HUD/FHA Training Sessions
This is the HUD national homeownership center reference guide mailing
list for real estate industry professionals that are interested in
updates to HUD Mortgagee letters, notices and guidebooks, & FHA
Housing Industry Training. Please visit our homepage at: http://www.hud.gov/offices/hsg/sfh/hsgsingle.cfm Servicing lenders can visit HUD's National Servicing Center at: http://www.hud.gov/offices/hsg/sfh/nsc/nschome.cfm
This list does not provide HudHome property listings.
FHA Training and Events:
- June 2012 - FHA Basic Loss Mitigation training for HUD approved
housing counseling agencies, local servicing lenders and nonprofits.
Multiple dates and locations are available for this live training
opportunity. Registration required, no fee. Register today to reserve
your place. To register and for more information please visit:
May 23, 2012 - Jacksonville, FL;
June 5, 2012 - Greensboro, NC
June 14, 2012 - Louisville, KY
June 14, 2012 - Chicago, IL
June 19, 2012 - Nashville, TN
June 20, 2012 - Memphis, TN
June 20, 2012 - Indianapolis, IN
22, 2012 - FHA Refinance Webinar. This FREE webinar will help you
better understand FHA’s General Refinance guidelines. Topics discussed
include Streamline Refinances, Cash Out Refinances, Rate & Term
Refinances and Refinances for Borrowers in Negative Equity Positions.
Attendees will learn about the new changes outlined in recent Mortgagee
Letters. Basic calculations will be presented in this training course
for anyone wanting to improve their knowledge of refinances.
Registration is required. Please hold on to the e-mail you receive after
you register, you will need it to access the webinar. This webinar will
be archived. Please Email your questions to: firstname.lastname@example.org More info at: http://www.visualwebcaster.com/FHA/87137/reg.html
5, 2012 - San Antonio, TX: "FHA APPRAISAL" This FREE one-day class
discusses FHA appraisal requirements including FHA Appraisal Protocol,
updates to FHA appraisal policy, as well as equips attendees with the
knowledge to determine property eligibility. This course provides a
refresher to seasoned FHA appraisers, as well as provides valuable
information to appraisers new to the FHA roster. This course will count
towards 7 hours of Continuing Education for the state of Texas.
Registration required, no fee. More info at: http://www.hud.gov/emarc/index.cfm?fuseaction=emar.addRegisterEvent&eventId=1324&update=N
June 5-6, 2012
- San Juan, PR. FHA Appraiser and Lender Training. The appraiser
training includes coverage of Recent Mortgagee Letters, appraising REO
properties and defining required repairs vs. cosmetic deficiencies. The
credit underwriter training includes coverage of Recent Mortgagee
Letters, PETR’s, general do's and don'ts and FHA of 2012. Registration required, no fee. More info at: http://www.hud.gov/emarc/index.cfm?fuseaction=emar.addRegisterEvent&eventId=1307&update=N
6, 2012 - San Antonio, TX: "A Day with FHA" This FREE one-day
training will cover a wide spectrum of topics to include: Recent
updates, Refinances, Real Estate Owned (REO) calculations and
Transactions that affect the maximum Loan to value (LTV.) Interactive
scenarios/discussions covering Credit, Liabilities, Income and Assets
will be facilitated along with case studies for Purchases, Refinances,
and REOs. Please bring a calculator to the training course. Check-in
will begin at 8am at the Salon del Rey South Ballroom. Registration
required, no fee. More info at: http://www.hud.gov/emarc/index.cfm?fuseaction=emar.addRegisterEvent&eventId=1323&update=N
6, 2012 - Atlanta, GA. Sovereign Citizens and Adverse Home Possession
An Emerging Fraud Trend. Learn how these issues are impacting the real
estate market. sponsored by the Georgia Real Estate Fraud Prevention
& Awareness Coalition. Registration required. More information at: http://www.grefpac.org/
7, 2012 - Webinar: Selling HUD REO's. This training will cover the
roles of the Asset and Field Service Managers; who can purchase and sell
HUD REO’s; types of HUD Home listings; electronic bidding; “incentive”
programs; common delays, and more. 10:00 am – 11:00 am PST. Attendance
is limited to first come. Registration required, no fee. Register
today at: https://www2.gotomeeting.com/register/785739986
- September, 2012 – Webinar: FHA Loss Mitigation Series: FHA now offers
a series of new Loss Mitigation webinars designed for FHA Approved
Servicing Lenders and Housing Counseling Agencies. The webinar modules
provide participants with a detailed overview of FHA’s Loss Mitigation
options and process workflows; including how servicers must apply the
waterfall priority, FHA’s definition of key timelines, SFDMS reporting
requirements, claim filing process, industry best practices, and an
opportunity to participate in customer case studies. Offering the
webinars exclusively to our servicing partners allows us to focus on
servicer requirements and questions. Participating with other loss
mitigation stakeholders also presents an opportunity for you to share
issues and best practices. We encourage all staff and managers engaged
in the Loss Mitigation process from collections to claims and counseling
to attend. The classes will serve as a refresher course for your
seasoned staff and provide an excellent foundation for new staff working
with Loss Mitigation. These Loss Mitigation Webinars will be conducted
as a series on a rotating basis. FHA is providing two scheduled
opportunities for training sessions. All webinars will be held on a
Wednesday at 2:00 pm EST, and are 2 hours in duration. Housing
Counselors may register by completing all information on the
registration site and entering “00000” for the Lender ID. Registration
is required, no fee.
