FHA Troubles – Taxpayer Bailout Possible

A independent audit to be released on today projects that the Federal Housing Administration (FHA), a government agency that insures mortgages, will not have the cash reserves to pay all of its obligations, with the total shortfall amounting to about $16.3 billion.

“This does not mean F.H.A. has insufficient cash to pay insurance claims, a current operating deficit or will need to immediately draw funds from the Treasury,” the report stressed.

FHA insures more than $1 trillion in mortgages, but its reserves fell to below $3 billion last year making a Taxpayer bailout very likely. The coming report cites a number of additional weaknesses on the agency’s books.

“We will continue to take aggressive steps to protect F.H.A.’s financial health while ensuring that F.H.A. continues to perform its historic role of providing access to homeownership for underserved communities and supporting the housing market during tough economic times,” said Carol J. Galante, its acting commissioner, in a statement.

The F.H.A. “has weathered the storm of the recent economic and housing crisis by taking the most aggressive and sweeping actions in its history to reform risk management, credit policy, lender enforcement and consumer protections,” Shaun Donovan, the secretary of housing and urban development, said in a statement.

Politicians in Washington, particularly Republicans, have voiced concerns that the agency could become a drain on the taxpayer, much like Fannie Mae and Freddie Mac. Those two mortgage finance giants have not required additional taxpayer funding in recent quarters, as the housing market has stabilized. But they have nevertheless received about $190 billion in federal financing in the last four years.

An agency release cites three reasons for its deteriorating financial position. Home prices have not risen as quickly as the administration’s actuaries expected. Low interest rates have weakened its books. The agency’s independent actuary used a “refined methodology this year to more precisely predict” its losses.

More broadly, the agency is still struggling from the burst of the real estate bubble. By many measures, housing prices have only recently started to stabilize and increase. The rate of foreclosures remains high.

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Mortgage Loan Compliance
The Forensic Loan Audit Company

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Are Lenders Too Big To Jail?

Roy Oppenheim, Co-Founder of Oppenheim Law in Fort Lauderdale, Florida and creator of South Florida Law Blog recently noted some striking similarities in a fraud involving Facebook and one you may be facing today, Robo-Signing.

Federal prosecutors have decided to indict Paul Ceglia, a fraudster, who tried to bilk Mark Zuckerberg, founder of the social network Facebook. Ceglia claimed he had a contract where Zuckerberg gave him half the company years ago in exchange for some program coding he did for the young college entrepreneur.

In a press release announcing Celiga’s arrest, U.S. Attorney Preet Bharara said after claiming that Celiga doctored, fabricated, and destroyed evidence involved with his initial lawsuit: "Ceglia's alleged conduct not only constitutes a massive fraud attempt, but also an attempted corruption of our legal system through the manufacture of false evidence. That is always intolerable."

Oppenheim highlighted that - “if you simply removed Ceglia's name in that quote and replaced it with the name of almost any bank that has serviced a mortgage in the last five years, you would have the most succinct condemnation of the robosigning crisis to come out of the mouth of a federal official. Servicers, through their use of Linda Green and friends , were relying on fraudulent or non-existent documents in foreclosure after foreclosure, at a time when Facebook was still in its college-dorm infancy. The only difference here is Ceglia has been charged, yet we have not seen a single Wall Street banker criminally prosecuted, let alone any financial institutions. But make no mistake, the crimes bare some startling similarities.”

If you’re wondering how exactly the feds are going after Ceglia, he is being charged with mail fraud and wire fraud. That is how they go after fraudsters when they have no other way to prosecute. So in essence, this case has provided Eric Schneiderman the blueprint on how to prosecute the banks.

Get The Facts On Your Loan and Protect Your Rights!

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Mortgage Loan Compliance
The Forensic Loan Audit Company

Proven Results That Work - Get The Facts, Audit Your Loan, Sue Your Lender and Protect Your Rights!

Call Today 1-866-966-6615 or Visit www.ml-compliance.com

Big Banks Give Big Bucks To Sandy Relief Efforts

Weather forecasters warned that a winter storm could hit the Northeast next week. Meanwhile hundreds of thousands of people in New York City, Long Island and New Jersey may not have power restored for up to 10 more days, officials said Thursday. With relief efforts under way, many corporations are stepping up and using their brand power to help assist those affected by Sandy.

Today, two of the “Big Four” pledged huge donations to help the Red Cross and local recovery efforts. Bank of America’s Charitable Foundation will donate $1 million to support relief efforts, including $500,000 to the American Red Cross Hurricane 2012 fund. As relief efforts evolve in the coming weeks, the remaining $500,000 will be directed to national, regional and local nonprofits to support long-term recovery needs

Wells Fargo bank will donate $1 million for relief efforts as well. A portion of the funds, $250,000, will go to the Red Cross. The remaining $750,000 will go to support nonprofits conducting grassroots relief and recovery efforts in affected areas.

As residents and business owners assess the damage caused by Hurricane Sandy, there’s a realization setting in that it will take plenty of time for things to return to normal. The Red Cross (redcross.org) provides shelter, food, health and mental health services to help families and entire communities get back on their feet. Although the Red Cross is not a government agency, it is an essential part of the response when disaster strikes.

Text REDCROSS to 90999 to Donate $10 to Disaster Relief Efforts

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Mortgage Loan Compliance
The Forensic Loan Audit Company

Proven Results That Work - Get The Facts, Audit Your Loan, Sue Your Lender and Protect Your Rights!

Call Today 1-866-966-6615 or Visit www.ml-compliance.com



Donate $10 Via Text Message*

Text REDCROSS to 90999 to donate to Disaster Relief efforts (You can make a $10.00 donation to the American Red Cross. Charges will appear on your wireless bill, or be deducted from your prepaid balance. All purchases must be authorized by account holder. Must be 18 years of age or have parental permission to participate. Message and Data Rates May Apply. Text STOP to 90999 to STOP. Text HELP to 90999 for HELP. Full Terms: www.mGive.org/T.)