Proposal to permanently end the current mortgage crisis by using the free market system aka “The RC Stabilization Act"
All Freddie Mac and Fanny Mae Mortgages originated between Jan 1, 2002 thru Dec. of 2007 that are interest only or arm loans will be placed into a separate category bundle.
1) Their original teaser rate will not change. It will last for the life of the note.
2) All these loans will be converted to 40 yr loans
3) All these loans will have a call feature at 30yrs by the US Government at current market value at the time of exercise of the call feature, but no greater than 100% of the balance of the loan on the note that is left.
4) At the end of 20 years the note may increase 1% point above the original teaser rate.
5)All of these loans will be fully assumable by any buyer based on the original loan requirements.
6) All the interest paid on these notes will be federal tax free to the note holder be it a private individual or any entity or any US Corp.
7) States that agree to making these notes state tax free by a simple majority of their legislator may participate in this program.
8) The interest on these note will also be state tax free to the holder of these notes.
9) All these notes can be bought and sold at any time by any Private individual or entity.
10) All these notes must be serviced by a note service co. on an approved list by the federal gov’t. no exception.
11) All participating states must approve their participation no longer than 45 days after this program is enacted by the federal gov’t.
12) All these Loans may be paid off at any time without any prepayment penalty.
13) The original sale of these notes must be done on an auction basis thru the top 40 stock and bond dealers on the US stock markets and by the top 40 US banks and The US Treasury in the US. Consequent trading may only be done thru all the same licensed and noted companies on the NYSE, NASD and US Chartered Banks . All Trades must be fully disclosed and reported to the NYSE, NASD within 20 minutes of a transaction.
14) The US gov’t must sell thru all the above entities at a minimum, increments of $25,000. Pieces of these bundles to private US Citizens, or individuals just like treasuries. No fee in excess of typical US Treasury fees may be charged to buyers at the initial auction of every bundle.
15) The US federal gov’t must guarantee the right by private individual public participation in the auction by individual US Citizens’ up to a 25 % priority on every bundle sold.
16)Existing note holders may hold on to their notes under all the above terms and must notify the payees of the change in the note rate back to its original rate within 30 days of the passing of the stabilization Act.
17) Existing note holders may transfer the ownership only under a sale thru the existing trading scenario as described above.
18) Mtortgage Service companies will manage, service and foreclose on properties that are in default should the mortgage payee still not be able to perform on the original teaser rate of each note. Starting 90 days after the Stabilization Act is implemented. The Mtge. Service Co.’s may appoint, and hire the necessary individuals to sell the properties as they always do. All mortgages on every property even in foreclosure can be assumed by any buyer under the original rates and terms and fees. A maximum transfer fee of 1% of the balance of mortgage will be allowed.
19) This proposal was originated in order to Stabilize the mortgage loan market. It is designed to encourage foreign and domestic investors to invest in mortgage backed securities by stopping all foreclosures in one move. All foreclosures will be halted for a 60 day time period to implement the above plan and notify all mortgage payees and all mortgage holders.
Proposal to permanently end the current mortgage crisis by using the free market system aka “The RC Stabilization Act"
All Freddie Mac and Fanny Mae Mortgages originated between Jan 1, 2002 thru Dec. of 2007 that are interest only or arm loans will be placed into a separate category bundle.
1) Their original teaser rate will not change. It will last for the life of the note.
2) All these loans will be converted to 40 yr loans
3) All these loans will have a call feature at 30yrs by the US Government at current market value at the time of exercise of the call feature, but no greater than 100% of the balance of the loan on the note that is left.
4) At the end of 20 years the note may increase 1% point above the original teaser rate.
5)All of these loans will be fully assumable by any buyer based on the original loan requirements.
6) All the interest paid on these notes will be federal tax free to the note holder be it a private individual or any entity or any US Corp.
7) States that agree to making these notes state tax free by a simple majority of their legislator may participate in this program.
8) The interest on these note will also be state tax free to the holder of these notes.
9) All these notes can be bought and sold at any time by any Private individual or entity.
10) All these notes must be serviced by a note service co. on an approved list by the federal gov’t. no exception.
11) All participating states must approve their participation no longer than 45 days after this program is enacted by the federal gov’t.
12) All these Loans may be paid off at any time without any prepayment penalty.
13) The original sale of these notes must be done on an auction basis thru the top 40 stock and bond dealers on the US stock markets and by the top 40 US banks and The US Treasury in the US. Consequent trading may only be done thru all the same licensed and noted companies on the NYSE, NASD and US Chartered Banks . All Trades must be fully disclosed and reported to the NYSE, NASD within 20 minutes of a transaction.