Schedule 1 will be from June 06, 2012 - July 18, 2012:
June 06, 2012 - Webinar I: Overview HUD Early Delinquency Activities and Loss Mitigation Program. Register at: https://www1.gotomeeting.com/register/904200968
June 13, 2012 - Webinar II: HUD Loss Mitigation - Home Retention Options. Register at: https://www1.gotomeeting.com/register/727282712
June 20, 2012 - Webinar III: HUD Loss Mitigation Disposition Options - Pre-Foreclosure Sale & Deed in Lieu. Register at: https://www1.gotomeeting.com/register/308591624
June 27, 2012 - Webinar IV: SFDMS - Default Reporting. Register at: https://www1.gotomeeting.com/register/940852729
July 11, 2012 - Webinar V: HUD’s Neighborhood Watch System - Servicer Tools. Register at: https://www1.gotomeeting.com/register/898586809
July 18, 2012 - Webinar VI: FHA Claims. Register at: https://www1.gotomeeting.com/register/209467697
Schedule 2 will be from August 01, 2012 - September 12, 2012:
August 01, 2012 - Webinar I: Overview HUD Early Delinquency Activities and Loss Mitigation Program. Register at: https://www1.gotomeeting.com/register/996784144
August 08, 2012 - Webinar II: HUD Loss Mitigation – Home Retention Options. Register at: https://www1.gotomeeting.com/register/702506616
August 15, 2012 - Webinar III: HUD Loss Mitigation Disposition Options - Pre-Foreclosure Sale & Deed in Lieu. Register at: https://www1.gotomeeting.com/register/292271032
August 22, 2012 - Webinar IV: SFDMS - Default Reporting. Register at: https://www1.gotomeeting.com/register/954591896
August 29, 2012 - Webinar V: HUD’s Neighborhood Watch System - Servicer Tools. Register at: https://www1.gotomeeting.com/register/450928833
September 12, 2012 - Webinar VI: FHA Claims. Register at: https://www1.gotomeeting.com/register/699470496
In addition to these loss mitigation webinars, FHA also offers web-based EClass training modules at: https://eclass.hudtulsa.org/
. You can also attend “Live” Early Delinquency Servicing Activities,
and FHA’s Loss Mitigation Program training which can be found at: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/events/events For more information, visit the FHA National Servicing Center online at: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/nsc/nschome
for New and Existing HOPE LoanPort Users (HLP): This is a reminder that
HLP hosts on-line training. If you would like to register for this
training session, please follow this link: https://student.gototraining.com/938l8/catalog/6679225611805658624 This link
will bring you to a registration page for each of HLP’s upcoming
training dates. Training classes are offered Tuesdays at 3:00 PM EST
and Thursdays at 1:00 PM EST. Please scroll through the available
options for these sessions and register for the one that best fits your
schedule. Once you have joined the training session, you will be able to
download the meeting materials and follow along with the presenter. If
you have any questions or are having difficulty registering, please feel
free to contact the HLP team at: email@example.com
If you have missed a recent FHA webinar, please visit our webinar archive to view archived versions of our training webinars: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/talk/parc/phiarch
Some industry folks have asked, "How do I sign up my entire staff for
FHA email updates?" It is easy... Just list your staff email addresses
You can send in one email address or thousands. Email your list to: firstname.lastname@example.org
you have a mortgage or real estate industry friend who you want to
subscribe to the national hoc reference guide mailing list, there are 3
other ways to sign up: 1. send them this link: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/ref/hsgregst they can sign up for the email list there; or 2: forward them this email; or 3: Visit: http://www.usa.gov and subscribe at: http://apps.gsa.gov/FirstGovCommonSubscriptionService.php To unsubscribe - go to: http://portal.hud.gov/portal/page/portal/HUD/subscribe/mailinglist and click on "National Homeownership Center Reference Guide" and follow the unsubscribe instructions on that page.
For FHA technical support, please contact the FHA Resource Center at: www.hud.gov/answers
Search our online knowledge base & find answers to our most
commonly asked questions. You can also get email technical support at: email@example.com
or phone FHA toll-free between 8:00 a.m. & 8:00 p.m. ET (5:00 a.m.
to 5:00 p.m. PT) at: (800) CALLFHA or (800) 225-5342. Call FHA TDD at:
(877) TDD-2HUD (877) 833-2483).
Visit our homepage at: http://www.hud.gov/sf
FHA publications at HudClips: http://www.hud.gov/offices/adm/hudclips/index.cfm Order hardcopies at: http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/dds
FHA forms: http://portal.hud.gov/portal/page/portal/HUD/program_offices/administration/hudclips/forms
FHA Homeownership Centers: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/hoc/hsghocs
Events & Training Calendar: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/events/events
Contracting Opportunities: http://portal.hud.gov/portal/page/portal/HUD/program_offices/cpo
Career Opportunities: http://www.usajobs.gov
Grant Opportunities: http://portal.hud.gov/portal/page/portal/HUD/program_offices/administration/grants/fundsavail
Presidentially Declared Disaster Areas: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/nsc/disaster
Foreclosure Assistance: http://portal.hud.gov/hudportal/HUD?src=/i_want_to/talk_to_a_housing_counselor
Making Home Affordable: http://www.makinghomeaffordable.gov/pages/default.aspx
This listserv does not provide HudHome property listings. To see the latest list of all HudHomes nationwide please visit: http://hudhomestore.com/HudHome/Index.aspx
or follow us on Twitter @HudHomeStore We will also feature
information about upcoming trainings, resources for homebuyers, and
related HUD programs. Click on http://twitter.com/hudhomestore to link directly to our page.
