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Home Buyers and Sellers Beware! Fraud and more Fraud in Illinois

Posted in Credit Notes,Financing- Loss Mitigation,Legislation by Administrator on the August 23rd, 2012

Home Buyers and Sellers Beware!  Fraud and more Fraud in Illinois

Mortgage fraud not only continues to plague the housing market, it’s on the rise.  Whether you are considering a Loan Modification or Short Sale you need to be counseled by professionals in the business.  However, who can you trust to handle your most precious financial documents and negotiate/close the transaction?

When you sit down to sign on the dotted line for your contract to sell, mortgage to buy or home loan workout you’d better make sure you aren’t a victim – that’s especially true if you are a struggling homeowner.

Federal regulations and a more vigilant mortgage industry are trying to decrease the numbers of loan origination fraud and misrepresentation cases, but fraud that targets distressed homeowners and collusion schemes are on the rise, according to the LexisNexis 14th Annual Mortgage Fraud Report.

With a shift that more often targets vulnerable homeowners, the Federal Bureau of Investigation’s (FBI) mortgage-related Suspicious Activity Reports (SARs) numbered 93,508 in 2011, up from 33 percent in 2010, according to LexisNexis.

Consumers must be particularly vigilant in Florida, Michigan, California, Illinois and New York where industry fraud and application misrepresentation is most common.

Overall, the most common types of fraud in 2011 were application and appraisal fraud/misrepresentation. With  mortgage origination’s, application and verification of deposit fraud/misrepresentation were tops.

Not unlike organized crime; collusion, involving multiple professionals running schemes, is on the rise in foreclosures, short sales and the REO market.

The mortgage industry’s Mortgage Industry Data Exchange (MIDEX), incidents of verified fraud and material misrepresentation in loan originations, reveals 7 percent of the cases involved collusion in 2009, 9.7 percent in 2010 and 6.8 percent for 2011.

“This means that not only are more incidents involving multiple professionals being noted – but, as incidents submitted to MIDEX, they are being investigated, verified and reported.   According to the FBI’s Financial Crimes Report to the Public for fiscal year 2010 to 2011, ‘Current investigations and widespread reporting indicate a high percentage of mortgage fraud involves collusion by industry insiders, such as bank officers, appraisers, mortgage brokers, attorneys, loan originators and other professionals engaged in the industry.

So, What do you do about avoiding Fraudsters?

Let’s offer the following tips:

Know your team – Given collusion is an up and coming fraud segment, it behooves you to know who is working for you.

Check out your team- A referral from a trusted source, still check references, that licensing  is up to date and see if they are involved in reputable clubs and affiliations with good standing.

Interview several real estate agents (home inspectors, title companies, mortgage brokers, etc.) and check references before you commit to one.  Sometimes the one that tells you the good and the bad is better than someone that only gives you the good side in an attempt to sway you over to them.

Another important team member, that many under rate, is the real estate attorney.  In Illinois, an attorney is a necessary for pulling Title and helps with researching zoning, violations and is your fresh set of eyes overseeing the real estate transaction.  Find the best Real Estate Attorney-he’s worth his weight.  I repeat regularly, “your divorce atty. is not a Real Estate atty”.

An attorney is hired by you to represent your interests and ensure your rights are protected. they will help you understand all the legal documents and exactly what legal liabilities you have accepted.  There’s always the right way to protect yourself and the wrong way to handle issues.  Atty’s. are there to help you stick to what is the acceptable way.  let them keep everybody in check regarding your affairs.
Know your financing representative – Don’t let someone coax you into borrowing more than you know you can afford on a long term basis, just because you can qualify for a higher amount at the moment.  Short term thinking got our economy bloated and it burst.  Long term thinking helps you plan for a rainy day and keep it all in perspective.

Know what you are signing – Don’t sign documents with missing or incorrect information, including your income, debts or length of employment. Don’t sign anything you don’t understand. If you need help, consider reviewing the documents with your real estate agent, a real estate attorney truly anyone that is a 3rd set of eyes remember if it’s too good to believe- it probably is.
Get counseled – Speaking of counselors, taking a homeowner, financial or housing class or counseling session is an investment in your investment.  Classes in investing, rental management and credit building.  There are clubs and meetups, affiliations for everything these days.  Maybe helping at the local housing authority or talking it over with friends over lunch.

Beyond a sit-down-and-listen seminar or workshop, do not keep things a secret from your friends it’s proven to be one of the best things you can do to guard against fraud, protect your homeownership and avoid falling into trouble.  Anyone that asks you “not” to discuss this “great deal” with anyone needs to back off!

