Free Republic

Policy-wise, this is an oldie but a goodie, I guess, even though we’re still spending tons of money on Freddie Mac and Fannie Mae more than four years after the crash. Wells Fargo CEO Robert Kovacevich can't believe that we haven't learned the lesson from 2008 and gotten the government out of the home mortgage industry, and tells CNBC's Squawk Box that the two organizations made that crash exponentially worse than it needed to be: CLICK ABOVE LINK FOR THE VIDEO Fannie Mae and Freddie Mac exacerbated the 2008 mortgage crisis, and that’s why the U.S. government should get out...

The radio show “Marketplace” wanted to chat this morning about the news that the Obama administration might extend its mortgage-refinancing programs to include borrowers whose mortgages aren’t backed by the government. It’s one thing for the Administration to pressure loan modifications (with Congress’ blessing) for the FHA insured mortgages. It is even a bigger stretch for the Administration to pressure Fannie Mae, Freddie Mac and FHFA to perform loan modifications (specifically principal writedowns since Fannie Mae and Freddie Mac are private corporations … in conservatorship. But it quite another thing for the Administration to pressure non-government entities to make principal...

A new and extensive analysis of 2.4 million loans insured by the Federal Housing Administration in recent years shows a pattern of risky lending that could generate $20 billion in losses and harm thousands of the nation’s most vulnerable borrowers. By ignoring risks in loans it insured in 2009 and 2010, the study concludes, the F.H.A. is imperiling both borrowers and taxpayers who stand behind the agency. The analysis emerged less than a month after the F.H.A.’s auditor submitted a troubling report on the financial soundness of its insurance fund. In mid-November, the auditor estimated that the fund, which backs...

Since 2007, distressed homeowners have dodged massive bills due to a tax-time saving grace: The debts they were "forgiven" in foreclosures, short sales or principal reductions were also scrubbed from their dues to Uncle Sam. But that tax break is set to expire Dec. 31, and with it more than $1 billion in tax savings to homeowners in trouble. Foreclosed? You'll pay taxes on the money you owed the bank. Close on a "short sale" for less than you owed on your mortgage? You'll still owe part of it to the IRS. Even homeowners whose loan principals are trimmed would...

Former ACORN employee and whistleblower Anita Moncrief said ACORN is far from dead and is still “colluding” and “working with” the President Barack Obama's Department of Justice. Moncrief appeared with Conservative commentator David Webb in a one-hour special about the “District of Corruption” movie on FOX News’ “Hannity.” She specifically discussed how community organizing groups on the left put pressure on institutions like banks to get them to relent to their “equal outcomes” agenda. Moncrief said ACORN would help people report food stamps and other “under-the-table” incomes as income to get subprime mortgages that eventually caused the housing market to...

According to the Mortgage Bankers Association (MBA), mortgage applications dropped 2.2% from the previous week. Mortgage purchases applications rose 2.66% while refinancing applications fell by 3.24%. Purchase applications remain in “the red zone” since 2010 and far below the heady days of 2007. Those are the seasonally adjusted numbers. On a non seasonally adjusted basis, purchase applications actually fell 11.27% and refinancing applications fells 12.91%. Low mortgage rates enable by Fed easing are of little help if credit standards remain elevated. And a stumbling employment market doesn’t help. Initial jobless claims remain above 400k. While there is a temptation to...

The nation’s biggest bank and its largest mortgage lender, was charged by federal prosecutors with running a decade-long mortgage fraud involving recklessly underwritten US-insured home loans to fatten its bottom line.

Mortgage rates continue to hit new lows, but the ultra-low rates are out of reach for many would-be borrowers who can’t meet strict underwriting standards. And new national data suggests that underwriting standards for getting a loan are getting even stricter, too. FICO credit scores on all new loans closed in August averaged 750. That is nine points higher than one year ago, according to a survey of about 2 million mortgages by Ellie Mae Inc., a mortgage technology firm used by many lenders. For home owners who refinanced in August, the average FICO score was 769—even higher—at Fannie Mae...

Misuse of the FHA Preforeclosure Sale Program may have cost the Department of Housing and Urban Development (HUD) over a billion dollars for claims that did not meet program according to an audit released this week by the HUD's Region 7 Office of Inspector General (OIG). OIG initiated the audit after noticing significant deficiencies in borrower qualifications during an audit of program claims at one large lender. The Preforeclosure Sale Program allows borrowers in default due to an adverse an unavoidable financial situation to sell their home at fair market value and use the proceeds to pay off an FHA-guaranteed...

WASHINGTON (MarketWatch) — To hear the National Association of Realtors tell it, if only banks had looser mortgage standards, another 700,000 homes would be sold and 350,000 jobs would be created. That’s according to a release Monday from the trade association. NAR says between 500,000 to 700,000 more homes and between 250,000 to 350,000 new jobs would be created if standards weren’t too tight. There probably will be about 4.6 million homes sold this year, whereas the NAR says in “normal” circumstances some 5 million to 5.5 million would be sold. The NAR points out that in the good ole...