list will often provide training opportunities and event announcements
for non-profit and local government HUD partners. HUD does not endorse
the organizations sponsoring linked websites, and we do not endorse the
views they express or the products/services they or their
community/business partners offer. For more information on HUD’s web
policies please visit: http://www.hud.gov/assist/webpolicies.cfm
Negative Equity Carryover Model: A BRILLIANT IDEA
Negative Housing Equity is Destroying Consumer Confidence and Severely Undermining the U.S. Economic Recovery
Negative home equity for America’s Homeowners has become a national economic crisis. Nationwide, homeowners are chained to their homes unable to sell due to the shackles of negative equity. This lack of mobility comes at a cost to society at a time when the public’s need to relocate is at its greatest. Industry needs labor mobility to balance workforce requirements, labor needs mobility to find and create job opportunities, families need it to consolidate households in order to care for aging relatives, and others simply to downsize into homes that they can manage and afford.
Banks are resistant to negotiate short sale settlements for the fear that the losses on these mortgages will spiral out of control and bring the banks to their knees. Many borrowers are choosing to strategically default in an effort to break the chains of negative equity in order to get on with their lives.
Negative equity, short sales and foreclosures have become a lose-lose situation for America's taxpayers, homeowners and lenders. The Federal Government needs to encourage and allow Fannie Mae, Freddie Mac and Banks to offer Negative Equity Carryovers. Negative Equity Carryovers would not be paid with taxpayer money. Quite the opposite, Carryovers would substantially reduce taxpayer losses now being incurred through Fannie Mae and Freddie Mac bailouts.
If a homeowner owes more money than their home is worth, a Negative Equity Carryover would allow the homeowner to carry forward the negative equity to a subsequent property purchase- a property better suited to their current economic, employment or lifestyle needs. The key to the Model is that negative equity would be 100% PORTABLE. This would free Americans to re-align their household expenses, allow needed mobility to secure new employment opportunities and greatly encourging economic activity. If so granted by legislation, negative equity could also be slowly extinguished for homeowners over a longer time frame reducing the need for immediate Treasury infusions into Fannie Mae and Freddie Mac as is now the case to cover current short sale and foreclosure expenses.
The “Negative Equity Carryover Model” proposes that negative equity be carried forward to a subsequent property purchase or as a personal loan to the homeowner after the property sale. Homeowners and banks won’t need to negotiate the loss of equity as is currently being done through short sales and foreclosures. Negative equity would cease to be an immediate hardship for the Taxpayer, Homeowner and Lender.
The Model suggests that rather than write the loss off at time of sale through a short sale or foreclosure, the negative equity can be carried into the future as an independent debt or lien and slowly forgiven over an amortized timeframe. The homeowner’s credit would be saved and we as a nation could avoid the wholesale destruction and lockout of a future homeownership class due to damaged credit. Lenders could amortize the negative equity over years while still maintaining a lien position with homeowners just in case equity returned as market values began to increase.
Authored by Gil Kerbashian Chief Market Analyst RealestateloanS.com
( Mortgage Modifications
, Mortgage Interest Rates
, Mortgage Bankers Association
, Mortgage Warehouse Lines
, Mortgage Bankers
, Wholesale Mortgage Lending
, Mortgage Banking
, Refi Plus
, Home Affordable Modification
, Making Home Affordable Mortgage
, Mortgage Market Guide
, Housing Market
, Fannie Mae
, Freddie Mac
Should I Pay My Mortgage Off With My 401k?
If your 401k is continuing to go down in value and your mortgage payment is increasing, doesn't it make sense to utilize the 401k money now to payoff your mortgage? At first glance it may seem like the right thing to do.
With so many homeowners struggling right now with careers while worrying about mortgages that are resetting to new higher payments, this question seems to be on a lot of minds. These same borrowers are completely discouraged about their fund returns and may want to shore up their personal "balance" sheets by liquidating their 401k to pay down or payoff their mortgages in order to lighten their load.
My first bit of advice will always be to consult several very proficient CPAs AND financial planners first. Get several opinions and all the facts on what the right thing to do is from a tax and a long term investing point of view. Seek out the most experienced person you can find, don't cut corners on this matter.
I would probably also recommend not reacting out of anxiety. Talk to family and friends to see if a fresh perspective might help. With mortgage rates coming down you will want to exhaust all of your resources with refinancing, including calling your mortgage servicer to see if there is a modification program that may work for you. Don't just let your bank say no, call a few banks and mortgage brokers- speak with the most experienced mortgage professional you can find. Talk to your fellow chamber members, Rotarian fellows, ask your CPA or financial planner to give you a referral to an ethical mortgage specialist or real estate attorney that specializes in mortgage modifications. The average cost of a modification is only costing around $500-$1500 and well worth it if you can't refinance but can qualify for a modification.
If you do choose to draw down your 401k account, count on paying up to 50% of the current balance towards taxes and penalties. You may be at the bottow of the market now so drawing out your money at this time may be inappropriate. Look for alternatives by talking to sage professionals.
Summary of FHA changes for 2009 - Industry Technical Verbage
For details about FHA refinance transactions, read the following sections.
New Maximum Mortgage Calculation
Rate and Term Refinances with an Appraisal: The maximum mortgage amount is the lower of the LTV limitations, or the Existing Debt calculation described below, not to exceed the geographical statutory limit, except by the amount of the any new up-front mortgage insurance premium (UFMIP):
LTV Ratio Applied to Appraised Value: Multiply the appraised value of the property by 97.75%
Existing Debt: Add the amount of the existing first lien, any purchase money second mortgage, any junior liens over 12 months old, closing costs, prepaid expenses, customer-paid repairs required by the appraisal, discount points, and then subtract any refund of UFMIP.