14) The US gov’t must sell thru all the above entities at a minimum, increments of $25,000. Pieces of these bundles to private US Citizens, or individuals just like treasuries. No fee in excess of typical US Treasury fees may be charged to buyers at the initial auction of every bundle.
15) The US federal gov’t must guarantee the right by private individual public participation in the auction by individual US Citizens’ up to a 25 % priority on every bundle sold.
16)Existing note holders may hold on to their notes under all the above terms and must notify the payees of the change in the note rate back to its original rate within 30 days of the passing of the stabilization Act.
17) Existing note holders may transfer the ownership only under a sale thru the existing trading scenario as described above.
18) Mtortgage Service companies will manage, service and foreclose on properties that are in default should the mortgage payee still not be able to perform on the original teaser rate of each note. Starting 90 days after the Stabilization Act is implemented. The Mtge. Service Co.’s may appoint, and hire the necessary individuals to sell the properties as they always do. All mortgages on every property even in foreclosure can be assumed by any buyer under the original rates and terms and fees. A maximum transfer fee of 1% of the balance of mortgage will be allowed.
19) This proposal was originated in order to Stabilize the mortgage loan market. It is designed to encourage foreign and domestic investors to invest in mortgage backed securities by stopping all foreclosures in one move. All foreclosures will be halted for a 60 day time period to implement the above plan and notify all mortgage payees and all mortgage holders.
STATEMENT about Fannie Mae and Freddie Mac
This weekend, the U.S. Dept. of the Treasury placed Fannie Mae and Freddie Mac, government sponsored enterprises (GSEs), into a conservatorship. The federal government is authorized to take up to an 80 percent stake in the companies, and, as part of its duties under the conservatorship, will review both Fannie’s and Freddie’s financial condition quarterly, as well as inject money into the operations as needed. Under the conservatorship, both GSEs will be allowed to increase their mortgage funding over the next year and a half, then, beginning in 2010, the plan calls for a reduction in their portfolios of 10 per cent a year until they have been reduced to $250 billion. As part of this weekend’s action, both CEOs were relieved of their duties and Herbert Allison, former Merrill Lynch vice chairman, and David Moffett, former U.S. Bancorp CFO, were selected to lead Fannie Mae and Freddie Mac, respectively.In light of the U.S. Dept. of the Treasury’s action, C.A.R. today reaffirmed its support for Fannie Mae and Freddie Mac and their countercyclical roles.While the short-term impact of the Treasury’s actions over the weekend served to calm the markets and restore confidence, in the longer term these entities need to be able to fulfill their historic mission. A privatized Fannie and Freddie will short-circuit the countercyclical role the GSEs have played during precarious times in real estate markets.Without an institutionalized mortgage-backed securities market, mortgage capital eventually will be less predictable and more expensive, and adjustable-rate mortgages could become the standard loan for home buyers, as could higher down payment requirements. The 30-year, fixed-rate mortgage as we know it will no longer be readily available for most home buyers and may effectively disappear. The result could be a dramatic decline in homeownership rates in California and across the nation.C.A.R. is concerned that the Treasury, and Fannie Mae’s and Freddie Mac’s new CEOs, will overreact and change the mission and role of the GSEs. Wall Street and investors are understandably reluctant to buy mortgage backed securities (MBS) that are not either originated from or guaranteed by Fannie or Freddie.The GSEs hold or have securitized nearly half — roughly $5 trillion — of all mortgages in the U.S., and in the current environment with private lender constraints, they account for the vast majority of all new mortgages in California.We have just recently begun to see an increase in home sales, currently at nearly 490,000 units on an annualized basis, up from 284,000 in the fourth quarter of last year. The most significant, reliable source of home loans in California today are financed by either Fannie Mae or Freddie Mac. California’s and the nation’s housing markets simply cannot withstand the financial rug being pulled out from beneath them. Additionally, the repercussions this could have on the already weak economy could be devastating. Full Article
THE MORTGAGE MARKET GUIDE
“VERY NICE. IT’S A LITTLE GREASY…BUT VERY NICE. CRUMBLE SOME CRACKERS INTO IT SHELL, THAT WILL HELP TO ABSORB THE GREASE…” Peter Falk’s line from the 1979 classic movie “The In-Laws” is good advice about soup…but doesn’t help us much when it comes to absorbing the high price of oil, a greasy topic that continues to permeate financial headlines.