Strategic defaulters, beware. The feds are coming for you. And they are not happy. Not the FBI. The Office of the Inspector General at the Federal Housing Finance Agency. The OIG may not have the same fearsome "G-man" reputation as its better-known counterparts at the Federal Bureau of Investigation, but it is every bit as much a law enforcement agency, with the same powers to search, seize and arrest. Special OIG agents are even authorized to carry firearms. The OIG's mission is to seek administrative sanctions, civil recoveries and criminal prosecutions against anyone who abuses the FHFA's programs. And it...

The Federal Reserve fulfilled expectations of more stimulus for the faltering economy, taking aim now at driving down mortgage rates. The Fed said it will buy $40 billion of mortgages per month in an attempt to foster a nascent recovery in the real estate market. The purchases will be open-ended, meaning that they will continue until the Fed is satisfied that economic conditions, primarily in unemployment, improve. There's strong hints that they'll do Treasurys next," Joe LaVorgna, chief economist at Deutsche Bank Advisors, said in a phone interview from London."They're pulling out all the stops to try to get this...

Wall Street warns against using eminent domain to seize underwater mortgagesBy Peter Schroeder - 08/19/12 05:00 PM ET Heavy hitters in the financial industry are lining up against a new idea brewing among local government officials to help struggling homeowners by seizing control of their mortgages through eminent domain. With many areas of the country still digging out from the housing crisis, some local governments are considering taking on the underwater mortgages at a substantially lower price, thus making them more affordable for the borrower. With policymakers at the federal, state and local level struggling to find a way to...

A Democratic committee chairman overrode his own subpoena three years ago in an investigation of former subprime mortgage lender Countrywide Financial Corp. to exclude records showing that he, other House members and congressional aides got VIP discounted loans from the company, documents show. The procedure to keep the names secret was devised by Rep. Edolphus Towns, D-N.Y. In 2003, the 15-term congressman had two loans processed by Countrywide’s VIP section, which was established to give discounts to favored borrowers. Issa exposed Towns’ coverup by issuing a second subpoena, which disgorged all of the records: The effort at secrecy was reversed...

A top housing regulator on Tuesday spurned a proposal from President Obama and Democrats to let homeowners write down the principal on their mortgages. Edward DeMarco, the acting director of the federal agency that oversees Fannie Mae and Freddie Mac, said the risk to taxpayers from the mortgage aid would far outweigh the benefits. “We concluded the potential benefit was too small and uncertain relative to unknown costs and risks,” DeMarco, the head of the Federal Housing Finance Agency (FHFA), said in a letter to Congress. DeMarco's move drew a swift rebuke from the Treasury Department, which had pushed FHFA...

Do you remember that thing about how the banks wouldn't lend to blacks and Hispanics because they were racists? And do you remember how they passed the Community Reinvestment Act so that banks were forced to reduce down payments practically to zero and lend to a lot of people they knew were bad credit risks? And do you remember how Wall Street bundled all these risky subprime mortgage and sold them to investors around the world so that when it became clear that those people weren't going to be able to pay their mortgages banks everywhere were left holding the...

No 1. home lender Wells Fargo & Co. has agreed to pay at least $175 million to settle federal allegations that it systematically overcharged minorities during the frenzied housing boom, including steering African Americans and Latinos into more expensive subprime mortgages. The agreement was announced Thursday by the Justice Department, which described it as the second-largest fair-lending settlement in the department’s history. (In the largest, reached last December, Bank of America Corp. agreed to pay $335 million to settle claims against Countrywide Financial Corp., the aggressive Calabasas lender it acquired in 2008.) Asst. Atty. Gen. Thomas E. Perez said “a...

A handful of local officials in California who say the housing bust is a public blight on their cities may invoke their eminent-domain powers to restructure mortgages as a way to help some borrowers who owe more than their homes are worth. Investors holding the current mortgages predict the move will backfire by driving up borrowing costs and further depress property values. "I don't see how you could find it anything other than appalling," said Scott Simon, a managing director at Pacific Investment Management Co., or Pimco, a unit of Allianz SE. Eminent domain allows a government to forcibly acquire...

Politicians seem to have a special fondness for words that have two very different meanings, so we are likely to hear a lot of these kinds of words this election year. "Access" is one of those words. Politicians seem to be forever coming to the rescue of people who have been denied "access" to credit, college or whatever. But what does that mean, concretely? It could mean that some external force is blocking you from whatever your goal might be. Or it could mean that you just don't have whatever it takes to reach that goal. To take a...

Amid all the rhetoric and posturing that have accompanied every twist and turn of the great housing bust and the ensuing slow, stuttering recovery of the United States economy, a comment made last week by new Fannie Mae CEO Tim Mayopoulos to the Wall Street Journal might have seemed consequential only to the most wired-in housing wonk. ”From my perspective, I don’t believe we need principal reduction to modify loans and make [modifications] work for homeowners,” Mr. Mayopoulos said.