Skip to comments.Mortgage cops taking tough stance (Chicago)
Posted on 09/16/2012 2:21:59 PM PDT by dynachrome
Strategic defaulters, beware. The feds are coming for you. And they are not happy.
Not the FBI. The Office of the Inspector General at the Federal Housing Finance Agency.
The OIG may not have the same fearsome "G-man" reputation as its better-known counterparts at the Federal Bureau of Investigation, but it is every bit as much a law enforcement agency, with the same powers to search, seize and arrest. Special OIG agents are even authorized to carry firearms.
The OIG's mission is to seek administrative sanctions, civil recoveries and criminal prosecutions against anyone who abuses the FHFA's programs. And it is pursuing its calling with passion, if not vengeance.
(Excerpt) Read more at chicagotribune.com ...
We don’t have debtor’s prisons. What else can they do, except speed evictions of nonpayers—which would on balance be a good idea?
I’d wager that they target more whites than anyone else.
They can’t speed evictions as those are controlled by state and county laws.
They’ll probably look for people with other assets and seek to take those under the tax laws.
Sounds like an opportunity for the private sector.
Give me a badge, a gun and piece of the action and I could probably clear a cool million a year bringing these deadbeats to ground.
I am in IT and could probably create a hunter/finder system in pretty short order.
I am sorry if this upsets anyone but I paid my last mortgage off completely as I promised and am paying this one off as I promised.
I have no sympathy for people who promise to pay and then renege (especially when they CAN pay). They are one of the lowest of the low of non-violent criminals.
Fraud and tax evasion will probably be the charges.
Is this one of the agencies buying lots of 40 hollow point?
Those are good charges.. but they need a court order to avoid abuse, and therein lies the rub. That's what has been so slow. Partly, the sheer numbers have overwhelmed the system. Also, banks and agencies have been unwilling to mark down their mortgage assets, preferring to carry them as nonperforming, but not fully revaluing them.
What would be awful would be a new body with administrative confiscatory police powers and no judicial supervision. A War on Mortgages to replace or augment the WOD?
“preferring to carry them as nonperforming”
Also, chain of ownership of the mortgages is iffy in several states.
Re ownership chain:
http://4closurefraud.org ran some extremely interesting articles a few months back on this topic. They had some great info on the Florida robo-signing scandal. I haven’t followed the site lately, tho.
America sure seems to have a lot of gun-toting pseudo-FBI agencies these days.......
I once had a succesfull business in Ohio. Signed all papers in good faith. Then Columbus elected a donk mayor and Ohio elected a donk governor. My 3 largest clients went belly up, and then so did I. And defaulted. Still cleaning up the mess.
You want to come for me? Bring it. I’ll treat you the same way I’ll treat any New Black Panther who tries to intimidate me at the polls because frankly I won’t see much difference.
Yes. Those pesky court orders. Somewhere recently someone noted that there are only 45 employees in the outfit. They are not going to be doing much at all, unless they avoid court orders, as MERS did with title and note transfers, and simply proceed fraudlently. With 45 employees and masses of mortgages to deal with, they might finish the process in maybe fifty years.
I think the lowest are the bankers who got billion dollar bailouts and million dollar bonuses with taxpayer money.
A new adventure series for “DOG the Bounty Hunter”
The article discusses loan fraud - applying for a second mortgage without mentioning the first. Not a CPA, but sounds like something that would stick.
Simply defaulting on a loan is not a prosecutable crime.
I would think a couple governors might have a say or two about that
>>You want to come for me? Bring it. Ill treat you the same way Ill treat any New Black Panther who tries to intimidate me at the polls because frankly I wont see much difference.<<
Read for content — if they CAN PAY. This is directed at people who use defaulting as a financial strategy.
And if you are living in your house after defaulting on the mortgage it is like driving a car you stopped making payment on.
I suspect that isn’t your situation.
Gotcha. Retracted. Agree.
They have guns?
They’re gonna shoot foreclosees?
I do agree that with 45 staff, they will accomplish nothing. Not a dent.
However, the most significant thing about this article is how misleading the headline is. They are not really going after strategic defaulters as much as those who commit application fraud. The appalling thing is that after 5 years of this crisis the news media hasn't learned very much. We have a columnist in the Palm Beach Post who is dedicated to the real estate market and she makes similar blunders every week.
The best thing I have read on the housing crisis is a white paper from the Federal Reserve Bank of Atlanta Foreclosure Externalities: Some New Evidence. My read on that is they show that delay from the lender's decision to pursue foreclosure, to the actual foreclosure and change of title, is the key to suppressed values in surrounding properties. Having a house linger in limbo (as a rental, or borrower living there rent-free, or abandoned) for 2-3 years(as is very typical in FL and NY), is what hurts. And yet you see state level efforts, as passed in CA recently to slow the process even further.
The problem was essentially caused by misguided intervention in the mortgage market by federal regulators. And you see the reflex reaction is to layer even more regulation on the sector, when the solution is to bite the bullet and speed the process of moving these properties on to their next owner.
They busted into this man's home, 15 armed up goons, grabbed him by the neck and forced out the door - then woke up his 3 little kids!!!! (imagine the fright) and put THEM in the squad car - and proceeded to search his house. (Any guess as to the mass they made?)
And WHY did they do this? They were after his estranged wife, who no longer lived there, because she was behind in her college loans. So, not only this is even worse than Nazi Germany or Communist Russia - they had the wrong house to boot.
