March 3rd, 2008 at 1:39pm
After threatening to sue if they did not cooperate, New York Attorney General Andrew M. Cuomo has announced an agreement between his office and Freddie Mac and Fannie Mae that would require the two largest purchasers of home loans to buy home mortgages solely from lenders that meet tough new standards designed to protect home purchasers by ensuring the independence and accuracy of home appraisals.
Besides Fannie Mae and Freddie Mac, the new agreement also includes the Office of Federal Housing Enterprise Oversight (OFHEO) and will cause the creation of an independent organization whose function will be to implement and monitor the new appraisal standards.
The most important rule coming out of the “New Home Valuation Protection Code,” will be code which prohibits mortgage brokers, banks and other lenders from selecting appraisers, especially in-house appraisers, who work for appraisal firms either owned or controlled by the lender. Appraisers who believe their independence is being compromised will have the ability to file complaints with the new institute and to be protected from retaliation from lenders.
Read the Full Article in the Mortgage News Daily
March 3rd, 2008 at 9:35am
Two realtor’s groups have joined forces to fight fraud in Riverside County and the Inland Empire.
Gene Wunderlich, chairman of the Southwest Riverside County Association of Realtors, has already spoken to the Lake Elsinore and Murrieta City Councils about the types of fraud hitting the Inland area. Wunderlich and his group have teamed up with the Inland Valley Association of Realtors and says the purpose is to provide resources to local victims of fraud and to lobby law enforcement to track down and prosecute those who commit real estate fraud.
According to an article published in The Press Enterprise:
Riverside County recorded 57,241 foreclosure actions in 2007, including notices of default, foreclosure and trustee sales, and bank repossession, according to RealtyTrac Inc., an online foreclosure service based in Irvine. The rate of foreclosure in the county was fourth among counties in the state in 2007 and eighth in the nation.
Several fraud schemes are prominent in the area now:
- Applicant lies about his or her income or employment on a mortgage application. When the property forecloses, the lender is victimized, especially if the property was appraised at higher than its true value.
- Inflated home appraisals victimize both lender and investors when the perpetrator skims extra commission.
- Reverse mortgage fraud, committed against the elderly.
- Rental scams: criminal “rents” a home that he or she doesn’t own to an unsuspecting renter, then disappears with the funds.
Read the Full Article