If any of the portion of an equity line of credit in excess of $1,000 was advanced within the past 12 months, and was for purposes other than repairs and rehabilitation of the property, the line of credit not eligible for inclusion in the new mortgage.
The amount of the existing debt may include any prepayment penalties assessed on a conventional mortgage.
Streamline Refinances with an Appraisal: The maximum insurable mortgage amount is the lower of 97.75% of the appraiser’s estimate of value, or the sum of the existing indebtedness, related closing costs, and prepaid expenses for the refinance:
LTV Ratio Applied to Appraised Value: Multiply the appraised value of the property by 97.75%
Existing Debt: Add the amount of the existing FHA-insured first lien, closing costs, prepaid expenses, discount points, and then subtract any refund of UFMIP.
Streamline Refinances without an Appraisal: The maximum insurable mortgage amount is the lower of the following two calculations:
Original Loan Amount: The original principal balance on the mortgage (which includes any UFMIP) plus the new up-front premium that will be charged on the refinance.
Existing Debt: Add the amount of the existing FHA-insured first lien, closing costs, prepaid expenses, discount points, and then subtract any refund of UFMIP.
For more information, read the Loan-to-Value and Combined Loan-to-Value Mortgage Amount Calculation Comparison job aid provided by the Federal Housing Administration.
Other Rate / Term and Streamline Refinance Reminders:
The mortgage being refinanced must be current for the month due (Ex: Refinancing a mortgage in November must have the October payment made).
In determining the existing debt as part of the mortgage amount calculation, the mortgagee may include accrued late charges and escrow shortages.
Subordinate liens, including credit lines, regardless of when taken, may remain outstanding, but subordinate (assuming the subordinating lender will subordinate) to the FHA-insured mortgage.
At closing, the customer may not receive more than $500 incidental cash back.
Second Appraisal Requirements / Loan-to-Value Limits for Cash-Out Refinances
In addition to the existing requirements for cash-out transactions over 85% and over $417,000, FHA now requires a second appraisal for all cash-out refinances where the LTV, exclusive of the UFMIP, will exceed 85% of the appraiser’s estimate of value.
This second appraisal requirement applies, regardless of the loan amount or location of the property
The second appraisal requirement for cash-out refinances is effective for all case numbers assigned on or after January 1, 2009.
The customer is allowed to cover the expense of the second appraisal.
Other Cash-Out Refinance Reminders when Exceeding 85% LTV:
The subject property must have been owned by the customer as his / her principal residence for at least 12 months before the date of the loan application.
If the property is encumbered by a mortgage, the customer must have made all of his / her mortgage payments within the month due for the previous 12 months.
The property that is security for the refinanced mortgage must be a one- or two-unit dwelling.
Subordinate financing may remain in place (assuming the subordinating lender will subordinate), but subordinate to the FHA-insured first mortgage, regardless of the total indebtedness or combined loan-to-value ratio, and provided that the homeowner qualifies for making scheduled payments on all liens.
Any co-borrower or co-signer added to the note must be an occupant of the property. Non-occupant owners may not be added to meet FHA credit underwriting guidelines for the mortgage.
Note: A loan with an amount above $417,000 remains restricted to an LTV of 85% or less.
Non-Borrower Taking Title at the Time of Closing
Mortgagee Letter 2008-40 eliminates the requirement of all parties that take title to be a borrower (obligated to the note), regardless of whether the transaction is a purchase or a refinance.
For complete details, click here to read Mortgagee Letter 2008-40.
Obama's New Homeownership Affordability Refinance Program Details
President Obama's administration Wednesday
gave mortgage lenders a green light to start modifying home loans under the new $75
billion program for people currently facing financial hardship. Borrowers must fully document hardship,
income and prove occupancy.
The new program provides cash
incentives to loan servicers for reducing monthly payments will only modify
single family residence mortgages up to $729,750 originated prior to January 1, 2009.
also announced that lenders could begin refinancing current
mortgages guaranteed by Fannie Mae or Freddie Mac on owner occupied homes that have values that
This plan would allow homeowners
to refinance at market rates with a loan-to-value ratio of up to 105 percent
rather than the normal Fannie Mae or Freddie Mac 80-90% limit.
"The Home Affordable Refinance
program will be available to 4 to 5 million homeowners who have a solid payment
history on an existing mortgage owned by Fannie Mae or Freddie Mac."
In this market most of these borrowers couldn't refinance because their homes have lost value pushing their current
loan-to-value ratios above 80-90%.
Below are the
>Loans originated on or before
January 1, 2009.
>First-lien loans on
owner-occupied properties with unpaid principal balance up to $729,750. Higher
limits allowed for owner-occupied properties with 2-4 units.
>All borrowers must fully document
income, two most recent pay stubs, and most recent
tax return and must sign an affidavit of financial hardship.
>Property owner occupancy status
will be verified through a borrower credit report and other documentation; no
investor-owned, vacant, or condemned properties.
>Modifications can start from now
until December 31, 2012; loans can be modified only once under the program.
Loan Modification Terms
>Participating servicers are
required to service all eligible loans under the rules of the program unless
explicitly prohibited by contract; servicers are required to use reasonable
efforts to obtain waivers of limits on participation.
>Servicers will follow a specified
sequence of steps in order to reduce the monthly payment to no more than 31% of
gross monthly income (DTI).
