Archive for the ‘Mortgage Bloggers’ Category

Many people who bought their homes using FHA loans in the last few years in Arizona are now in a situation where they owe more on their mortgage than their home is currently worth.
And they are worried that they cannot refinance.
The good news is that if you currently have an FHA loan and owe more [...]

John Stewart Morrison IV, 55, Columbia, Maryland has been indicted on two counts of mail fraud as well as Clifford Michael Seibert, 57, Berlin, Maryland; and Seibert‘s company, Modular Homes Wholesaler, Inc. was indicted on two counts of wire fraud in connection with a mortgage fraud scheme. Each indictment also seeks the forfeiture of the proceeds of the scheme, alleged to be $431,317 for Morrison and $363,808 for Seibert. The indictments were returned on August 19, 2010 and recently unsealed.

According to their indictments, Morrison was a mortgage originator and Seibert owned and operated Modular Homes Wholesaler, Inc., Berlin, Maryland. Modular Homes arranged the construction and delivery of pre-fabricated modular homes.

According to Morrison‘s indictment, on November 17, 2005 Morrison contracted to buy Lot #1, Rexwood Dr., Glen Rock Borough, Pennsylvania from the original owner which disclosed to Morrison at least two documents detailing significant problems with the steeply graded parcel of land. In order for a home to be built on Lot #1, extensive soil and engineering work had to be done. The indictment alleges that Morrison failed to follow through on his purchase of Lot #1 and instead recruited P.H., who wanted to have a modular home installed on the site, to purchase the lot. Morrison allegedly failed to disclose the problems with the lot to P.H.

The indictment alleges that Morrison and another individual prepared a loan package in P.H.’s name to apply for a loan from a mortgage lender in the amount of $431,377, to finance the purchase of Lot #1 and construction of a home on the land. The package falsely represented P.H.’s monthly income. Morrison allegedly failed to disclose the problems with Lot #1 to the appraiser, thereby causing the lender to rely on a materially deficient appraisal. Still believing that the land could be built-upon without additional preparatory work, P.H. paid $115,500 for the purchase of the lot at the closing held on June 14, 2006. Morrison allegedly received $36,800 as a result of P.H.’s purchase, which amount was actually paid to the “Atlantic Group,” an entity that Morrison created and used to ensure that his name did not appear on the closing documents.

According to Seibert‘s indictment, he arranged for the construction and delivery of a modular home to Lot #1 on P.H.’s behalf. Seibert prepared a draw schedule in which the lender was to pay Modular Homes a percentage of the loan funds as various stages of completion were reached in the construction and delivery of P.H.’s home. Seibert listed the total price of all services related to the modular home as $363,808. After the closing, the title company mailed a check to Seibert for $35,380 payable to Modular Homes, in accordance with the draw schedule, to begin work on P.H.’s project, including preparing the lot for construction and delivery of the home. The indictment alleges that Seibert did little work, if any, on P.H.’s behalf during this time.

The indictment alleges that on or about August 7, 2006, Seibert requested that funds from the construction escrow account be wired directly to Modular Homes, rather than to P.H. Shortly thereafter, in order to persuade the lender to exempt him from the company’s general policy of paying for construction work only after receiving proof of an approved building permit, Seibert is alleged to have falsely advised the lender that Glen Rock Borough would not issue a building permit until after the foundation for the home was poured. Soon thereafter, in early August 2006, Seibert allegedly submitted his first draw request which falsely represented that the clearing and filling of the lot was complete, when in fact, no work had been done. Seibert then falsely advised the lender that the construction project had overrun in costs because the lot’s community development association was demanding that substantial engineering work be done. The indictment alleges that on August 30,2006, Seibert requested an advance payment of $18,575 for additional costs that would be incurred to meet the demands of the lot’s community development association, when in fact, the development association had made no such demands. Seibert‘s request resulted in the lender agreeing in late October 2006 to fund $16,675 of this request.

Morrison and Seibert each face a maximum sentence of 20 years in prison on each of two counts of mail fraud and wire fraud, respectively. Morrison was arrested today and had an initial appearance in U.S. District Court in Baltimore. Seibert is expected to have an initial appearance on Monday, August 23, 2010.

