Marc's Mortgage Matter's

Realtors and mortgage professionals know that divorce can often lead to the formation of a new household. According to the Census Bureau, the national divorce rate was 9.2 for men and 9.7 for women per 1,000. Men and women in the South had higher rates of divorce in 2009 than in other regions of the country, 10.2 per 1,000 for men and 11.1 per 1,000 for women (versus the lowest region - the Northeast - with 7.2 and 7.5 respectively). But there is an explanation: "Divorce rates tend to be higher in the South because marriage rates are also higher in the South," said Diana Elliott, a family demographer at the Census Bureau. "In contrast, in the Northeast, first marriages tend to be delayed and the marriage rates are lower, meaning there are also fewer divorces." But marriage rates, which often lead to the consolidation of households, were higher: 19.1 for men and 17.6 for women.

Huh? Now mortgage-related law firms are engaging in fraud? "An extensive mortgage-fraud ring led by the law firm Kramer and Kaslow has been stopped in its tracks." The California Department of Justice (DOJ) and the State Bar of California is going after Kramer and Kaslow, headquartered in Calabasas (Countrywide's old stomping grounds).

Don't do the crime if you can't do the time. In the Chicago area, a man who directed a mortgage fraud scheme that cost lenders about $16 million for properties will spend more than 17 years in prison. The scam involved 120 residences...$16 million in mortgage loans not repaid or recovered through foreclosure sales...guilty on nine counts of wire fraud, four counts of bank fraud and three counts of mail fraud. It was the usual story that the public hears about now in the newspapers, where he orchestrated the fraudulent purchase and resale of dozens of residences, pocketed undisclosed payments and kickbacks from each transaction and also controlled about $3.1 million in post-closing funds over the course of the scheme, according to court records.

The hurricane did its share of damage across the Atlantic Seaboard, and investors are reacting: it should come as no surprise that, for the most part, additional appraisals with updated photos will be required. Wells Fargo told its correspondent clients, "All appraisals completed prior to the disaster will require an acceptable property inspection report completed after that date. Neither Wells Fargo nor FEMA have yet to issue a declaration specifying impacted areas. It is expected that FEMA will announce a Declaration stating specific disaster areas within the next few days. Reminder: Precautions must be taken for loans originated within affected areas. Regardless of whether FEMA has formally declared a disaster, all transactions showing any indication of damage to the collateral should comply with the published Disaster Policy Guidelines as outlined in Seller Guide Sections 820.19 and 820.20 (Government Loans must follow FHA/VA guidance). States with locations that may have been impacted by this hurricane include: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington D.C."

The sound of August's crashing markets faded a little behind us this week as we turned the calendar to September. The shockwaves of the debt limit showdown, US credit rating downgrade and east coast earthquake have calmed somewhat, leaving more tranquil markets in their wakes.

Hurricane Irene wasn't tranquil at all for millions of people, with record-level or even unprecedented flooding and damage all up and down the eastern seaboard, and especially in inland areas. The trail of destruction from Hurricane Irene is wide, long and appreciable, with millions of people still fighting floodwaters, not to mention the arduous tasks of cleanup and repair which are to follow. If they must come, here's hoping the storms of September (financial or otherwise) are more kind and less damaging all around.

Minutes from the August Federal Reserve Open Market Committee meeting were released this week. If nothing else, the minutes revealed a lack of unanimity among members with regard to monetary policy. At the meeting, the Fed announced that they would keep short term rates low until likely mid-2013, but some members of the committee expressed that more economic supports were warranted, while others didn't want to be held to specific any time period for low-rate policy. The next Fed meeting will be a two-day affair, and it seems very likely that incoming August data will be a strong influencing factor as to whether or not the Fed will reveal any new plan to support economic growth.

The job market came to a complete standstill in August, no doubt due partly to the uncertainty surrounding the debt limit outcome, but also due to the downshift in the economic climate both here and abroad. The Labor Department reported that job growth for August was exactly zero -- no hiring at all -- and the last two employment reports saw their gains trimmed by some 58,000 jobs. A different survey showed that the nation's rate of unemployment remained at 9.1% for the month, but the actual percentage of folks not working is of course much higher than that, since the survey only counts people actually looking to find work as unemployed. Millions of potential workers have given up looking and thus aren't included in the official count. Without at least some movement in the labor market, it will be very difficult to get the economy moving faster than the 1% GDP rate last reported.

Summer unofficially comes to a close with the advent of Labor Day on Monday. Although it brought new record low mortgage interest rates, we would have gladly traded them for somewhat higher interest rates as a result of improving economic conditions. At this stage of the recovery, an unemployment rate falling toward eight percent would undoubtedly do much more good than low interest rates available only to a diminishing pool of borrowers. It's not as though everyone who wants to refinance has done so, but more that the vast majority of those who wanted to and could have already done so. With those new loans coming at record or near-record low rates, they may never need to do so again.

Summer technically still has a few weeks to run, but fall mode start to kick in before too long. In years past, the quickening of activity has set us on a new course. Last year, rates began a run down to then-record lows in October; 2009 produced a downward draft, too, and also featured a dip in though October. Will recent history repeat itself, or will the economy begin to warm a bit? We'll need to wait to see, but for the moment, rates are most likely to be fairly steady again next week.

Here's some hurricane advice for the next one, I believe thanks to Dave Berry:

First, you need to understand two basic meteorological points: (1) there is no need to panic.
(2) We could all be killed.

You need to consider these important hurricane preparedness items. Homeowner's insurance: If you own a home, you must have hurricane insurance. Unfortunately, if your home is located in Florida, or any other area that might actually be hit by a hurricane, most insurance companies would prefer not to sell you hurricane insurance, because then they might be required to pay you money, and that is certainly not why they got into the insurance business in the first place.

If you live in a low-lying area, you should have an evacuation route planned out. (To determine whether you live in a low-lying area, look at your driver's license; if it says "Florida" you live in a low-lying area.) The purpose of having an evacuation route is to avoid being trapped in your home when a major storm hits. Instead, you will be trapped in a gigantic traffic jam several miles from your home, along with two hundred thousand other evacuees.

If you don't evacuate, you will need a mess of supplies. Do not buy them now! Tradition requires that you wait until the last possible minute, then go to the supermarket and get into vicious fights with strangers over who gets the last bottle of water.

Of course these are just basic precautions. As the hurricane draws near, it is vitally important that you keep abreast of the situation by turning on your television and watching TV reporters in rain slickers stand right next to the ocean and tell you over and over how vitally important it is for everybody to stay away from the ocean.