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.

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".

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.

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.

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.

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.

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.

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.

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?)

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

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

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.

Federal Deposit Insurance Corporation (FDIC) News

4-11-2011: The $75 Billion Homeowner Affordability and Stability Plan (www.financialstability.gov) is a comprehensive plan to help responsible homeowners avoid foreclosure by providing affordable and sustainable mortgage loans.

Loan Modfications - ($50 Billion) - Treasury plans to make mortgage payments affordable and sustainable for middle-income American families that are at risk of foreclosure.

Refinancing - ($25 Billion) Borrowers who are current on their mortgage but have been unable to refinance because their house has decreased in value may now have the opportunity to refinance into a 30-year, fixed-rate loan.

Source: http://www.fdic.gov/consumers/loans/hasp/

FDIC plans to sell some real estate connected to CMBS (Commercial Mortgage Backed Securities)

The real estate for sale will come from the over 300 failed banks since the mid 2000's.

The real problem will be the perceived market valuation of these physical properties and the anticipated market values that the FDIC thinks they're worth.

The FDIC intends to open up more than $500 million in loans to see the associated real estate secured by those loans, but I think that the total current market value of some of those properties purchased during the real estate craze in the mid 2000's may be 30-50% less than loan value based on what I have seen or heard about property values.  Also, FDIC has $34 billion in assets from failed banks up for sale...no telling how many others are on FDIC books not yet up for sale, or those pending bank failures.

Source:  WSJ 10-20-2010, C6

Source:  http://www.globest.com/news/1772_1772/washington/fdic-plans-to-sell-some-realty-assets-as-cmbs303630-1.html

FDIC - Federal Deposit Insurance Corporation - What's it up to?

WSJ 10-13-2010:  The Financial Stability Board (group  of regulators, central bankers and international finance ministries) are set to propose stricter capital requirements and plans by firms on how they should be dismantled.  The FDIC plans to prevent any payments to shareholder/long term debtholders in the event of a firm's failures to prevent funnelling money that could have been used to pay some creditors.  The Treasury department objects to the FDIC control discretion and fears some creditors would leave when signs are telling them the end is near (or just doesn't like to share their power).  But FDIC's stance is the "clawback" provision (i.e., go back and collect money from someone who shouldn't have received the amount).  The FDIC can also charge a fee in financial industry to cover some expenses to try to prevent taxpayer .money for any bailouts.

10-8-2010:  FDIC targeted 50 executives and directors of failed banks to try and recover about $1 Billion in losses charging negligence or misconduct.  Note: 287+ banks have been closed since 2008.  In July 2010, the FDIC sued four former IndyMac Bank executives for $300 million in damages but cost the FDIC $12.7 Billion.

10-8-2010:  Government regulators plan to create new rules for FDIC to use their discretion when sizing and dismantling a large financial firm (in a non market disruptive manor) and settle creditor claims based on critical nature to keep operations going or maximize the value of the firm. In other words, all creditors will lose money - it's just that some will lose more of their exposure than 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.

Housemate Match program - Matches rentals with renters

This program matches homeowners who have an extra room to rent in a condo, townhome, or a house with adults looking to rent a private bedroom and public living area room in a secure environment and both individuals willing to share expenses.

http://www.housematch.org/ or call 678-812-3729.

Note:  I don't know anyone who has used this service, but it probably has it's own set of pros and cons - especially getting two people together with similar philosophies, spending habits, and who trust one another.

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.

Emergency Homeowners Loan Program (EHLP)

5-24-2011:  Here is another link to more information about EHLP -
http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/hcc/ehlp/ehlphome
 

Can you  visualize Dr. Evil of the Austin Powers movies say "One Billllion dollars...oooooaaaahhhh!"  
This is a post of an email I received 10-8-10:

The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Obama in July, authorizes HUD to administer a $1 billion Emergency Homeowners Loan Program (EHLP), to provide assistance – for up to 24 months -- to homeowners who have experienced a substantial reduction in income due to involuntary unemployment, underemployment, or a medical condition and are at-risk of foreclosure.  HUD will assist borrowers in 32 states and Puerto Rico not otherwise funded by Treasury’s Hardest Hit Housing Fund program, based on the state’s relative share of unemployed homeowners. 

Applications for this program are not being accepted at this time. It is HUD’s intention for the program to begin taking applications from eligible homeowners by the end of the year. Counselors are advised to encourage homeowners to seek other loss mitigation options in the meantime.

Who Will Be Helped:

1) the borrower must be at least three months delinquent in their payment and have a reasonable likelihood of being able to resume repayment of their mortgage and related housing expenses within two years;

2) the property must be the principle residence of the borrower, and eligible borrowers may not own a second home;

3) the borrower must have suffered at least a 15 percent reduction in income and have been able to afford their mortgage payments prior to the event that triggered the loss income.