An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

The indictments were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; and Special Agent in Charge Ken Taylor of the Housing and Urban Development Office of Inspector General – Office of Investigations.

The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available http://www.justice.gov/usao/md/Mortgage-Fraud/index.html.

United States Attorney Rod J. Rosenstein thanked the Maryland Department of Labor, Licensing and Regulation’s Division of Financial Regulation for its assistance in the investigation and commended Assistant U.S. Attorney Sujit Raman, who is prosecuting the case.

Here are highlights from news reports on the Federal Reserve’s decision today to leave short-term interest rates unchanged:

Reuters:

“U.S. short-term interest rate futures rose on Wednesday after the Federal Reserve pledged, as expected, to keep interest rates near zero for an ‘extended’ period in a bid to support an economic recovery.

“The Federal Open Market Committee (FOMC), the central bank’s rate-setting panel, said in a statement that weaker financial conditions stemming from Europe’s public debt crisis and high domestic unemployment threaten the recovery.

“In December 2008, the FOMC adopted a zero to 0.25 percentage point target range for the federal funds rate, the overnight cost U.S. banks charge each other to borrow excess reserves from each other.

” ‘The fair inference is that there is no urgency (for the Fed) whatsoever to increase the fed funds rate or other tightening actions,’ said Richard DeKaser, president of Woodley Park Research in Washington.”

Associated Press:

“The Federal Reserve struck a more cautious tone about the strength of the U.S. economic recovery, indicating Europe’s debt crisis poses a risk to it.

“Wrapping up a two-day meeting Wednesday, the Fed in a 9-1 decision retained its pledge to hold rates at record-low levels for an ‘extended period.’ Doing so will energize the rebound.

“The Fed expressed confidence that the recovery will stay intact despite headwinds from abroad and at home. But Chairman Ben Bernanke and his colleagues offered a slightly more reserved outlook than the last time they convened.

“The Fed said the economic recovery is ‘proceeding.’ That was a bit less upbeat than the view at the April meeting when the Fed said economic activity continued to ’strengthen.’ The Fed also said the labor market is ‘improving gradually.’

“While not mentioning Europe by name, the Fed said ‘financial conditions have become less supportive of economic growth … largely reflecting developments abroad.’ “

The Globe and Mail:

“The U.S. Federal Reserve left its key interest rate unchanged, at about 0 per cent, as expected. It also left untouched the key phrase that low rates will be needed for “an extended period,” which was also expected.

“What investors were really looking for here was some indication of how the Fed is seeing the U.S. economy after a number of setbacks – particularly in the labour and housing markets. Here’s what the Fed said:

” ‘Information received since the Federal Open Market Committee met in April suggests that the economic recovery is proceeding and that the labour market is improving gradually. Household spending is increasing but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit.”

“On housing: ‘Housing starts remain at a depressed level.’

“A nod to Europe: ‘Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad. Bank lending has continued to contract in recent months.’

“The stock market liked what it saw. Within about five minutes of the release of the Fed’s statement, the Dow Jones industrial average switched from a small decline to a slight gain, up 2 points.”

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More on the Fed:

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Fed feels ‘no urgency’ to increase rates is a post from: Mortgage Insider

Interest rates on home loans fell to their lowest level on record, according to a survey by Freddie Mac. According to the mortgage giant’s press release:

• Interest for a 30-year, fixed-rate mortgage averaged 4.69% in the week ending today,  with a 0.7% of a point, Freddie Mac said. That’s the lowest rate in records dating back to 1971.
• Rates for the 15-year fixed mortgage averaged 4.13%,  with a 0.6% of a point, also a low. Freddie Mac’s records for the 15-year home loan date back to 1991.
• The 5-year adjustable-rate mortgage (ARM) also set a five-year record, averaging 3.84% this week, with an average 0.7 point.
• The 1-year Treasury-indexed ARM averaged 3.77 percent this week with an average 0.7 point. This is the lowest the 1-year ARM has been since the week ending May 6, 2004, when it averaged 3.76 percent.

Freddie Mac Chief Economist Frank Nothaft said:

“Mortgage rates for all but traditional 1-year ARMs hit all-time record lows this week in our survey while activity in the housing market slowed in May following the expiration of the homebuyer tax credit. … Both new and existing home sales showed unexpected declines in May.”