>The modification sequence
requires first reducing the interest rate (subject to a rate floor of 2%), then
if necessary extending the term or amortization of the loan up to a maximum of
40 years, and then if necessary forbearing principal. Principal forgiveness or a
Hope for Homeowners refinancing are acceptable alternatives.
>The monthly payment includes
principal, interest, taxes, insurance, flood insurance, homeowner's association
and/or condominium fees. Monthly income includes wages, salary, overtime, fees,
commissions, tips, social security, pensions, and all other income.
>Servicers must enter into the
program agreements with Treasury's financial agent on or before December 31,
Payments to Servicers,
Lenders, and Responsible Borrowers:
>The program will share with the
lender and investor the cost of reductions in monthly payments from 38% DTI to 31%
>Servicers that modify loans
according to the guidelines will receive an up-front fee of $1,000 for each
modification plus some "pay for success" fees on still-performing loans of $1,000
>Homeowners who make their
payments on time are eligible for up to $1,000 of principal reduction payments
each year for up to five years.
>The program will provide one-time
bonus incentive payments of $1,500 to lenders and investors and $500 to servicers for
modifications made while a borrower is still current on mortgage payments.
>The program will include
incentives for extinguishing second liens on loans modified under this program.
>No payments will be made under
the program to the lender or investor, servicer, or borrower unless and until the
servicer has first entered into the program agreements with Treasury's financial
>Measures to prevent and detect
fraud such as documentation and audit requirements will be central to the
>Servicers will be required to
collect, maintain and transmit records for verification and compliance review,
including borrower eligibility, underwriting, incentive payments, property
verification, and other documentation.
>Freddie Mac will audit
compliance. GSE lenders and servicers already have much of the borrower's
information on file, so documentation requirements are not likely to be
too burdensome. In addition, in some cases an appraisal will not be necessary (streamline refinance). This
flexibility will make the refinance quicker and less costly for both borrowers
and lenders. The Home Affordable Refinance program ends in June 2010.
To help borrowers the government has put answers to common questions and other tools on a Website at: www.FinancialStability.gov.
AIG The Prodigal Son Comes Back To Father Treasury
For those not keeping up with the AIG saga, I have to say you're missing something big and incredibly fascinating! A lot of cronism and dirty business is taking place under the noses of 249 million Americans (the rest of us are smelling the stink).
Americans were initially told $80 billion was needed during 2008's bailout for AIG but now the number has jumped to over $120 billion.
Where the little ball stops is anyone guess.
The Federal Banking Complex has been unwilling to release information regarding flow of funds to the CDS counterparties. However, the recipient list is starting to trickle out with much more to come now that the media and nonfinancial business community is starting to develop a taste for blood. Cassano blood.
More on Joe Cassano
What we've been able to view through the fog to this point, Paulson, the former CEO of Goldman Sachs offered up Billions of dollars worth of bailouts to AIG that ended up in the bank accounts of Goldman Sachs and other financial companies like Morgan Stanley.
AIG insured Trillions of dollars worth of CDS's through their UK operations, keeping little to nothing in the way of reserves for a time where the swaps might (did) come due. A short list of the banks receiving taxpayer funds via AIG's bailout:
NY TIMES: “They [AIG] were the worst of them all,” said Frank Partnoy, a law professor at the University of San Diego and a derivatives
expert. Mr. Vickrey of Gradient Analytics said, “It was extreme hubris,
fueled by greed.” Other firms used many of the same shady techniques as
A.I.G., but none did them on such a broad scale and with such utter
recklessness. And yet — and this is the part that should make your
blood boil — the company is being kept alive precisely because it
behaved so badly.
Royal Bank of Scotland
Bank of America
Lloyds Banking Group
Source: WSJ research
Yuliya Demyanyk- The New Fed Boss of Subprime Loans
A new St Louis Fed report found that approximately 5 million home purchases were
financed with subprime loans between 2000 and 2006 with only about one million loans going to first time homebuyers.
Per the St Louis Fed, “the subprime mortgages data seems to suggest that the number of
foreclosed homes, with mortgages funding the home purchases, already
exceeds the estimated number of first-time homebuyers with subprime
“If a borrower took out a subprime loan in 2001, say as a first-time
homebuyer, and then refinanced into a better loan in 2004, the same
borrower most likely could have skipped the subprime step and become a
first-time homebuyer in 2004, starting with a more stable loan and
avoiding high interest rate payments and prepayment penalties.”
Yuliya Demyanyk is a research economist of the St Louis Fed. Her research focuses on the subprime mortgage
market, the roles that financial intermediation and banking
regulation play in the U.S. economy, and on analysis of financial
integration in the United States as well as in the European Union.
Dr. Demyanyk was an economist in
the Banking Supervision and Regulation Department at the Federal
Reserve Bank of St. Louis. She has a PhD in economics
from the University of Houston, an MA in economics from the Kyiv-Mohyla
Academy, Economic Education and Research Consortium (EERC), Ukraine,
and an MA in physics from the National University of Odessa, Ukraine.
Fannie Mae Expands Limit On Allowable Mortgages
What's a real estate investor to do? Buy, buy, buy...
Last year Fannie Mae capped the number of insured mortgages an individual was allowed to have if that individual was applying to Fannie Mae for residential Financing. The last mortgage limit of record was four mortgages but Fannie Mae has recently raised that cap to ten mortgages. This means that an investor can now hold ten Fannie Mae insured mortgages, greatly expanding the opportunity to increase the investors real estate portfolio with Fannie Mae's conventional terms.
Why is this important? Fannie Mae (and Freddie Mac) are effectively the only entities offering "investor" loans with semi-reasonable terms.