And last week was no exception, with oil prices continuing to march ever higher, despite an announcement early last week by OPEC member Saudi Arabia that they will increase oil production in the near future. They are concerned that the high price of oil will lead to lower demand and a turn toward alternative energy sources. And Friday’s news didn’t help, with a strike at a Chevron plant in war-torn Nigeria, Africa’s largest oil producing nation. Additionally, Israel conducted a military operation for preparedness in case of a potential strike against Iran’s nuclear plants – which all served to push oil prices higher still. High oil prices are inflationary – so if the march higher in oil prices continues, both the Stock and Bond markets will suffer…and even crumbled crackers won’t help sop up the mess.
But Bonds did manage to find some improvement last week, helping home loan rates get better by about .125%. Negative economic news, including soft housing numbers, weakness from the manufacturing sector and more write-downs announced by financial giant Citigroup all played a hand – causing money to flow out of Stocks and over into Bonds, which helped prices improve.
WANT TO HELP YOUR CAR’S MAINTENANCE BUDGET IMPROVE? YOU MIGHT BE SURPRISED TO LEARN HOW MUCH YOU CAN SAVE…READ THIS WEEK’S MORTGAGE MARKET VIEW!
Forecast for the Week
The coming week is chock full of economic reports that will likely have a big influence on the financial markets. We start off on Tuesday with a report on Consumer Confidence, and also the beginning of Fed meetings which will culminate in a Rate Decision and Policy Statement on Wednesday afternoon at 2:15pm ET. It is widely believed that the Fed will keep the Fed Funds Rate at 2%…but what will be most interesting is the wording of their carefully crafted Policy Statement. If it gives hints of their intent to hike rates in the near future to help fight inflation, it could actually be good news for Bonds and home loan rates.
A look at sales numbers in the new and existing housing markets will come Wednesday and Thursday, and Friday will wrap up the week with a bang as the Fed’s favorite gauge of inflation, the Core PCE (Personal Consumption Expenditure) data will be released. Since this will be following the Fed’s announcement on Wednesday – will the Fed look smart if they’ve held rates steady, or perhaps come under criticism if the inflation numbers are super-heated? Could be a greasy few days for the Fed, so stay tuned.
Remember that when Bond pricing moves higher, home loan rates move lower – and then take a look at the chart below. You can see how in recent days, Bonds have moved higher, but are now battling an overhead “ceiling” of technical resistance. If Bonds and home loan rates are to improve in the near future, it will take some very Bond-friendly news to help crash through the ceiling that has stopped progress in its tracks for the time being.
The Mortgage Market View…
TIME FOR A CHANGE…OR NOT?
The rising cost of crude oil has everyone talking about gas prices at the pump… but what about the actual oil in your engine? Are you spending too much on oil by changing it too often?
Most of us probably think a car’s oil needs to be changed every 3,000 miles. But that’s an old mechanics tale these days. Did you know that many car manuals now actually recommend changing the oil every 5,000, 7,500 or even 10,000 miles? That means you may be changing your oil twice or even three times as often as you need to! In fact, a recent study in California indicated that 73 percent of Californians change their oil more frequently than recommended by the manufacturers.
So how often should you change your oil?
The fact is, oil changes should be determined by what, how, and where you drive. If you have a newer car with little or no engine wear, you can probably go 7,500 miles between oil changes. And even if you have a slightly older car, but drive under ideal conditions such as predominantly highway, you can go a similar distance before changing.
Of course, many of us actually don’t drive under “ideal” conditions…if you make many short trips, endure lots of stop-and-go traffic, drive on gravel or dusty roads – then you might need to change your oil more frequently. So how do you know – and take advantage of saving money by only changing oil when it’s really needed?
Technology to the rescue
There are a few ways you can actually eliminate the guesswork. If you have a newer car, it may have a built-in sensor that estimates oil life based on engine running time, miles driven, outside temperature, coolant temperature and other operating conditions. When the indicator light comes on, it’s time to change the oil. It’s that simple.
Another idea is to purchase an oil monitoring sensor, such as the IntelliStick. These sensors are used in place of your car’s original dipstick and provide you with real-time, accurate information about the true condition of your oil. Better still, these sensors often have a transponder built into them so you can quickly and easily check the condition of your oil at any time using a cell phone, PDA or computer with Bluetooth connectivity…now that’s really going high tech.
Bottom line – dollars spent on oil changes add up fast. Especially with the increasing price of oil, it pays to be smart, check the manufacturer’s recommendations…and not let too-frequent oil changes cost you!
