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subprime lending: When Deals Go Bad: Baltimore's Foreclosure Debacle - 01/13/08 04:07 PM
Baltimore, sometimes called "Charm City," isn't all that charming beyond the inner harbor complex that's featured by media when the Ravens or Orioles are playing at home.  Sheila Dixon, Baltimore's newly elected mayor, along with the city's council have filed suit against Wells Fargo Bank to recover alleged losses caused by a wave a foreclosures ravaging the city's neighborhoods.  The complaint, filed in federal court, seeks damages for municipal expenditures, including fire and police protection and the loss of tax revenue, correlated to a stark escalation in the number of vacant homes.  The New York Times, in a related article written … (13 comments)

subprime lending: Five Years : A Desparately Long Time Indeed! - 12/07/07 02:18 PM
You've heard the news by now, the Bush Administration has revealed its plan to rescue housing markets.  The idea is to save certain consumers from themselves and to save the economy at large from the grips of ruination.  While I dislike everything about the proposal, it's the length of time that introductory rates would be frozen that disturbs me the most.  Five years is a very long time! The American Civil War lasted only four years, yet the epic struggle redefined the fabric of our society.  John F. Kennedy was in office less than three years before being assassinated, still his … (33 comments)

subprime lending: A Recipe for Unmitigated Disaster - 11/23/07 06:13 PM
Earlier today, Lenn Harley posted California Subprime Borrowers May Get Relief? - More Questions Than Answers.   It's Lenn's insightful commentary to posts written by Bryant Tutas and Gena Riede concerning the frightful number of looming foreclosures in certain markets.  Specifically, Gena emphasized the concerned efforts of California's governor to offer some relief to borrowers in serious financial distress.  The governor of Massachusetts was the first to offer a plan of sorts earlier this year.  While the initiative shown by state governments to confront the foreclosure epidemic is laudable, I doubt that localized efforts can pack the punch needed to make an … (35 comments)

subprime lending: My Thoughts on Mortgage Fraud and Foreclosure - 07/07/07 04:25 PM
The historical correlation between the economy and foreclosure rates is amazingly weak. I've spent several days compiling and studying foreclosure statistics from the 1950's through the present. You would think unemployment numbers would have a direct effect on foreclosure trends nationally. They don't.
Interest rates undeniably trigger defaults among contemporary products like adjustable rate and subprime mortgages.
But, researchers struggled unsuccessfully to link an external causation factor, prior to 1990, to the non-payment of conforming loan products.
Subprime, or risk based, mortgages have been widely available to consumers for only 15 years or so. Since the mid 1990's, a … (18 comments)

subprime lending: Mortgage Fraud: Fact versus Fiction - 06/25/07 11:43 AM
A research phase would be the best way to describe the state of affairs in my office these days.  Mortgage fraud statistics are dynamic, moving targets.  Many of you want to know the truth about mortgage fraud, but find it difficult to stay informed. The data is available, but is distributed in fragments, in numerous reports, studies, publications, and news articles.  I'd like to share some of the core definitions and facts with you.DefinitionsMortgage Fraud:   Any material misrepresentation in a loan application that influences a mortgage lender to approve an application ... that would have otherwise been declined.  The term material … (25 comments)

subprime lending: 2007 from my perspective - 01/07/07 08:10 AM
I'm admittedly concerned about the real estate and mortgage fraud outlook for 2007 after considering the developments of the past year.  Real estate and mortgage fraud is a complicated issue presenting a spectrum of societal challenges in the form of costs and consequences.  Industry leaders express grave concern without revealing a concise and cohesive strategy to combat the epidemic.  The U.S. Justice Department continues a misguided agenda of prosecuting mostly "notorious" fraudsters in metropolitan areas.  State and local authorities often recognize the existence of a problem, but lack the resources to confront this sophisticated form of theft.  As a matter of … (2 comments)

 



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