Read the full release HERE!

Latest from this blog:
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Mortgage rates fall to record lows is a post from: Mortgage Insider

First, in recent foreclosure news:
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•  Report: Minorities worst hit by foreclosures
• ‘New wave’ of foreclosures to come?

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Every week, homes throughout Orange County go to foreclosure auctions. The owners can be millions of dollars in debt, or owe just a few thousand.

Often these homes revert to the lenders, who eventually put them back on the market. Sometimes the homes are bought by investors and resold.

Foreclosures affect more than the homeowners involved. They can impact entire neighborhoods. At the very least, they can affect nearby home sales.

All of these homes and addresses have been listed in the public notices, as required by law.

Auction dates are frequently postponed and can be checked through trustee sale and phone numbers. Some auctions could be cancelled. Also, some homes may be on the market.

For homes, click on city:

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• Aliso Viejo
• Anaheim
• Coto de Caza
• Irvine
• Huntington Beach
• Ladera Ranch
• Laguna Beach
• Laguna Hills
• Laguna Woods
• Lake Forest
• Mission Viejo
• Orange
• Rancho Santa Margarita
• San Clemente
• Tustin
• Yorba Linda

Read more:

How foreclosure auctions work

Trustee, trustor … what’s the difference? Click here for foreclosure terms and definitions

Top tips for buying investment properties

Note: There are foreclosures in other Orange County cities but so far we haven’t had enough available writers to regularly compile foreclosure information from them. We hope to add more in the future.

For a map with a partial list of other real estate listings around Orange County, click here

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FORECLOSURE HEADLINES…

Homes facing foreclosure in 16 cities is a post from: Mortgage Insider

Noah Savings Mortgage and Liberty Law Firm have had settlement agreements drawn up that will provide refunds to Oregon homeowners and prohibit them from doing further loan modification work in Oregon.

The Oregon Department of Justice investigated allegations that Noah Savings Mortgage violated state law by collecting advance fees for loan modifications aimed at preventing foreclosure sales. The investigation also looked at allegations that Liberty Law Firm solicited to collect advance fees for loan modifications. Both companies cooperated with the investigation.

The settlement with Noah Savings Mortgage resulted in $6,500 in full refunds to two Oregon consumers. The company also must pay $5,000 to the Oregon Department of Justice and cease doing loan modification work in Oregon. The settlement, in which Noah Savings Mortgage admits no wrongdoing, was filed in Linn County, Oregon.

The settlement with Liberty Law Firm prohibits the company from doing modification work in Oregon. If any Oregon consumer complaints arise before August 20, 2010, Liberty Law Firm must pay restitution to those victims and $5,000 to the Department of Justice. Liberty Law Firm admits no wrongdoing; the settlement was filed in Marion County, Oregon.

Oregon Attorney General John Kroger made the announcement.

“This office is committed to stopping abuses in the mortgage industry that harm Oregon consumers,” said Deputy Attorney General Mary Williams.

Senior Assistant Attorney General Thomas K. Elden handled the case for the Oregon Department of Justice.

Oregonians should watch out for loan modifiers who ask for advance fees over $50 and check to see if a loan modifier is registered. Foreclosure consultants and loan modifiers cannot take advance fees in Oregon. Loan modifiers must register with the Oregon Department of Consumer and Business Services through the Division of Finance and Corporate Securities.

The Oregon Department of Justice and the Department of Consumer and Business Services work together to uproot abuses in loan modification.

Since February, the 12-month LIBOR is up 68 percent. That’s bad news for homeowners with pending ARM adjustments. It’s now cheaper to refi into a new loan than to let your mortgage rate adjust.

Our periodic recap of who got nabbed breaking mortgages laws!

• California developer to plead guilty; 7 indicted In mortgage fraud schemes‎ – Wall Street Journal
• Six indicted in Oregon-Washington mortgage fraud scheme‎ – Statesman Journal
• Kansas City woman pleads guilty in $12.6M mortgage fraud scheme‎ – Kansas City Business Journal
• California woman to serve 15 years for $9 million mortgage investment scheme‎ – San Jose Mercury News
• 3 Texans charged in alleged mortgage fraud – Houston Chronicle
• Wisconsin loan broker faces federal loan fraud charge‎ – Oshkosh Northwestern

Calif. developer nabbed in mortgage scam is a post from: Mortgage Insider

Randy Johnson, president of Independence Mortgage Co. in Newport Beach, author of “How to Save Thousands of Dollars on Your Home Mortgage” and a mortgage broker since 1983, answers questions…
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Q. I always look for your column. I think your advice is sound. I have a question of my own. I am 57 and in this economy plan to continue to work until my Social Security retirement of 67. I have been blessed with excellent health and a great job.

