Soapbox ❐ All That Bailout Money

By
Real Estate Broker/Owner with Novak Advantage Real Estate UT DRE# 5459481-PB00
Soapbox: "A thing that provides an opportunity for someone to air their views publicly."

I read an article earlier today that made me gasp (which in the new vernacular means that it was compelling enough for me to hit the "share" button and comment). The US Government has filed a lawsuit against Deutsche Bank. That's the good news. The bad news is that it involves $1.274 BILLION that HUD - that's us - has paid, or in the process of paying, this ONE bank, for bad loan insurance claims.

The heartbreaker is that this is really about bailing out a bank, not for mortgages that it originated (which would legitimize the HUD compensation), but for a bad investment decision Deutsche Bank made in 2007 when it bought a subprime/Alt-A lender, MortgageIT.

How did a lender who "specializes" in subprime/Alt-A mortgages EVER get approved to originate HUD insured loans? From my brief internet foray into researching MortgageIT, it doesn't look like they did. They simply bought HUD backed loans from "small to mid-sized banks, credit unions and mortgage bankers" to enhance the marketability of their own portfolio. The one that Deutsche Bank bought off on.

That being said, I know that Deutsche Bank is not stupid. I know that Deutsche Bank did their due diligence. I know that Deutsche Bank got burned. Wait, did they?

Deutsche Bank Posts Best 1st Quarter Since 2007

Executive Summary? Deutsche Bank Net Profits Up 17%

Shame on us ...

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Posted by

Kim Novak is the Broker/Owner of Novak Advantage Real Estate. She can be reached by call/text/FaceTime at (801) 726-1443 and by email to kim@novakadvantage.com.

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Comments (3)

Kathy Denworth
Century 21 Schwartz Realty - Islamorada, FL
Realtor in the Florida Keys, Islamorada, Key Largo

Kim, I had a REO from them and when I called them, they said they did not have any loans, they only serviced them. I could not get ANY information from them other that to call yet another number.

May 04, 2011 02:42 PM
Kim Novak
Novak Advantage Real Estate - Layton, UT
Broker/Owner

Thanks for the post, Kathy. I think that one of the most valuable things we can do for each other, as real estate professionals, is to share our experiences! Then we, in turn, can provide better guidance for our own clients.

May 04, 2011 03:27 PM
Kim Novak
Novak Advantage Real Estate - Layton, UT
Broker/Owner

Deutsche Bank Sued by City of Los Angeles for Evicting Low-Income Tenants

http://www.bloomberg.com/news/2011-05-04/deutsche-bank-sued-by-los-angeles-over-foreclosed-properties-evictions.html

Well, at least we know what they’re doing with all of our HUD checks.

May 07, 2011 06:06 AM