How They Will Be Helped:

The HUD Emergency Homeowners Loan Program will offer a forgivable, deferred payment “bridge loan” (zero percent interest, non-recourse, subordinate loans) for up to $50,000 to assist eligible borrowers with their mortgage arrearages and payments on their mortgage principal, interest, mortgage insurance premiums, taxes and hazard insurance for up to 24 months.

There will be a dual delivery approach for program administration. The first approach will delegate some of the program’s administrative functions to a designated third party. The second approach will enable state housing finance agencies (HFAs) that operate substantially similar programs to engage in relief efforts on behalf of residents of their state:

* Delegated approach: HUD will delegate key program administration functions to NeighborWorks® America – an experienced and highly regarded national network of affiliated housing counseling agencies. Under the program, nonprofit housing counselors who are part of the National Foreclosure Mitigation Counseling Program administered by NeighborWorks® America will coordinate intake counseling, document preparation and outreach functions. HUD will also use its delegation authority to contract with an experienced entity to provide loan servicing and fiscal control functions such as collecting payments from homeowners, distributing payments to servicers, and managing loan balances.

* Substantially similar state law approach: State HFAs that operate loan assistance programs that are determined by HUD to be substantially similar to the EHLP will receive allocations to fund emergency loans for borrowers in their states as well as payments to cover the administrative costs of performing the intake and housing counseling and fiscal agent functions (described above) directly or indirectly through subcontracts with third parties.

For additional information on the program and a list of jurisdictions that are eligible to receive funding please visit: http://www.hud.gov/offices/hsg/sfh/hcc/msgs/EHLP100810.pdf

Another source of information:  http://www.mortgagenewsdaily.com/10082010_hud_hfas.asp



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.

Help for Homeowners - Summary of Programs

3-2-2012: HARP is being expanded to all homeowners who are current on their Fannie Mae or Freddie Mac mortgages, have not used HARP before, and regardless how far underwater they are on their mortgage. Source: http://blogs.wsj.com/developments/2011/10/23/twelve-questions-on-obamas-refi-plan/


3-22-2011:  Let's see - Kill FHA Short Refi Program - Maybe kill HAMP - and now extend HARP -HAMP-HARP-FHA Short Refi and other program fates - Apparently, to qualify for HARP you must currently have a mortgage owned or guaranteed by the the former GSEs (Fannie Mae/Freddie Mac), have a 12 month history of on-time payments on your loan, and owe more on your loan than your home is worth (<=125%).  NOTE:  Not sure about these numbers but they are encouraging - During 2010 a total of 6.8 million mortgages were refinanced nationwide using HARP, with 621,803 loan closings - Then how did the other 90% get modified if they didn't refinance through a loan closing?  In 2009 190,180 homeowners used the program to refinance.

3-15-2011:  WSJ 3-15-2011, A16 - over half of all mortgages modified through Bush and Obama programs had redefaulted within 12 months.Private loans defaulted at a higher rate.  But they also reported 62% of "Government Guaranteed" loans but didn't specify FHA/VA/Fannie/Freddie?

3-1-2011:   Affordable Housing Centers of America (AHCOA) is a non profit organization designed to assist homeowners in financial trouble making their monthly mortgage payments.  ACHOA has counselors to assist the homeowner to work with their lenders to prevent foreclosure.  Many times, a bank/financial institution may have several departments - foreclosure, mortgage payment servicing, mortgage modification, etc.  These departments may not even talking with one another regarding the same customer's situation - sad, but true.  Affordable Housing Centers of America website

2-17-2011:  The new FHA Short Refinance Program involves banks and creditors to agree to write down home loans to below current equity (market) value of the home. The process refinance borrowers into the Federal backed mortgages.  As of this date, about 15 homeowners have refinanced since the program's release in August 2010.   http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2010/HUDNo.10-173

Note:  As of now, several other programs to help homeowner have dismal results - 5,000+ homeowners enrolled in program to assist unemployed homeowners; 3,000+ homeowner helped with refinancing 2nd liens; and 2,000+ homeowner received Federal assistance who have turned in their properties or were allowed short sales. (Source:  US House Committee on Oversight and Government Reform) 

Bush's - Hope Now - This was an attempt early in the mortgage meltdown (2007) to get existing lenders to modify your loan.  It was not very successful.

Bush's - Hope for Homeowners in (2008)

Barney Frank's proposed moratorium on foreclosures (with Fannie and Freddie)in (2009).