Ernest Tepman
President
The OCD Group Inc.
Los Angeles: 800-963-4623
San Diego: 877-863-4623
E-Mail: marketupdate@theocdgroup.com
FHA LOANS & DOWNPAYMENT ASSISTANCE
As you are aware, it has become very difficult to close loans today due to recent changes in the Conventional and Sub-Prime markets. Stated Income is gone, minimum credit scores have been raised and the 5% Declining Market has killed pretty much every 100% program.
Now the Mortgage Insurance Companies are pulling back! They want even higher minimum scores, lower LTV’s, and will soon be charging higher premiums.
FHA on the other hand is trying to help. They have increased the maximum loan amount to as high as $729,750! They are considering lowering Mortgage Insurance rates, and talking about lower down payment requirements from 3% down to zero!!
Currently, FHA is the only program that does not have a minimum credit score requirement, they allow for non-occupying co-borrowers, and does not require the buyer to have any money of his own invested into the property.
Additionally, you can use maximum FHA financing on SFR’s, Condo’s, PUD’s (Town Homes), Units, and Manufactured Homes. And there are no “Declining Market” reductions at all!!
FHA still allows for Down Payment Assistance Programs such as Nehemiah, HART, Ameridream, Access, Gold, and others. There are programs available that will allow the seller to contribute up to 12% for Down Payment and Closing Costs!!
Refinancing? How about 95% LTV on Cash Out, 97% on Rate and Term, and for recently listed properties you only need the home to be off the market for 1 day. And if needed, you can even add co-borrowers to help with qualifying!!
FHA may soon be the only affordable loan program above 90%!!!!!
Commissions on FHA loans are higher than any other loan program! As a Loan Officer with us you share in the Origination Fee, Rebate/Premium Pricing, and SRP (Service Release Premium). You should make up to 2% or more on your transactions!!!
We have been involved with FHA financing for over 15 years, we have the knowledge and experience to help you and your clients. Please call or email us with your questions, we look forward to hearing from you.
Thank you,
Kevin McRae
1(888) 655-5000
Kevin@homefinderscenter.com
HUD Approves Borrower Paid Counseling For Reverse Mortgages
May 16th, 2008 Published in News, Reverse Mortgage
A few reverse mortgage related headlines from the week:
The incredible shrinking nest egg (USAToday)
Could a reverse mortgage save your parents lifestyle? (TriCities.com)
Look before slamming it into reverse (ChicagoTribune)
Woman given 10 days to leave home of 40 years (KVAL)
Today the Senior Lending Network kicks off their Senior Independent Living Month which will run from May 15 through June 15. All mortgage originators affiliated with the Senior Lending Network are joining forces in a series of events to promote social responsibility and ethical treatment of seniors and discuss the positive benefits of reverse mortgages.
As part of Senior Independent Living Month, the Senior Lending Network and the National Association of Home Builders are joining forces with Rebuilding Together New Orleans to rebuild a home damaged by Hurricane Katrina. Volunteers from NAHB’s 50+ Housing Council will participate in a two-day community service project May 17-18 to help rebuild the home of displaced owners Hazel Tate, age 87, and Hilda Levy, age 67. On May 18, the three groups will host a media event featuring your favorite reverse mortgage spokesman Robert Wagner, spokesperson for the Senior Lending Network, to meet the homeowners and provide guided tours of the home and show its progress to date.
Since the overall goal of Senior Independent Living Month is to promote social responsibility, ethical treatment of seniors, and discuss the positive benefits of reverse mortgages, the Senior Lending Network is offering a FREE training session for RMD readers. The session will cover tips on how to generate positive press in the media and help grow your business. Below are just a few of the things that will be covered:
How to issue a press release to the wires
Tips for reaching out to local media, identifying prospective media contacts
Tips for creating community related campaigns in your area for seniors
Join us Thursday, May 22, 2008 at 2:00 PM (EST), space is limited so Sign Up Now!
In addition to the Free training session to RMD readers, the company is offering promotional literature about Senior Independent Living Month for its originator partners on their website.
World Alliance Financial Declares Senior Independent Living Month (Yahoo)
Mortgage Market Review
Provided to you Exclusively by President of The OCD Group Inc. Ernest Tepman
Last Week in Review
“TALENT WITHOUT DISCIPLINE IS LIKE AN OCTOPUS ON ROLLER SKATES. THERE’S PLENTY OF MOVEMENT, BUT YOU NEVER KNOW IF IT’S GOING TO BE FORWARD, BACKWARD, OR SIDEWAYS.” H Jackson Brown Jr. And just like that strange visual of an octopus on skates, so goes the volatile Bond market in recent days – and last week, Bonds and home loan rates skated around, but ultimately closed out the week very close to where they had begun.