Wind Down of GSEs-FANNIE/FREDDIE can’t continue to hold profits

Posted in REO -Lender Owned Properties by Administrator on the August 17th, 2012

The Treasury Department Friday morning unveiled a bold new plan to speed up the dissolution of Fannie Mae and Freddie Mac, saying the two can no longer retain profits and must reduce their massive portfolio holdings at an annual rate of 15%.

In particular, Treasury notes that it wants to end what it calls “the circular practice” of the agency advancing funds to the GSEs simply to pay dividends back to Treasury.

According to a statement issued by the government: “Those portfolios will now be wound down at an annual rate of 15%—an increase from the 10% annual reduction required in the previous agreements. As a result of this change, the GSEs’ investment portfolios must be reduced to the $250 billion target set in the previous agreements four years earlier than previously scheduled.”

Currently, Fannie and Freddie hold about $1.4 trillion in mortgage assets.

Both GSEs recently returned to profitability–even after factoring in 10% dividend payments they must pay to Treasury which controls a special class of their preferred stock.

“With today’s announcement, we are taking the next step toward responsibly winding down Fannie Mae and Freddie Mac, while continuing to support the necessary AUG 17, 2012 process of repair and recovery in the housing market,” said Michael Stegman, counselor to the secretary of the Treasury for Housing Finance Policy.  “As we continue to work toward bipartisan housing finance reform, we are committed to putting in place measures right now that support continued access to mortgage credit for American families, promote a responsible transition and protect taxpayer interests.”

The agency said it wants to make sure that, “every dollar of earnings each firm generates is used to benefit taxpayers, and support the continued flow of mortgage credit during a responsible transition to a reformed housing finance market.”

Could this spur liquidations of  REO properties in the near future- they can’t run their companies forever…

AUG 17, 2012

Wells Fargo is helping move damaged REO properties by donating them to renovaters that will rehab and resell

Posted in Lender News Reports,Welcome by Administrator on the August 16th, 2012

Through the REO program, Wells Fargo donates foreclosed homes to Rebuilding Together affiliates in eight cities. Participating Rebuilding Together Affiliates are in the following cities: Baltimore, Los Angeles, Oakland, Philadelphia, Providence, St. Paul (Twin Cities), Tampa, and Washington, DC.  Our City of Chicago could use a similar program to help blighted areas which were once viable growing areas.

Each Rebuilding Together Affiliate then renovates the donated REO property and works with a real estate agent to sell the home to a buyer that is between 80-120% of the area median income (AMI). As part of the initiative, buyers are also required to complete a Homebuyer Education class and show a certificate of completion before closing.  The buyers also must live in the home; homes cannot be sold to an investor or rapidly resold to capture profits.

Once the home is sold, the proceeds from the sale are returned to the Rebuilding Together affiliate’s operating fund, allowing the organizations to continue to make critical home repairs for homeowners in need.

“We are so grateful to Wells Fargo for helping Rebuilding Together establish the REO program as a way to transform REO properties back toward viable homes in stable communities, while helping low- and moderate-income families obtain safe, healthy and affordable housing,” said Gary A. Officer, President and CEO of Rebuilding Together, “The sale of these properties can provide critical income to support Rebuilding Together Affiliates in their core mission work.”

In 2011, Wells Fargo Housing Foundation programs delivered a record $23.4 million, 697 discounted and 1245 donated properties to support local affordable housing and community revitalization programs.

“Wells Fargo is proud to support the work of Rebuilding Together to help create affordable and sustainable housing opportunities for low-to-moderate income families,” said Kimberly Jackson, head of the Wells Fargo Housing Foundation.

The first home to be sold under the program was in Philadelphia, PA where the affiliate renovated the home in the Greater Northeast neighborhood and sold it to a first time home buyer who is also a police officer candidate.

In Tampa, FL the home donated by Wells Fargo sold within three weeks of it being donated to Rebuilding Together Tampa Bay.

Rebuilding Together Twin Cities also has renovated its first house in Richfield, MN through the program and put it up for sale.  Rebuilding Together- Twin Cities has plans to renovate and sell a total of four homes this fiscal year.

In addition, Wells Fargo has made grants to other Rebuilding Together affiliates (Milwaukee and New Orleans) for the purpose of rehabilitating and/or purchasing REO properties (Roanoke and Sacramento) as part of their asset building strategies and to support the mission of their local organizations.