Yes, it is alltogether possible for an investor to have a relationship with a bank and obtain financing for an investment property, however, for a mulitude of reasons many banks have been restricted from this type of lending. Even if a relationship bank was able to lend to their private investor client, the same bank's terms would probably not be as favorable as Fannie Mae's.
Investors are becoming increasingly active in the residential housing purchase market due to the number of bargains now available. One more sign that we are bottoming.
Fannie Mae and Freddie Mac Disclose Loan Buyback Numbers
Buyback are loans that were poorly underwritten and are required to be taken back or "bought back" from Fannie or Freddie by the underwriting lender.
Fannie Mae stated that it made servicers/lenders buy back or reimburse it for losses on $1.8 billion of loans, 64% more than a year earlier.
It was the first time the government-sponsored entities have disclosed the amount of their repurchase demands. Previously Fannie Mae only acknowledged that the number of such demands had been on the rise since 2008 as delinquencies worsened. Freddie Mac also has been sending more loans back to lenders: $1.3 billion in the first quarter, up 65% from a year earlier, according to its first-quarter filing last week.
In February Fannie announced a "loan-quality initiative" designed to reduce loan repurchase requests. If lenders do a better job on the front end of making sure the loans they deliver meet the GSE's guidelines, Fannie has said, it would not have to make lenders buy back so many defective mortgages after the fact. The initiative will begin next month.
Among other changes, lenders will have to pull a second credit report just before a loan closes to check if the borrower has taken on additional debts since submitting the mortgage application. Origination News.
H.R. 6218 - The Home Act
H.R. 6218, The Housing Opportunity and Mortgage Equity Act of 2010
The Home Act H.R. 6218
OBJECTIVE: This legislation is designed to achieve what all other foreclosure prevention programs have failed to do: stop the onslaught of foreclosures by offering affordable refinancing opportunities to millions of Americans with mortgages backed by the GSEs (Fannie Mae and Freddie Mac). The foreclosure crisis continues to devastate our districts, and we simply cannot keep responding to a hemorrhaging economy with band-aid solutions. The HOME Act will reduce foreclosures dramatically; reward homeowners who have continued to make their mortgage payments; and free up the capital needed to reinvigorate the housing market and the economy as a whole.
1) All Americans with a Fannie- or Freddie-Backed Mortgage. Whether they have a loan that is in default or current, homeowners will immediately have the opportunity to obtain a long-term, fixed rate mortgage that they can afford now and in the future.
2) All Would-be Homebuyers. They will benefit from the floor of home prices created by the prevention of additional foreclosures and the availability of credit for new mortgages that will become available.
3) The U.S. Economy. Our nation’s lagging economy will be stimulated by the simple fact that millions of Americans will have a reduced mortgage payment and hundreds more dollars each month to spend, the equivalent of a large increase in annual income for years for struggling middle-income households.
HOW THIS IS ACHIEVED: Using the conservatorship of Fannie Mae and Freddie Mac, all mortgages currently owned or guaranteed by Fannie Mae and Freddie Mac that meet the basic criteria will qualify for the opportunity to refinance at historically low market rates. This would allow homeowners to reduce their monthly mortgage payment by hundreds of dollars—reducing the number of defaults and preventing foreclosure. To fund the program, Fannie and Freddie would issue new mortgage-backed securities (MBS) to fund the refinanced mortgages and use the proceeds to pay off the existing MBS (just like what happens now when borrowers refinance). Fannie and Freddie would receive the same cash flow to cover default risk that they do now, passing along the reductions in financing costs to borrowers.
COSTS: Little-to-no cost to taxpayers. The fees for refinancing would be rolled into the mortgage to eliminate the cost to taxpayers—penalties would be waived. As GSEs, Fannie and Freddie are currently wards of the federal government. As a result, mortgages they currently hold are financial liabilities held by the U.S. government. The HOME Act would help reduce that liability over the medium-to-long-term by preventing the potential for millions of foreclosures that would otherwise leave taxpayers on the hook. There are about 30 million outstanding mortgages whose losses are guaranteed by the federal government through Fannie or Freddie. Morgan Stanley and JP Morgan Chase have evaluated potential savings from such a program and have estimated an annual reduction in mortgage payments of about $50 billion.
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, Mortgage Modifications
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Idiots At HUD Extend Condo Approval Deadlines One Day After They Expire
Pure government and HUD nonsense. One day after the majority of HUD condo approvals expire, the braniacs at HUD send out a Mortgagee Letter stating that they have extended the condo expiration deadlines.
These are the folks that are responsible for overseeing our national housing finance industry?
They couldn't do this one week earlier to help the industry when it was rushing to close transactions to meet the deadlines?
What a pathetic bunch of idiots!
For the last week, lenders, homebuyers and Realtors have been frantically working to close their transactions in order to make the deadline cutoffs.
All this intense pressure typically without the help of the useless folks at the thousands of homeowners associations accross the country that have neglected for the last year to update their HUD approvals for their condo complexes.
Is this the best HUD can do? Is this the best America has? God help us!
Realtors Being Tracked by Wells Fargo, Bank of America and Chase
Fraud is still a concern for banks, some reports claim that it is up 35% since the financial crisis. Truly surprising considering all the new underwriting safeguards. Yet, incidents of real estate collusion and fraud are showing up quicker and often.
If a real estate professional commits fraud but the housing prices rise, odds are they are going to keep getting away with it. However, when prices, like they have recently, stagnate or drop, these incidents of fraud are going to be exposed quickly.
