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Posts Tagged ‘mortgage defaults’
Housing Speculators Will Now Be Eligible for Federal Bailout Money… Huh?
Just when you thought real estate markets couldn’t get any stranger, the federal government is about to do something that is downright crazy. And if you are one of the millions of homeowners currently under water on your mortgage and have been unable to get your lender to agree to a loan modification, what the feds are doing isn’t likely to make you too happy.
Several years ago, one of the things that led to the real estate boom was all of the speculation that went on in the market. In short, a lot of people made a lot of money by purchasing houses that they couldn’t really afford, with no money down, and then either renting them or flipping out of them at wildly inflated prices. Then came 2007.
When the market finally crashed, there were a lot of these speculators that were left holding the bag. A lot of them simply walked away from their investments. And many of those who were renting their properties out managed to stretch out the foreclosure or short sale process for a year or more, without paying their mortgage, but still collecting the rent on the properties. Just ask anyone who has been involved in selling real estate for a while and they have seen this type of behavior.
Well, now the feds have decided that any speculators who have managed to hold onto their investments should also qualify for up to four federally subsidized loan modifications per speculator. So even if you have been the good little do-be who has been paying their mortgage payment on time, and swimming like mad to keep your head above water, you may have to get in line behind those who played a large role in the run-up in housing values and ultimately, their collapse.
But that’s not the best part. The best part is that taxpayers… all taxpayers… will be footing the bill for this newly created mess. So, whether you are a conservative pundit, or you hang with the Occupy Wall Street croud, there is something in this announcement for everyone to hate. That is, of course, unless you are a speculator yourself.
These loan modifications will be handled under the HAMP program.
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FHFA Wants You To Become a Distressed Property Slumlord
Got a few hundred thousand dollars burning a hole in your pocket but don’t have any idea what to do with it? Well the Federal Housing Finance Administration has a deal for you. Just buy a few homes in a blight stricken area and rent them out! Even better, when you purchase the homes, the government will get to decide when you can actually convert them back into… well… non-rental property. Seriously! And there are homes available in what the FHFA is calling “Los Angeles/Riverside”.
Not really sure what to make of this program. It definitely has both up and downsides.
The FHFA is going to make about 2,500 properties available nationwide for the program. Most of the homes Read the rest of this entry »
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Foreclosures Likely to Rise as Direct Result of State Settlement with Banks
It is no small irony that this past week’s announcement of a settlement between the nation’s five largest lenders and 49 states is actually expected to cause a spike in foreclosure activity. The settlement negotiations directly involved the procedures that banks use when foreclosing. But now that those talks are done, and an agreement has been reached, these same banks now feel that they are on firm legal footing to proceed with many foreclosures that they had held off on. The end result is likely to be a big increase in the number of foreclosures in California in the coming few months.
The banks involved in the negotiations had been reluctant to foreclose on properties because any increase in foreclosure activity was likely to bring added Read the rest of this entry »
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Justice Department Going After Firms that Issued Mortgage Backed Securities
Attorney General Eric Holder announced today that the DOJ has formed a team to go after firms involved in the sale of mortgage backed securities. The new team will start out with 55 DOJ attorneys. But the stated goals of the group and the political realities that it will encounter are likely to be at odds with each other.
As stated by the Legal Times,
The group, Holder said, will identify, investigate and prosecute Read the rest of this entry »
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Will Settlement Between States and Nations Five Largest Banks over Bad Mortgages Amount to Another Bank Bailout?
For some time now, there have been talks going on between the 50 state Attorneys General and the nation’s five largest banks. Those discussions have involved the issue of robosigning, violation of state real estate laws in foreclosures and costs to the states and to individual borrowers. Last year, both Nevada and California walked away from the talks to pursue their own legal remedies. The feeling was that group settlement that the talks would produce would not be in their best interest.
For some time now, the states that have continued in the talks and the federal government have been saying that a deal is close. Now there is a rumor Read the rest of this entry »
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