ABOUT REBUILDING TOGETHER Rebuilding Together believes in a safe and healthy home for every person. Rebuilding Together provides critical repairs to an existing home, addressing both structural issues and those that affect the health of the homeowners. House by house, block by block, we work with our nearly 200 affiliates & 200,000 volunteers, who are skilled tradesperson’s, corporate partners and everyday citizens, to repair homes, to stabilize and revitalize communities. For nearly 25 years, we have seen the benefits when people remain in their homes: lives are improved and communities are revived.

For more information: www.RebuildingTogether.org. You can also follow Rebuilding Together on Twitter @rebldgtogthr or become a fan on Facebook at Facebook.com/RebuildingTogether.

About Wells Fargo Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.3 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 9,000 stores, 12,000 ATMs, the Internet (wellsfargo.com), and has offices in more than 35 countries to support the bank’s customers who conduct business in the global economy. With approximately 265,000 full-time equivalent team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 26 on Fortune’s 2012 rankings of America’s largest corporations.

Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially.

SOURCE Rebuilding Together

Who are the LIBOR 16 & HSBC lenders- “Terror Supporters”?

Posted in Financing- Loss Mitigation,Lender News Reports by Administrator on the August 1st, 2012

The LIBOR 16 & HSBC Terror Supporters

How encouraging to catch up on the news last night only to discover that, while there are still “no real conspiracies” in the world, however you can never fault greed and human nature.

So, much to my surprise after watching a few episodes of the Daily Show, I find out about HSBC and the LIBOR people (who knew they were actually people?) are both in trouble for some phenomenally insane practices!

The LIBOR Group

For those who do not know, LIBOR is the rate by which money is lent from bank to bank. I thought, as did many, that this was somehow created by a master computer formula based on a Boolean equation in the bowls of the Barclays Banking system.   At the very least it was a bunch of men and women sitting around a conference room behind closed doors discussing what the rate should be based on the worlds economics…

FOR GOODNESS SAKE, It is the rate by which we base our adjustable rate mortgages on in the United States…

Apparently the rate is set by 16 guys in London and you can send them an email and change the rate to help your bank…

Meaning that the actual LIBOR rate is complete CRAP and means JACK-SQUAT!
But, How does this effect homeowners?

I am sure there will be some wise-guy-attorneys who think they will now overturn mortgages that were based on adjustable rates based on the LIBOR for homeowners who are not making any payments. Further though, it will have zero bearing and all of these cases will get tossed out of court on one level or another. It’s a lawyers dream equivalent of clouded titles and robo-signing of documents.  There is a possibility it could be used as an escalation and even possibly used to purchase a property below actual fair market value (which is currently artificially accelerating from the lack of inventory and liquidation of REO’s).

HSBC (Hong Kong and Shanghai Banking Corporation), Terror Cells and Money laundering!

Yes, you read that correctly, HSBC has links to (including but not limited to) Terror Cells and Drug Cartels. They also gave a campaign contribution to Michelle Bachman and that just makes HSBC look bad for supporting a not-so-bright-yet-attractive politician.

I am wondering on the supposed lawyer-fringe thinking on this for homeowners… like:

“My client no longer wants to make payments to HSBC because they have been known to support Terrorists, Drug Cartels, and Michelle Bachman…”

“My client fears that they will be watched by the TSA for supporting terrorists and Cartels”

“My client fears Michelle Bachman may campaign on their door…”

Whatever the case, it was a ‘bar’ set by MANY banks including Chase, Bank of America, and Wells and that was long ago and far away for them. Almost every bank in the United States has allegedly accepted money from questionable sources. I would guarantee that many banks at this very moment have money that comes from ‘blood diamonds’, ‘child labor’ or they have all supported DUMB politicians!

MY GREATEST FEAR IN ALL OF THIS…

Obviously an attorney will try and use these in an attempt to get a homeowner out of payments and they will fail! Far worse, it is the medias perception that will be handed down to homeowners…

Such fallacies as:

“I heard on the news that the president is mad at the LIBOR thing and he is gonna give us our home for FREE”

“My loan is with HSBC and I know someone who got their house for free cause they hired an attorney and sued them for supporting Michelle Bachman”

Whatever!

NONE OF THIS WILL HAVE AN IMPACT ON SHORT SALES! It’s just more influence knocking on the door that homeowners need to know about…

Just make sure you understand the truth behind the headlines and do a Short Sale so you can move on with your lives instead of paying for pie in the sky schemes!