Barack Obama's - Home Affordable Modification Program (HAMP) - 1-888-995-HOPE (4673) in (2009).

Note: Other attempts by the Federal Government to prevent or relieve impact of foreclosures includes (a) $150 billion poured into Fannie and Freddie to date for purchase of failed mortgages; (b)both the first time homebuyer tax credits (one refundable, the other non-refundable); (c) Federal dollars to help neighborhoods struck by foreclosures; (d) another $1.5 billion to 5 states and $.5 billion to other states hit by foreclosures; and (e) FHA's recent continuation of flipper waiver allowing people to purchase flipped homes less than 90 days after foreclosed homes were bought and remodeled by investors.

10-20-2010:  (WSJ 10-20-2010, C2) - Wells Fargo was quoted to say their general practice is to exhaust every home retention option before foreclosure.

8-18-2010 WSJ A6 - Some complaints - overly complex, unwieldy and revised so often that servicers have a hard time keeping up with changes, but the Treasury Department blames servicers for not doing everything possible for the homeowner.

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.

U.S. Department of Housing and Urban Development - FHA Short Refinance

All these programs were thought of to help homeowners.  For example, HAMP was designed to help millions of homeowners, but less than 500,000 homeowners in fact more people have been kicked out of the program than received permanent modifications and many more found no path to keeping their home.

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.

Estimated cost of recent Mortgage Fraud - $1 TRILLION

According to the Atlanta Business Chronicle October 8-14, 2010 page 22A, and the Financial Crisis Inquiry Commission, at least 13% of mortgages originated between 2005 and 2007 had some element of fraudulent activity.

Apparently, 2 Atlanta zip codes (30310 and 30315) are among the top 10 zip codes for fraud....I think I had heard about these two zip codes a couple of years ago.  Also, Georgia ranks 6th in nation in amount of mortgage fraud.

Scariest part of article said the $1 trillion is a low-ball estimate and it could be as high as $4.8 TRILLION!

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.

And the big keep getting bigger...

Mergers and acquisitions are also affecting the real estate industry - Realogy: Parent company of NRT, Century 21, ERA, Coldwell Banker, and Sotheby's International Realty.... One of it subsidiaries just got bigger - http://www.marketwatch.com/story/realogy-subsidiary-nrt-enters-new-real-estate-market-with-acquisition-of-leading-philadelphia-firm-coldwell-banker-preferred-2010-10-05?reflink=MW_news_stmp

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.

Georgia Power program for up to $1,900 in rebates and another $1,500 in income tax credits

http://www.georgiarebate.com/

So far so good, but here's the catch 22...

To get the rebates, you have to use these Georgia Power approved contractors - which may end up costing more than the difference in rebates...

Click here for eligible rebates

For those of you who want to buy into this "rebate" tease...look for more details at Georgia Power's Energy Star website.

Even though I favor taking action on saving energy and encourage homeowners to seek comprehensive cost v. benefit analysis, I believe my access to rebates should not be limited to certain contractors. A licensed contractor should be enough, as long as they follow prescribed conditions/guidelines set by Georgia Power.

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.

Financial Reform Bill 2010 - helpful, doesn't prevent big problems, or both?

Note:  Not addressing Federal Reserve or Fannie or Freddie - the real causes of most of the mess - are not addressed - And I don't think the Republicans would have addressed these facets either since they didn't when they were in control from 1994 through 2006.

A little of both, but fell way short according to Matt Taibbi (Rolling Stone) and the Wall Street Journal (6-24-2010, A19)

Apparently, the Bill could have been stronger, dealt with preventing certain loan generation, and deal making in the back room of Congress to water down the impact.

Helpful - Expands the number of small companies from Sarbanes-Oxley audit requirements.

Doesn't prevent problems - (1) Didn't revoke 1975 law that prevents municipal bond issuers from same regulation of corporate bonds (consider current municipal bond market - and states' pension plan deficits);  (2) law limits access to proxy issues to only investor with at least 5% of outstanding shares; (3) let's the SEC become a self funded agency (but may be killed by appropriations committee unwilling to give up power); (4) Congress left both the SEC and Commodity Futures Trading Commission alone instead of merging forces and eliminating regulatory confusion; (5) failed to pass the Frank amendment which effectively would allow third parties of fraud avoid liability; and (6) no reform of Fannie or Freddie (which will be another bi issue, but I believe might be another "rearrangement of Titanic's deck chairs.

Another example to failed reforms:  Public companies now have wider loopholes to avoid their own internal audits;

Calls for complete audit of the Federal Reserve were ignored.

Note:  Proxy access - looks like the SEC may let shareholders nominate Board Member next to other recommendations.

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.