Bonds and home loan rates ended the week on a sour note, but had spent the early part of the week moving sideways and slightly higher on a blend of mixed economic news and action in the Stock market. Grim news arrived from insurance giant American International Group (AIG), who reported an enormous first-quarter loss of $7.81 Billion or $3.09 a share, compared with earnings of $4.13 Billion just a year ago. The important part of this loss is due to write-downs on Mortgage Bonds, which tells us that the credit crisis is not yet entirely behind us. On these negative headlines, Stocks moved lower and money flowed over into Bonds, helping home loan rates improve.
By Thursday, Bonds were looking good and holding their ground above several floors of technical support, as the weekly Initial Jobless Claims numbers were reported at 365,000, slightly below expectations of 375,000. The more closely watched four-week average of Claims edged higher to 367,500. This not-so-hot read on the labor market helped Bonds and home loan rates continue to improve.
But then on Friday, Bonds gave back some gains on news of oil hitting $126 per barrel – and the inflationary effects of high oil prices is bad news for both Stocks and Bonds. Oil prices are reaching exceptionally high levels, and may get higher still. Read on for where oil prices are forecast to go in the future – and what it means for home loan rates.
AND IT’S NOT JUST FILLING UP THE TANK WHERE YOU’RE SEEING PRICE INCREASES…IT’S WHEN FILLING UP YOUR BELLY AS WELL! THAT’S RIGHT, FOOD AND DRINK PRICES ARE ON THE RISE IN A BIG WAY. CHECK OUT THIS WEEK’S MORTGAGE MARKET VIEW FOR SOME MONEY-SAVING TIPS!
Forecast for the Week
After last week’s thin economic calendar, where Stock market action and technical factors had a big impact on Bonds and home loan rates, this coming week brings a much juicier economic report agenda.
Retail Sales for April will be reported on Tuesday, followed by Wednesday’s Consumer Price Index (CPI). This widely watched measure of consumer inflation will take special significance, now that the Fed has signaled their current rate cutting cycle may be at an end. On Thursday comes a read on the new construction housing market, with Housing Starts and Building Permits. We will have to see if these reports can keep Bonds above their 50- and 100-Day Moving Averages…as seen in the chart below. If the reports are economically weak or negative, Bond prices and home loan rates should hold their ground, and perhaps even find some improvement.
Remember when Bond prices move higher, home loan rates move lower…and vice versa. And right now, there’s an important story breaking that will be very important to stay tuned in to. Last Friday, oil prices reached a lofty $126 a barrel, and Goldman Sachs is forecasting that black gold could rise even higher, perhaps as high as $150 – $200 a barrel in the next twelve months. If they are right, the inflationary effects of high oil prices could pressure Bond prices to move lower, causing home loan rates to move higher. This will be a story to watch carefully in the days and months ahead.
The Mortgage Market View…
RISING PRICES NOT JUST AT THE GAS PUMP…
If you’ve noticed your grocery bill getting bigger lately, you’re not alone – and it’s likely not because you’re eating more. According to Rising Food Prices: Policy Options and World Bank Response, global wheat prices have increased a whopping 181% over the past three years – and overall, food prices have increased by 83%!
Concerned? You’re not alone. A recent poll showed that 73% of consumers cite higher grocery bills as a concern; with nearly half saying food inflation has caused a hardship for their households. In fact, food prices ranked just below record-high gasoline prices on the list of things people are worried about.
According to Gregory Karp, author of Living Rich by Spending Smart, here are three simple ways you can save when it comes to food and drink prices:
Time your grocery shopping. With the exception of milk, eggs, and bread, most grocery store products are put on sale at least once every 12 weeks, as Karp notes, often for “20%-30% their usual price.” So instead of buying what you need every week or two, stock up on non-perishables when they go on sale. It may take a little planning ahead on your part, but the annual savings is substantial. As Karp writes, “The average American family of four spends about $8,500 on groceries each year. Trimming that bill by 20% saves $1,700.”
