Marc's Mortgage Matter's

With an array of real estate crimes, ranging from deed forgery to mortgage fraud schemes, adding to foreclosure rates in Brooklyn neighborhoods, the borough’s district attorney, Charles J Hynes, says the time has come for a specialized unit to investigate and prosecute them.

The need for such an office has been building, Mr. Hynes said, announcing the new unit last Friday. As foreclosure rates have sharply risen in central Brooklyn neighborhoods like Bedford-Stuyvesant, Mr. Hynes’s office, with limited resources, has been forced to turn down real estate investigations, and instead has referred victims to civil court or relied on federal prosecutors, who generally concentrate on larger schemes.

Mr. Hynes said the new 12-member unit would be financed for two years with $875,000 in federal money and would help people like Levi Latham, 75, a Brooklyn retiree whose house was, in effect, stolen by a woman who took Mr. Latham’s personal information, a prosecutor said. After executing and recording a false deed, the woman is now listed as the owner of the house.

“There was mail coming in her name to my address, and I found it very strange,” said Mr. Latham, who joined Mr. Hynes and Senator Charles Schumer at a news conference announcing the new unit. “Regardless how vigilant you are, these scam artists are always one step above.” The woman’s lawyer could not be reached for comment.

Mr. Schumer said he secured the funds for the unit in the 2009 omnibus appropriations bill. It is to be staffed by new hires and workers reassigned from other parts of the office, and will have five financial investigators, four lawyers, a unit chief, a paralegal and a detective investigator.

“I am hopeful it will be a model so that this will happen in the other boroughs, in the suburbs that have the same types of problems, and around the country,” Mr. Schumer said.

Similar units have been created by prosecutors in other regions with high foreclosure rates, providing a sketch of how the housing crisis has unfolded around the country.

An eight-member unit in the office of the Suffolk County district attorney, Thomas J. Spota, recently arrested more than two dozen people in a $9 million mortgage fraud scheme. In Prince George’s County, Md., a two-member unit in the office of the county state’s attorney, Glenn F. Ivey, is handling dozens of cases in the aftermath of a housing boom that resulted in hasty and often dubious mortgages.

In Cuyahoga County, Ohio, one of the centers of the national foreclosure crisis, the authorities have prosecuted 219 people since January 2007, said Ryan Miday, a spokesman for the county prosecutor, Bill Mason.

The constellation of defendants in Ohio provides a glimpse of what the Brooklyn investigators might face: According to Mr. Miday, they include “mortgage broker companies and their loan officers, title companies, real estate developers, rehab contracting companies, third-party down-payment companies, appraisers, sellers and buyers.”

Richard K. Farrell, an investigator who will head the Brooklyn unit, said the houses in neighborhoods like Bedford-Stuyvesant had become easy targets, like banks. “Everyone knows where the money is,” he said.

Ok so yesterday I'm listening to 880CBS and I hear rates are 4.625 lowest in decades and everyone is refinancing. Little is said about most folks don't qualify, have scores over 740 or let alone have any equity to even breath in their homes.. Little is said about rates going up to 5% in hours after a 13 minute stint at 4.50% on Tuesday I believe it was - Yup I'm hearing voices too. Rates are really quite low though - many do qualify for under 5% so there is hope thank goodness...

Another angle; What is the agent/broker on the street saying? “The bigger problem that continues to persist is the expectancy of rates to drop. Last week after the meeting that is all you heard about. ‘Bernanke was a genius.’ ‘This will make the banks have to lend.’ The banks do not give two hoots. They are calling their own shots and probably laughing as they got what they wanted and no one regulated them. Now they still can not drop rates because they are under staffed and can not handle the volume. The big banks tell us to kiss their behinds because their books are more important than saving our economy. We should have let some more of the big banks tumble. This would have at least left some fear in the banking system that no bank is to big. So we are left with tons of people trying to refinance to save money and all they hear on a continual basis is that rates should be getting lower and we are left to tell them, no because the banks are not staffed well enough to handle the volume.”

Then we're followed by news of people flocking to Lord & Taylor to shop, and is the economy about to go North? Huh? Who is shopping now? Its amazing how news gets reported warped and reprocessed.

Hospital regulations require a wheel chair for patients being discharged. However, while working as a student nurse, I found one elderly gentleman already dressed. He was sitting on the bed with a suitcase at his feet, and he insisted he didn't need my help to leave the hospital.

After a chat about rules being rules, he reluctantly let me wheel him to the elevator. On the way down I asked him if his wife was meeting him.

“I don't know,” he said. “She's still upstairs in the bathroom changing out of her hospital gown.”

The economic downturn has more Americans shifting to smaller homes. For example, Bernie Madoff just traded a 3,500 square foot penthouse for a 9 x 10 windowless studio in lower Manhattan.

I have rejoined Fairmont Funding after a short 6 week stint at Wall Street Mortgage. I know I'll miss the folks at Power Express as they are a damn good bunch, just wasn't a match for me though at this time. Fairmont was an easy choice after spending over ten years there up to around two years ago when the mortgage mess just started to hit everyone.

