Fannie Mae, the largest buyer and backer of U.S. home loans, lost nearly $3.6 billion in the fourth quarter of 2007, as a result of home-loan delinquencies and poor bets on interest rates, The Boston Globe reported February 28, 2008.
Freddie Mac was expected to report about a $1.5 billion fourth-quarter loss.
Read The Boston Globe Article
More than 10 percent of American homeowners owe more on their mortgage than the value of their home, according to a new study by Moody’s Economy.com and reported on in a blog post by Boston Globe reporter Binyamin Appelbaum on February 22, 2008.
Binyamin refers to this as borrowers being "underwater." I also have heard the phrase "upside down on your mortgage."
"The borrowers can’t refinance because no new lender will write a loan for more than the home is worth. The industry has charged that some are simply refusing to make payments, and either abandoning their homes or waiting for lenders to kick them out. So far, the evidence is anecdotal, but the very idea terrifies the industry."
Ever wonder how people who could barely pay their rent suddenly had a home loan?
The Boston Globe reported January 20, 2008 about an investigation by the Massachusetts Attorney General's office into a mortgage broker's alleged fraudulent actions on behalf of borrowers.
"Fake documents, a phantom borrower, and other irregularities were common features of five subprime mortgages brokered by Lyder between November 2005 and June 2006 that were examined by the Boston Globe. Lyder's clients ranged from the barely employed to struggling working-class couples; one had just left a homeless shelter and two others gave up government-subsidized housing to buy homes. They said Lyder arranged loans that they later realized had monthly payments that far exceeded their means. All five loans are now in foreclosure."
With foreclosures going through the roof, industry regulators are focusing more on the role mortgage brokers played in the events that have led to the subprime mess.
Of course, one has to believe that the lenders themselves weren't asking a lot of questions.
"Lyder's clients, naive about the math and mechanics of mortgages, said they trusted her assurances the loans would be affordable and were thrilled she could help them buy a house."
Apparently the borrowers weren't asking many questions either.
Read The Boston Globe Article
Massachusetts joined six other states launching a standardized and mandatory system to more thoroughly license and track the state's tens of thousands of mortgage brokers, the Boston Herald reported January 2, 2008.
Mortgage brokers have come under scrutiny over the past year or two as foreclosure filings grew and housing market troubles worsened. Experts say loose licensing standards made it easy for shady operators (even those with criminal records, according to the Herald) to work in the mortgage business.
"While mortgage regulations vary dramatically from one state to another, the new system creates a uniform application for mortgage brokers and a database that banking regulators, and eventually consumers, can use to track down brokers who try to work in one state after being banned from another. Consumers should have access by next year."
Besides Massachusetts, Idaho, Iowa, Kentucky, Nebraska, New York and Rhode Island have joined the new program. In total, 42 state agencies, including those in Washington, D.C., and Puerto Rico, have committed to implementing the tracking system by the end of 2009.
Read The Boston Herald Article
Read A Blog Post At Boston.com
In a 5-0 vote, the Federal Reserve moved to propose new mortgage loan rules in an effort to protect home buyers from ethically challenged mortgage brokers and others in the lending industry, the Boston Herald reported December 18, 2007.
The proposed rules would restrict lenders from penalizing risky borrowers who pay loans off early, require lenders to make sure these borrowers set aside money to pay for taxes and insurance and bar lenders from making loans without proof of a borrower’s income.
The new rules also would prohibit lenders from lending without considering a borrower’s ability to repay a home loan from sources other than the home’s value.
Makes you wonder what took so long.
Undersecretary of the United States Treasury for Domestic Finance, Robert Steel, spoke with National Public Radio on December 14, 2007 and defended the Bush Administration's decision to make it's subprime mortgage plan voluntary.
Listen to the NPR Interview of Robert Steel, Undersecretary of the Treasury for Domestic Finance
One of the largest investors in mortgages in the U.S., Freddie Mac, has produced a video about how to spot foreclosure scams and avoid becoming a victim of a fraud artist.
Freddie Mac decided to produce the anti-fraud video for YouTube after a 2007 company-sponsored study discovered that 25 percent of delinquent borrowers go to the Internet first for mortgage information, only slightly less than the number who called their mortgage lender (28 percent) or bank (32 percent).
According to a press release, Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to support homeownership and rental housing. Freddie Mac purchases single-family and multi-family residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage-related securities and debt instruments in the capital markets. Over the years, Freddie Mac has made home ownership possible more than 50 million times, ensuring financing for one in six home buyers and more than four million renters.
This Reuters video from August 2007 discusses foreclosure scams, and how the ethically challenged (aka, scum bags) prey on those facing foreclosure.
With foreclosures piling up, subprime lenders have fled Massachusetts.
Eight of the ten largest subprime mortgage specialists in Massachusetts are no longer lending in the state, the Boston Herald reported December 3, 2007.
"Eric Rosengren, head of the Federal Reserve Bank of Boston, says that the only two such lenders still operating in Massachusetts are Option One Mortgage and First Franklin Financial."
USA Today compiled a state-by-state mortgage delinquency and foreclosure chart. The chart's figures are valid through the third quarter of 2007.
The date comes from the Mortgage Bankers Association.
View the mortgage delinquency and foreclosure chart
RealtyTrac also released state-by-state foreclosure statistics.
| Sun | Mon | Tue | Wed | Thu | Fri | Sat |
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| 1 | 2 | 3 | 4 | 5 | ||
| 6 | 7 | 8 | 9 | 10 | 11 | 12 |
| 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| 20 | 21 | 22 | 23 | 24 | 25 | 26 |
| 27 | 28 | 29 | 30 | 31 |
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