The report has been revised to say that a local SWAT team didnt take part, but rather federal agents with the Office of the Inspector General, a semi-independent branch of the U.S. Department of Education that investigates things like student aid fraud. Even still, federal agents barging into private homes when theyre not even sure if the person in question is there?
At least we know what the Department of Education had to buy shotguns for.
Like someone said - just wait until you don't/can't pay for your O'bumblesCare insurance! Why do you think O'BumblesCare provides for hiring - and arming - 16,000 new IRS agents but not a dime for any additional doctors?
We all dam-well better make sure R & R get in or get ready to wear burkas and checkered table cloth turbans.
Well, it needs to be qualified what strategic default is and isn’t.
Just handing over the house to the bank and no longer paying the mortgage is strategic default. The mortgage is a contract, and it holds specifications on what happens for non-payment. So if someone handed over the house to the bank while they were current on the loan, and they vacated the property and the property was in good order when turned over to the bank... the terms of the contract have been met. Now the issue becomes one of whether the state is a “recourse” or “non-recourse” state, and several of the states with the largest strategic default issues (eg, California) are non-recourse states. Once the bank has been given the house and the borrowers have cleared out - then there’s nothing more that the bankers can do.
Staying in the house while not paying, or worse, renting out a home on which the borrowers have defaulted... those are criminal acts. The first varies in several states, but “squatting” comes to mind as a common enough charge.
The second could be conversion, or various other charges, as well as fraud.
I still don’t see these clowns cracking down on the real issue here, which is origination fraud. Mortgage brokers and banks have been originating paper which they knew they’d sell off to Fannie/Freddie where the borrower had no ability to repay. The originators KNEW this, and didn’t care. As long as the borrowers could fog a mirror, they wrote paper.
That was just awful! Stopping the banking system from collapsing and then repaying the Treasury plus tens of billions in interest. And billions in billions from stock warrants. Awful!
Well, that worked out well. The government should just eliminate taxes and go into the loan business. Seems profitable.
No. The government lost over 100 billion on Fannie and Freddie and we've yet to see how many tens of billions they'll lose after taking over the student loan business.
But at least no bankers will get a bonus based on student loans, right?
Congress was already unhappy about spending some $170 billion to bail out Fannie Mae and Freddie Mac, the quasi-federal agencies that own or guarantee about half the nation’s mortgages.
When Congress learned that 12 executives at Fannie and Freddie were paid some $35 million in salary and bonuses over the last two years, that was the last straw.
“These bonuses have come just as Freddie and Fannie have asked for an additional $13 billion in handout from the taxpayers,” Committee Chairman Darrell Issa, R-CA, said.
Remember the outrage when we we all learned that A.I.G., a recipient of huge federal bailout dollars, was handing out bonuses to executives who had been in charge of financial operations that lost buckets of money? Well Sallie Mae, the nations largest private student loan lender, apparently likes what it saw.
Despite losing $213 million in 2008, Sallie Maes CEO Albert L. Lord got a multimillion dollar raise as his reward. He received $4.7 million in total compensation for 2008, a raise of $3 million over his 2007 compensation. Overall, Lords collected almost a quarter billion dollars from selling loans to struggling college students during his time at Sallie Mae.
Federal mortgage police - with guns! Now the government can evict people from the wrong house at gun points. Lots of potential for bad outcomes there.
A.I.G. will end up paying back all the loans, plus billions in profits to the Treasury.
So they’re going after the mayor?
oh yeah => /s
So you agree with TARP?
Those who said at the time that we'd lose hundreds of billions on the loans to the banks were wrong.
So you think the system has been "saved"? Sort of like GM has been "saved"?
So did you get 6 or 7 figures out of all this terrific fed intervention? Just wonder since you never fail to show up and defend Barry and helicopter Ben.
Was it a good idea for the government to save GM?
Any major banks collapse since Lehman?
Sort of like GM has been "saved"?
GM couldn't make money before the crisis. After they stiffed their creditors, they still can't make money.
So did you get 6 or 7 figures out of all this terrific fed intervention?
10 or 12 figures. Maybe 15? 18? Can't remember.
Just wonder since you never fail to show up and defend Barry and helicopter Ben.
Where did I ever defend Barry?
Not the way they did it.
Thanks for the link to the Fed white paper. I plan on reading it. As for the article, it’s a great example of reporter conflating two completely different issues. You CANNOT be prosecuted for a strategic default in ANY state. It’s not a criminal act. Period!
A borrower’s decision to walk-away in the case of strategic default is a pragmatic one and usually comes down to whether or not they see value in holding onto the asset. If you happen to live in a non-recourse state, the 1st lienholder will not be able to collect on that foreclosed debt either. (Subordinate lienholders may be able to pursue you to collect the debt).
Lying on a loan application *may* constitue fraud, in which case a borrower could be prosecuted. However, that’s entirely different from strategic default. It would be nice if these reporters actually understood what they were writing.
Hey, dump a few hundred grand of tax money in my account and I won't fail either. So I am a cheap date.
Where did I ever defend Barry?
You show up to defend his actions. Everyone I read who does either benefited personally or likes big gov central planning. Yep, the banksters paid it all back. So did GM. And the doubled debt proves it.
And after you pay it back plus 10% or more interest?
You show up to defend his actions.
Where did I ever defend his actions?
Yep, the banksters paid it all back.
Yes they did.
So did GM.
LOL! Not even close.
And the doubled debt proves it.
The debt didn't come from the bank bailouts.
Bingo - trickle down doesn’t ever work does it. It’s crony capitalism all the way.