Are Fannie Mae & Freddie Mac (Government Controlled Lenders) At the “Heart” of the Mortgage Mess?
Posted by BEREL News Team on Thursday, December 23rd 2010
Objective real estate investors have been saying it for years: government-controlled Fannie Mae and Freddie Mac have been involved in questionable practices when it comes to mortgage regulation. And now, there’s significant support for this position in the major press. According to a Washington Post article published this morning, the two GSEs set the precedent for fast, perhaps overly-effective and aggressive foreclosure methods that ultimately led to Foreclosure-Gate and the robo-signing fiascos currently being endured and investigated on multiple fronts throughout the country.
In 2008, Fannie Mae and Freddie Mac “named an exclusive group of law firms that would rapidly carry out…filing legal paperwork to remove homeowners from their homes.” Prior to this time, this type of step was “unprecedented,” the reporting team says. Now, while many lenders followed suit and created their own foreclosure issues, the “heart of federal and state probes over faulty foreclosure practices that now threaten to further undermine the housing market” is squarely located with Fannie and Freddie. According to an anonymous source, the GSEs not only “urged swift foreclosures,” but also green-lighted a firm that had engaged in documented, “legally questionable practices.”
In further efforts to speed the foreclosure process, the GSEs offered incentives and threatened fines on law firms and servicers that took too long to foreclose, while neglecting to implement safeguards for the homeowners themselves. When asked about the existence of these safeguards, Fannie Mae associate general counsel Susan Reid simply stated, “I don’t know of any policies and procedures.”
It seems clear that other lenders and lawyers took their cues from Fannie and Freddie when it came to their foreclosure processes, but that does not change the fact that each individual corporation should have installed some type of protections to insure that foreclosures were valid. Do you think Fannie Mae and Freddie Mac should bear a greater burden of blame than other lenders involved in the robo-signing scandals?
Thursday, December 23, 2010
Wednesday, December 22, 2010
New York Foreclosures Likely to “Choke” in the New Year
New York Foreclosures Likely to “Choke” in the New Year
Posted by BEREL News Team on Tuesday, December 21st 2010
Thanks to requisite “special affirmations” from New York bank attorneys indicating that they know that all bank documents are valid because they have personally checked the paperwork, New York state’s foreclosure process will likely grind to a halt in the New Year as lenders and their lawyers work to develop a process that will allow attorneys to make this type of affirmation[1]. During the development process, foreclosure filings will likely drop to nearly zero since under current standards, there is no time or place in the present foreclosure process for the attorneys to check every document coming out of the lender. In fact, just since October 20, 2010, the date that the order was signed, foreclosures have dropped from 800 to 100 per week.
“Hundreds of foreclosure filings have been withdrawn,” confirmed secretary to Suffolk County Supreme Court Judge Erin Michael Kay, who mentioned that the judge’s caseload was actually down to 250 from a “much higher” load just a week earlier. Other judges opted to dismiss all pending foreclosures coming before them because banks and lenders did not have the newly-required affirmations in order, and some judges have gone so far as to require far more detailed affirmations than those specified by the new law. All of this “custom work” will further slow the foreclosure process and make implementing the changes more complicated for lenders and their attorneys.
The judges agree, however, that they are not trying to stop banks from foreclosing – just that they want to make sure that things are done right in light of the robo-signer fiasco. Wrote one judge’s chief law assistant: “If people can’t afford their home, if they can’t pay their bills, the foreclosure will happen. Homeowners have to have a plan and the ability to pay. The banks are entitled to be paid.”
Do you believe that these delays are simply procedural, and not a delaying tactic to keep homeowners in their delinquent homes?
Posted by BEREL News Team on Tuesday, December 21st 2010
Thanks to requisite “special affirmations” from New York bank attorneys indicating that they know that all bank documents are valid because they have personally checked the paperwork, New York state’s foreclosure process will likely grind to a halt in the New Year as lenders and their lawyers work to develop a process that will allow attorneys to make this type of affirmation[1]. During the development process, foreclosure filings will likely drop to nearly zero since under current standards, there is no time or place in the present foreclosure process for the attorneys to check every document coming out of the lender. In fact, just since October 20, 2010, the date that the order was signed, foreclosures have dropped from 800 to 100 per week.
“Hundreds of foreclosure filings have been withdrawn,” confirmed secretary to Suffolk County Supreme Court Judge Erin Michael Kay, who mentioned that the judge’s caseload was actually down to 250 from a “much higher” load just a week earlier. Other judges opted to dismiss all pending foreclosures coming before them because banks and lenders did not have the newly-required affirmations in order, and some judges have gone so far as to require far more detailed affirmations than those specified by the new law. All of this “custom work” will further slow the foreclosure process and make implementing the changes more complicated for lenders and their attorneys.
The judges agree, however, that they are not trying to stop banks from foreclosing – just that they want to make sure that things are done right in light of the robo-signer fiasco. Wrote one judge’s chief law assistant: “If people can’t afford their home, if they can’t pay their bills, the foreclosure will happen. Homeowners have to have a plan and the ability to pay. The banks are entitled to be paid.”
Do you believe that these delays are simply procedural, and not a delaying tactic to keep homeowners in their delinquent homes?
Subscribe to:
Posts (Atom)