Lending institutions such as Wells Fargo, Bank of America and Chase are now more actively tracking parties involved in transactions they fund. This includes Realtors, appraisers and mortgage originators. Lenders have been hard on appraisers and loan officers for the last two years but what's new is that they are starting to now target Realtors.
If your transaction is declined, it may not be solely due to your loan qualifications but may also be due to the Realtor you are working with. Regional lending operations centers are starting to utilize blacklists to curb fraud and deny loans.
The Treasury Department’s Financial Crimes Enforcement Network, known as FinCen, released a report on fraud. The agency undertook the review after seeing a significant rise in so-called suspicious activity reports it received from U.S. banks concerning fraud. As a result, Fannie Mae, Freddie Mac and the large multi State lenders have incorporated additional security measures to detect fraudulent patterns and that also means tracking real estate agents.
Not Too Long Ago: Our Government Entity Freddie Mac Was Cooking the Books
Freddie Mac settles accounting-fraud charges
Home-loan giant to pay $50 million fine
uupdated 9/28/2007 7:48:13 AM ET 2007-09-28T11:48:13
WASHINGTON — Freddie Mac, the nation's second-largest financer of home mortgages, is paying a $50 million fine to settle civil securities fraud charges brought by federal regulators in a four-year accounting lapse.
In addition, four former executives at the government-sponsored company settled negligent conduct charges by agreeing to pay a total of $515,000 in civil fines and to make restitution totaling $275,548. They are former president and chief operating officer David Glenn, ex-chief financial officer Vaughn Clarke, and former senior vice presidents Robert Dean and Nazir Dossani.
"We take these charges seriously, and that's why the Freddie Mac of today is a very different company than the Freddie Mac of the past," said Richard Syron, Freddie Mac's chairman and chief executive officer.
McLean, Va.-based Freddie Mac neither admitted nor denied wrongdoing under the accord with the Securities and Exchange Commission announced Thursday, but it agreed to refrain from future violations of securities laws.
An accounting scandal erupted at Freddie Mac in June 2003 when it disclosed that it had misstated earnings by some $5 billion _ mostly underreporting them _ for 2000-2002 to smooth quarterly volatility in earnings and meet Wall Street expectations.
The company's top executives _ Glenn, Clarke and then-chairman and chief executive Leland Brendsel _ were ousted. The events shocked Wall Street, where Freddie Mac long had enjoyed a reputation as a steady performer and reliable corporate player.
Freddie Mac paid a then-record $125 million civil fine in 2003 in a settlement with the Office of Federal Housing Enterprise Oversight, which blamed management misconduct for the faulty accounting.
In September 2004, an equally stunning accounting scandal came to light at No. 1 mortgage finance company Fannie Mae. Regulators eventually imposed limits on the two companies' multibillion-dollar mortgage debt holdings, which they have been seeking to have lifted as a way to provide cash to the mortgage market in the recent turmoil.
Fannie Mae was fined $400 million in May 2006 in a settlement with OFHEO and the SEC _ one of the largest civil penalties ever in an accounting fraud case.
Fannie and Freddie were created by Congress to make mortgages affordable and pump cash into the market by buying blocks of home loans from lenders and bundling them into securities for sale to investors worldwide.
In a lawsuit filed in federal court in Washington, the SEC said Freddie Mac "engaged in a fraudulent scheme that deceived investors about its true performance, profitability and growth trends."
"As has been seen in so many cases, Freddie Mac's departure from proper accounting practices was the result of a corporate culture that sought stable earnings growth at any cost," SEC Enforcement Director Linda Thomsen said in a statement. "Investors do not benefit when good corporate governance takes a back seat to a single-minded drive to achieve earnings targets."
The SEC said the $50 million Freddie Mac agreed to pay will be distributed to shareholders injured by the alleged accounting fraud. The settlement with the company is subject to court approval.
In a separate action Thursday, OFHEO issued a consent order against Clarke, under which he agreed to cooperate with the agency in its proceedings against other former Freddie Mac executives. Clarke also agreed to pay a $125,000 civil fine _ which OFHEO deemed to have been satisfied by his payment of the same amount under the SEC accord _ and to forego any bonuses owed him by Freddie Mac.
OFHEO previously fined Glenn $125,000 and is pursuing action against Brendsel.
Clarke agreed to pay $29,227 in restitution under the settlement with the SEC. Glenn is paying a $250,000 civil fine and $150,000 in restitution, Dean is paying a $65,000 fine and $34,658 in restitution, and Dossani is paying a $75,000 fine and $61,663 in restitution.
Fraud, Collusion and Racketeering: Big Banks at Their Best
Talk about dirty laundry!
What’s now coming to light about how big banks roped tied and branded the U.S. economy and the developed world with their egregious money-making schemes may be too much for them to whitewash through their usual spin cycles.
How’s this for a quote, “Our investigation found a financial snake pit rife with greed, conflicts of interest, and wrongdoing.” (I know what you’re saying: “That’s news?”)
You can find that quote in two places. It’s posted on Senator Carl Levin’s website , and in the United States Senate Permanent Subcommittee On Investigations’ report titled, WALL STREET AND THE FINANCIAL CRISIS: Anatomy of a Financial Collapse. The just-released two-year bipartisan investigation is being pushed center-stage by Levin (D: MI) the Subcommittee’s chairman, and Senator Tom Coburn (R: OK), ranking minority member on the Investigations Subcommittee.
The 635-page report with more than “700 new documents totaling over 5,800 pages” is not a quick read. But, the truth is, it’s so juicy I’m trying to secure the movie rights.
