine will be paid by Bank of America insurers (via the Countrywide acquisition) and goes on to say the settlement won't protect Mr. Mozilo from criminal charges. Furthermore, Bank of America agreed to pay $9 Billion over Countrywide's lending practices.
10-7-2010: Wells Fargo agreed to pay $24 million and reduce the amount of mortgage loans by $400 million (by lowering balance, interest rate, extend term, or reduce monthly payment) after 8 states' investigation of the marketing of risky mortgages by Wachovia and Golden West Financial Corp, both of which Wells Fargo acquired in in 2006 and 2008, respectively. Some of the risky
I don't think anything short of a hanging or public execution would have been good enough. To think, their "fast and easy" loans based solely on credit score were part of the problems tempting homebuyers to stretch their finances to get a crazy loan like this...even though the borrower is partially at fault, tempting a baby with candy will get the baby sick and you their money.
Federal Housing Finance Agency (FHFA) subpoenas 64 Mortgage Issuers
The FHFA oversees government backed mortgage companies and regulates 12 home loan banks that are major fund sources for hundreds of banks.
This inquiry centers on "private label" securities related to subprime, Alt-A, and other risky home loans. Apparently, Fannie and Freddie couldn't buy them directly but bought $255 billion in slices of those with Triple A ratings - but were basically crap. Freddie has almost $30 billion of the $100 billion of subprime and Alt-A loans went bad. Fannie had $16 billion of $44 billion go bad.
The investigation will focus on whether these "bundles" of loans were sold under false pretences or mistakes, Fannie and Freddie could force the lenders to buy them back.
Maybe one possible tragedy is that Fannie and Freddie, being the major buyers of loans, were in a position to disclose such risk for all investors, yet never sent up warnings.
WSJ 6-25-2010: Morgan Stanley agreed to pay $102 million ($58 million to >1,000 MA homeowners
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