Tuesday, July 27, 2004
Talbott argues "the entire housing market is corrupted. Buyers are indifferent about how high a price they pay as it is not their money. The banks are not price sensitive nor credit conscious because they sell most of the mortgage upstream to Fannie Mae and Freddie Mac."
He calls the current housing market a Ponzi scheme â€” "assets being passed faster and faster from person to person at ever increasing 'values' in a furious game in which the only person who loses is the last one out." Click the link above for the full article.
Monday, July 26, 2004
As part of an ongoing effort to curb predatory lending and increase accountability in its mortgage insurance programs, The Department of Housing and Urban Development today published a final rule that makes lenders accountable for appraisals on mortgages insured by the Federal Housing Administration (FHA). The rule will be published in today's Federal Register and becomes effective August 19, 2004."Holding lenders accountable when appraisers they select engage in fraudulent activities is another step this Administration is taking to protect homebuyers, particularly minorities, from unscrupulous predatory lending practices," said Assistant Secretary for Housing-Federal Housing Commissioner John C. Weicher. "Predatory lending has no place in the FHA market or any other part of the real estate market." Predatory lending results when home purchasers become unwitting victims of lenders, sellers and appraisers, often working together. The unsuspecting homebuyers either purchase homes with sales prices far in excess of the fair market value, or are substantially overcharged with costs associated with obtaining a mortgage.The final rule, "Lender Accountability for Appraisals," makes lenders accountable for the quality of appraisals performed by the appraisers the lender hires. It strengthens HUD's regulations concerning the lenders' responsibilities when they select appraisers to determine the market value of properties that will be security for FHA-insured mortgages. The rule will help assure that homebuyers will receive accurate statements of appraised values on homes they purchase using FHA mortgage insurance. The rule specifies that lenders that submit appraisals to HUD that do not meet FHA requirements can be subject to the imposition of sanctions by HUD's Mortgagee Review Board. This new rule applies to both sponsor lenders who underwrite loans and loan correspondents who originate loans on behalf of their sponsors. HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.