You already know the storyline. The script “catalogs conflicts of interest, heedless risk-taking and failures of federal oversight that helped push the country into the deepest recession since the Great Depression.”
Of course there are lots of twists and turns in the plot, I mean report. And the cast of characters is a who’s who of Great Recession actors, including Moody’s Corporation, Standard & Poor’s, The Office of Thrift Supervision (OTS), Merrill Lynch, Deutsche Bank, Citigroup, and of course the star of the show, Goldman Sachs.
Here’s one of the nicer things the report says about Goldman, “At the same time the firm was betting against the mortgage market as a whole, Goldman assembled and aggressively marketed to its clients poor quality CDOs that it actively bet against by taking large short positions in those transactions.” (Again you say, “That’s news?”)
We already know that last year Goldman, without admitting or denying civil fraud allegations, paid a record $550 million fine to settle charges it defrauded clients in a single CDO deal known as Abacus 2007-AC1. But what the report brings to light is that, not surprisingly, Goldman had many other such deals with names like Hudson, Anderson and Timberwolf that were similarly constructed.
While trumpeting the report, Senator Levin announced, “We will be referring this matter to the Justice Department and to the SEC.”
Meanwhile, in case you haven’t heard, the Justice Department is already investigating whether big banks schemed to manipulate pricing on hundreds of trillions of dollars (I’m not exaggerating) of loans.
Back in October of 2008 I wrote a piece claiming banks were cheating on a global basis. What I pointed to is what Justice is now investigating. What could they be charged with? How about collusion and possibly racketeering.
Don’t know what it is I’m talking about? I’ll lay out the dirty details on Wednesday. Stay tuned.
The heads of Fannie Mae and Freddie Mac were paid a total of $17.1 million during the past two years
BLOG VIEW: At what point did the Federal Housing Finance Agency (FHFA) make the transition from being merely inefficient to being blatantly incompetent? And will it be possible to stop the FHFA before it makes the transition from being blatantly incompetent to being a complete catastrophe?
In all fairness, the FHFA may be a mess, but at least it is a transparent mess: It recently openly acknowledged that the heads of Fannie Mae and Freddie Mac were paid a total of $17.1 million during the past two years. Even worse, the top six executives at the government-sponsored enterprises (GSEs) were paid a total of $35.4 million over the past two years.
And in case you forgot how much profit Fannie Mae and Freddie Mac generated since they've been in conservatorship, I will remind you: zero dollars.
In comparison to the GSE chiefs, President Obama has an annual salary of $400,000. If you are wondering why the leadership of Fannie Mae and Freddie Mac are receiving higher salaries than our nation's head of state, it is because the FHFA never bothered to create written procedures to evaluate annual executive compensation levels.
One might imagine that someone in the FHFA could have taken a few minutes to at least create a rough draft of these procedures. After all, the GSEs have been under federal control since fall 2008. However, there are other financial matters that preoccupied the FHFA's accounts-payable department - most notably, paying the legal bills for the former GSE executives who are the subject of multiple lawsuits.
In January, Rep. Randy Neugebauer, R-Texas, chairman of the oversight subcommittee of the House Financial Services Committee, publicized the sorry fact that $410.7 million in taxpayer money was spent on legal expenses incurred by Fannie Mae and Freddie Mac since they were put into conservatorship. This figure includes $162.4 million spent on securities-related lawsuits and indemnification agreements for former executives of Fannie Mae and Freddie Mac.
Okay, now why is the FHFA footing the legal fees for the former executives who were responsible for running the GSEs off the road? Edward J. DeMarco, acting director of the FHFA, told The New York Times that he felt that "the advancement of such fees is in the best interest of the conservatorship."
For the record, an "acting" director has overseen FHFA operations since August 2009. President Obama never got around to nominating a genuine director until November 2010, but his choice - North Carolina Commissioner of the Banks Joseph A. Smith Jr.- never received Senate confirmation and withdrew his candidacy in January. Three months after the Smith departure, the director's chair is still vacant and there is no signal that a replacement will be named in the immediate future.
With all of the talk in Washington about cutting federally funded waste, it would seem that the FHFA is ripe for the chopping block. Clearly, the FHFA is continuing the example of its predecessor agency, the Office of Federal Housing Enterprise Oversight, in being completely incapable of getting a handle on the Fannie and Freddie fiasco.
My advice is fairly simple: Shut down the FHFA immediately and transfer the regulatory oversight of Fannie Mae and Freddie Mac to the Office of the Comptroller of the Currency (OCC). This is not being suggested as a tribute to the OCC's history of perspicacity and hands-on leadership - for starters, an "acting" director is also overseeing that agency. But until such time that the fate of Fannie and Freddie is determined, I have more confidence in the OCC at the helm than I have in the FHFA.
As for the other GSE that is under the FHFA's watch, the Federal Home Loan Banks, I would transfer the regulatory responsibility over to the Federal Reserve - if only to spare the OCC from having too much work (it also inherited the workload of another failed regulator, the Office of Thrift Supervision).
And while these changes are going on, I would urge Congress to put Fannie Mae and Freddie Mac back into the federal budget, which would enable proper oversight of their funding and operations.
As an aside, I find it fascinating that the Consumer Financial Protection Bureau's Elizabeth Warren has yet to raise a peep about this situation. After all, U.S. taxpayers are being ripped off by a broken housing finance system that is running up billions in losses while enriching the bank accounts of a select few. Or does Warren feel that corruption is excusable when it occurs outside of the private sector?
- Phil Hall, editor, Secondary Marketing Executive