What do you think? The idea of having my rental income to add to my retirement income is appealing to me. On the other hand I want to be wise with my money as it has to last my lifetime.
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A. First of all, congratulations on being 57 and financially secure.
While you are still working, it normally makes sense to contribute to your IRA to the maximum amount allowable. That said, unless your employer matches your contribution, you also have the alternative of diverting some of the cash flow to pay down the mortgage on your home. You can increase the payment to where it is paid off in ten years, about $1,300 per month in your case. When you do that, you have guaranteed “earnings” of whatever your note rate is, say 5 percent or 6 percent. That is better than putting funds in an investment that, if safe, currently has a very low rate of return.

As to another property, you are obviously comfortable about being a landlord, a more difficult task than some people realize. Buying another property is, therefore, a viable option and given that you can buy a property today cheaper than it has been possible in years, your timing is good.

I’m guessing here that you can probably take just enough cash out to make a down payment that is such that you can still have a positive cash flow on the current property. With that down payment you can probably start out with a positive cash flow on the new property, too. That will only get better and 10 years from now, you will be in great shape.

When our clients have questions like that, we get together and put all the numbers on a spreadsheet to show them the current situation and then project out what it will be like in 10 years when they retire. We also include tax advisers so that everyone agrees on the plan.
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That’s it. If you want Johnson to answer a question, email it to Maurine Pool at mpoo(at)ocregister.com. Include your name or nickname and the city you live in.

Is it wise to keep mortgage-free rental? is a post from: Mortgage Insider

The public has less interest now in buying foreclosed homes than it did a year ago, a new survey shows, prompting concern about who will buy all the respossed homes coming on the market and the effect on a housing recovery.

Consumers who would consider purchasing a foreclosure dropped to 45% this month from 55% last May, according to an online Harris Interactive survey conducted for Trulia.com and RealtyTrac.com

The survey showed that among those who cite a downside to buying a foreclosure — and there are actually somewhat fewer than last year: 78% vs 85% –  more are worried about the risk and possible loss of value than a year ago:

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Rick Sharga, senior vice president of Irvine-based RealtyTrac, a foreclosure website, suggested that potential homebuyers are becoming more realistic about the time and effort it can take to buy a foreclosure at an auction, renovate a foreclosed property or even pull off a short sale.

But he said:

“Although fewer consumers expressed interest in buying a foreclosed home than a year ago, the actual sales of bank-owned properties (REOs), along with sales of properties in the foreclosure process, continue to increase — accounting for more than 30 percent of total sales in the first quarter of 2010 according to our data. We anticipate that there will be an increased number of both REO purchases and short sales throughout the rest of the year.”

Pete Flint, Trulia’s co-founder and CEO, said:

“For every borrower who avoided foreclosure through HAMP [Home Affordable Modification Program] last year, another 10 families lost their homes. It now seems clear that government programs will not reach the overwhelming majority of homeowners in trouble. Combined with decreased consumer interest around purchasing a foreclosure it may take even longer than anticipated to see true health return to the real estate market.”

Other survey highlights:

• Just 1% of homeowners with a mortgage say walking away from their home would be their first choice if they were unable to make payments. If their mortgage were to go underwater, 41% say they would at least consider walking away, while 59% say they would not consider walking away no matter how underwater they got.
• 18% expect discounts of less than 25% off the value of a bank-owned home compared to one not in foreclosure. But 36% expect a discount of 50% or more when buying a foreclosed property, a reduction that Flint and Sharga say is ”unrealistic”. 
• How would consumers use a foreclosed property?  62% said they would use it as their primary residence, 19% as a rental investment, 8% said they would use it as a second home or vacation home, and 6% said they would flip it.

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Fewer would buy repo’d home vs. a year ago is a post from: Mortgage Insider