Thanks Michael, Emmy, Leslie, Barbara, Tony, Dale and of course Keith. You guys (and I probably missed a few - sorry) were very accommodating to me :)

Anyone trying to modify a mortgage, and then having the borrower (who misled the broker during the original process) mislead them is in a difficult position. So what would you call a modified loan to a borrower who exaggerated (lies) about how little he/she makes (and has) to get a loan modified after lying to get the loan in the first place? A reverse-liar loan? An inverted-liar loan? A double-prevaricator loan? A pathological liar loan? A serial falsifier loan? A storyteller loan? A fibber note? A reverse truth loan? Stay tuned…

If you have not heard from me in the last 30-60 days - call to inquire if rates are low enough to make a REFI worthwhile at this time. Last week rates were not so good - as were the few weeks prior - but this past week rates fell alot! If I told you to wait abit call me or email me is probably best at mpreger@fairmontfunding.com . You may still not qualify due to stringent underwriting, credit and/or appraisal value issues but at least it never hurts to try. :)

Across the country, attorneys general have already begun indicting dozens of loan processors, mortgage brokers and bank officers. Last week alone, there were guilty pleas in Minnesota, Delaware, North Carolina and Connecticut and sentences in Florida and Vermont — all stemming from home loan scams.

With the Obama administration focused on stabilizing the banks and restoring confidence in the stock market, it has said little about civil or criminal charges at the federal level. But its proposed budget contains hints that it will add to this weight of litigation, including money for more F.B.I. agents to investigate mortgage fraud and white-collar crime, and a 13 percent raise for the Securities and Exchange Commission.

Officials at the Justice Department have said little in public about their plans. But people who have met with Attorney General Eric H. Holder Jr. say he is considering a range of strategies.

“It’s clear that he and other top-level members of the Obama administration want to seize the opportunity to send a message of zero tolerance for mortgage fraud,” said Connecticut’s attorney general, Richard Blumenthal, who attended a meeting with Mr. Holder and a number of state attorneys general last week in Washington. “The only question is when and how they will do it.”

One person who had discussed the matter with Mr. Holder, but declined to be identified because he was not authorized to speak for the Justice Department, said that the attorney general was deciding whether to form a task force to centralize the effort or allow state attorneys general to develop cases on their own.

A Justice Department spokesman, Matthew A. Miller, would not comment, other than to write by e-mail, “It will be a top priority of the Justice Department to hold accountable executives who have engaged in fraudulent activities.” 

To that snippet I add my hope they convict 'em all, and throw away the keys!

During a visit to the mental asylum, a visitor (a unemployed mortgage broker) asked the Director, “How do you determine whether or not a patient should be institutionalized?”
“Well,” said the Director, “we fill up a bathtub, then we offer a teaspoon, a teacup and a bucket to the patient and ask him or her to empty the bathtub.”
“Oh, I understand,” said the broker. “A normal person would use the bucket because it's bigger than the spoon or the teacup.”
“No.” said the Director. “A normal person would pull the plug. Do you want a bed near the window?”

Seen on a bumper sticker: “CHANGE....... it's all we're gonna have left!”

Private mortgage insurance, known to many as P.M.I., is a necessary evil for borrowers who cannot afford the 20 percent down payment often required by lenders. But now, with losses mounting within the mortgage-insurance industry, some applicants are being turned away, while others will have to pay higher premiums.

Meanwhile, the Mortgage Guaranty Insurance Corporation of Milwaukee said that it would no longer insure cash-out refinance mortgages and mortgages for second homes or manufactured homes.

The company also placed restrictions on broker-originated mortgages, limiting insurance only to those loans where the borrowers make at least a 10 percent down payment and have a credit score of at least 720.

The Mortgage Guaranty Insurance Corporation declined to comment on the new policies. But Thomas Taggart, a spokesman for the PMI Group, said the changes within his company reflected those occurring throughout the industry. “A lot of different mortgage-insurance companies are putting restrictions on different segments,” he said.

“We’re still writing new business,” Mr. Taggart added. “We just have to be prudent about how we manage that.” Because the recent changes are not consistent from one company to the next, borrowers in need of P.M.I. are unlikely to be shut out completely.

In the most areas though, borrowers can still seek government-insured loans like FHA financing. But they may not always be a good fit. Borrowers face income restrictions, and the maximum loan amount is $625,500 in the New York City and Northern New Jersey area, and $511,750 in Fairfield County, Conn. That is a considerable jump from 2007, when the limit was $363,000, but still not enough to buy a home in many neighborhoods. In a few weeks that limit will supposedly rise to $729,000 which is good news.

Mortgage experts say that there are some conditions under which lenders will offer mortgages to those with less than a 20 percent down payment or equity in a home. In those instances, a borrower will not only need to have excellent credit and adequate income but be in an area with stable housing prices.

Housing market conditions, however, have been less than stable in most regions, and the rise in mortgage default rates has been largely responsible for pushing up P.M.I. premiums.

Last year, Genworth Financial’s domestic mortgage-insurance business announced a 20 percent rate increase. Pending approval from the state insurance department, a New York homeowner with a $200,000 mortgage would pay about $17 more per month on a typical loan, or a total of $103.33. (The average P.M.I. rates are about 0.6 percent of the loan amount on a basic loan with 10 percent down.)

But increases would apply only to new loans, because mortgage insurance companies evaluate a borrower’s default risk only once — at the time of an application. Some analysts, though, expressed concern about new borrowers.

“If mortgage insurers run out of capacity to write new business,” said Howard Glaser, a principal of the Glaser Group, a mortgage consulting firm in Washington, “the last avenue for purchasing a home with less than a 20 percent down payment will be closed off for a lot of people.”

Note: Lately with many having a difficult time putting down 20% we have approved many more FHA loan then in the past. Feel free to discuss the options if you fall into the category of having only X amount of funds to work with.