Make eating out a special treat. Enjoying a nice meal out is always a fun thing to do, so let it be just that, a fun thing to do rather than a solution for being too tired or too rushed to cook. When you do have the time and energy to cook, make two or three times the amount and freeze the extras. Then, when you’re rushed, a home-cooked (and probably healthier) meal will be waiting in your freezer, and will likely take less time to reheat than a night out or take-out delivery. And you will save more than time: According to Karp, “A restaurant meal for two costs $30 even at inexpensive chain restaurants. Home-cooked meals typically cost half as much, if not less. Convert two restaurant trips into two frozen homemade dinners each month, and you will save $360 per year.”
Don’t buy bottled water. Believe it or not, recent tests have shown that bottled water and tap water are pretty equal when it comes to safety and taste. For example, ABC News tested New York City tap water and bottled water for bacteria and found no difference in purity. Plus, there are environmental benefits of using less plastic. Karp estimates that people who drink one $6 case of bottled water each week can save $311 per year if they stop buying bottled water. He notes that “tap water costs five cents per gallon, or less than two cents per equivalent case – about $1 for the year.”
Hey, if you eat…rising food prices impact you. Use the above tips and suggestions to help minimize your concerns about rising food prices, and stay healthy and smart.
The Week’s Economic Indicator Calendar
Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.
Ernest Tepman
President
The OCD Group Inc.
Los Angeles: 800-963-4623
San Diego: 877-863-4623
E-Mail: marketupdate@theocdgroup.com
Firms Adopt New Appraisal Rules
Mortgage giants Fannie Mae and Freddie Mac agreed Monday to take steps to combat inflated home appraisals, but critics doubted the changes would do much good.
In an agreement with New York Atty. Gen. Andrew Cuomo, the companies said they would purchase home loans only from lenders that follow new rules spelling out how home appraisals can be conducted. The goal is to force lenders to get appraisals from independent experts who give objective and accurate valuations.
Though appraisers are supposed to be unbiased, critics say they are pressured to give inflated valuations by mortgage brokers and lenders who collect fees based on the dollar value of loans they make. Routine overstatement of home values contributed to the run-up in prices during this decade’s nationwide housing bubble, the critics say. “Today’s agreement with Fannie Mae and Freddie Mac begins to set right what had gone so horribly wrong in the mortgage industry — rampant appraisal fraud,” Cuomo said. “The integrity of our mortgage system depends on independent appraisals.” Some appraisers, however, said the agreement, which takes effect at the start of next year, was unlikely to solve the problem.
Banks will continue to put unspoken pressure on appraisers to value homes at desired levels, said Bill King, owner of ValueOne Appraisal in Federal Way, Wash. “It’s going to be a long time before the fundamental way business gets done gets changed,” King said.
And many appraisers still will do as banks and brokers ask because they want to keep getting hired, said Steve Smith, an appraiser in San Bernardino who has been critical of the industry. “There are more ethical appraisers who have been put out of business than there are appraisers who remain in business,” Smith said. The American Society of Appraisers praised the accord but said the ban on all in-house appraisals could penalize honest appraisers who work for banks.
Fannie Mae and Freddie Mac are government-chartered companies that buy mortgages from lenders, freeing the banks to make many more loans than if they kept the debt on their books. Under the accord, Fannie Mae and Freddie Mac agreed not to purchase loans from banks that use their own employees or affiliated companies to conduct appraisals. Mortgage brokers also would be barred from selecting appraisers. Fannie Mae and Freddie Mac also agreed to pay $24 million to fund an oversight board to monitor compliance with the agreement. The new body would operate a hotline for homeowners and appraisers to lodge allegations of wrongdoin g. Cuomo subpoenaed the two housing-finance companies in November as part of a year-long investigation of mortgage fraud.
In November, Cuomo filed a civil suit accusing a home-appraisal unit of Santa Ana-based First American Corp. of inflating the value of homes, thereby encouraging consumers to pay too much for them or to borrow against equity they didn’t have. First American overstated home values at the behest of home lender Washington Mutual Inc., according to the suit, which is still pending. First American and Washington Mutual have denied wrongdoing. Shares of Fannie Mae and Freddie Mac slumped Monday, as did the stocks of most mortgage lenders. Fannie Mae fell $1.21, or 4.4%, to $26.44. Freddie Mac was down $1.46, or 5.8%, to $23.72.
source: http://www.accountability-central.com/single-view-default/single-view-lexis-nexis/browse/4/article/firms-adopt-new-appraisal-rules-fannie-mae-and-freddie-mac-agree-to-help-deter-inflated-home-valuat/?tx_ttnews%5BbackPid%5D=1&cHash=1d8de8e7f0
