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Mortgage fraud schemes rose 31 percent last year and will likely keep rising in 2008, FBI says The agency said Tuesday that reports of suspected mortgage fraud rose 31 percent to 46,717 in fiscal 2007... That was up from 35,617 in the previous fiscal year. That number "is just the tip of the iceberg, reflecting only a small percentage of financial damage suffered by victims of mortgage fraud," Florida led the led the nation in mortgage fraud in 2007 for the second straight year, followed by Nevada, Michigan, California, Utah and Georgia.

Congressmen are like myna birds. If you teach them a phrase, they will repeat it over and over, without the slightest idea what they're saying or what it means. Like “upside down.” Last week a congressman was boasting about a big mortgage bailout plan the Democrats flushed through the House of Representatives. It would put the taxpayers on the hook for the mortgages of people who weren't making their payments. Under the legislation, home lenders would sell their bum mortgages to the federal government at 90 percent of the value of the mortgaged property. That requires the lender to take...

ELK GROVE VILLAGE, Ill. — The foreclosure crisis is hitting yet another American locale: the self-storage center. As they lose their homes, people are turning to these humble cinderblock and sheet-metal boxes to store their stuff. But some people cannot keep up with their storage bills any better than they could handle their mortgage payments, and storage companies are auctioning off their property for a pittance.

The subprime mortgage meltdown has cost the world 15% of its market capitalization, about $9 trillion. The primary culprit who caused all of this financial loss, pain and suffering is not the mortgage companies. Neither is it the overextended borrowers. It is our own federal regulations interfering with the free market. ... The unintended consequences of good intentions can do more economic harm than all the mean-spirited greed within capitalism. Part of the good intention was forcing banks to be good neighbors by making altruistic loans that discriminated in favor of underprivileged communities. Any attempts by banks to set higher...

What does that mean for all of us tax-paying angry renters and honorable homeowners who have paid their loans on time?

In a speech Monday night before the Columbia Business School’s 32nd Annual Dinner, Fed Chairman Ben Bernanke said that, “”About one quarter of subprime adjustable-rate mortgages are currently 90 days or more delinquent or in foreclosure.” He also said that, “Delinquency rates also have increased in the prime and near-prime segments of the mortgage market, although not nearly so much as in the subprime sector. As a consequence of rising delinquencies, foreclosure proceedings were initiated on some 1.5 million U.S. homes during 2007, up 53 percent from 2006, and the rate of foreclosure starts looks likely to be yet higher...

The global credit crunch has eased for bankers, says Warren Buffett. “The worst of the crisis on Wall Street is over,” Buffett said. “In terms of people with individual mortgages, there’s a lot of pain left to come...

Countrywide Financial Corp. reported an $893 million loss for the first quarter, amid mounting evidence of serious problems with its underwriting of many home loans. A federal probe of Countrywide, the nation's largest mortgage lender, is turning up evidence that sales executives at the company deliberately overlooked inflated income figures for many borrowers, people with knowledge of the investigation say. Some of the problems are surfacing in a mortgage program called "Fast and Easy," in which borrowers were asked to provide little or no documentation of their finances, according to these people and to former Countrywide employees. Both Countrywide and...

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Obama's subprime pal PENNY PRITZKER Finance chief's bank failed in 2001, costing 1,400 customers some of their savings April 28, 2008 BY ABDON M. PALLASCH Political Reporter/apallasch@suntimes.com White House hopeful Barack Obama talks a lot on the campaign trail about how failing banks have used subprime loans to victimize customers. "Part of the reason we got a current mortgage crisis has to do with the fact that people got suckered in to loans that they could not pay," he told a crowd in Reading, Pa., last week. "There were a lot of predatory loans that were given out, a lot...

....there's one piece of the mortgage-meltdown tale that virtually every article or television program dances around without ever quite confronting. It's the story of the liar's loan. At the height of the mortgage boom .the liar's loan became a routine way of doing business;.in 2006 in some parts of the country, these loans made up as much as half of new mortgages Imagine a city center where running red lights isn't something occasional .... but where everybody does it all the time. That's a lot like the mortgage market one or two years ago. Of all the problems in mortgage...

Plaintiffs have filed approximately two private lawsuits a day related to subprime mortgages in the US this year, setting case volumes on course to exceed levels not seen since the aftermath of the savings-and-loan ­crisis, a study has found. During the first quarter of this year, 170 new civil cases were filed in federal courts, approaching the 181 filings made during the final six months of 2007, according to a review by Navigant Consulting, published on Wednesday. They were overwhelmingly dominated by class-action lawsuits, which accounted for 76 per cent of new cases. “Like the credit crunch itself, the litigation...

"Mortgage Crisis," shouts the New York Times. The Times has used the term "subprime crisis" at least 11 times. Not in opinion columns -- in news stories. The columns are worse. Paul Krugman writes: "A lot of the financial system looks like it's going to shrivel up and have to be rebuilt." The "financial crisis," says Fortune's senior editor, "is threatening to bring down the entire system, with dire consequences." When the current troubles aren't a "crisis," they're a "disaster". That's what John McCain called them, while Hillary Clinton prefers "crisis," saying, "This market is clearly broken, and, if we...

LendingTree has told its customers that former employees helped unauthorized mortgage lenders hack into its systems and steal customer information from 2006 to 2008. The incident reveals just how aggressive the mortgage loan business was during the height of the housing boom, and also raises fears for consumers who share their information with companies that help them shop around for the best deal. And it highlights what experts say is an often overlooked source of data theft -- the inside job. According to a letter sent to customers recently, former LendingTree LLC employees shared "confidential passwords" with lenders, who in...

National City Corp. this morning announced details of its $7 billion bailout and said it lost $171 million, or 27 cents a share, in the first quarter. That was not as bad as the fourth quarter, when the Cleveland bank lost $333 million, but it was worse than last year's first quarter, when it had profits of $319 million. In a written statement, Ohio's largest bank said its board had finished details on a deal reached Sunday. As the Plain Dealer reported Sunday evening, National City is getting $7 billion of much-needed capital from the New York private equity firm...

...Up until 1995 the Community Reinvestment Act was largely a requirement to support "community groups" in poor neighborhoods. Of course, this often meant left wing groups like ACORN, etc. But after 1995 the scope of the law was dramatically increased. Over the strenuous objections of the banks themselves and some Republicans in Congress, CRA was renewed and modified in such a way that it gave far more power to the federal government to punish banks for not lending more widely in poor neighborhoods. The classic "fair housing" laws from the Martin Luther King Jr. era of civil rights were deemed...

The housing market has been hit falling numbers of available mortgages The Bank of England is poised to launch a new lending programme for UK banks in an effort to break the logjam in the credit market, the BBC has learned. Final details are still being worked out including the scale of the plan and the exact terms. But it will be similar to moves in the US, will be backed by the Treasury and could be launched as soon as next week. The scheme would temporarily allow banks to swap their mortgage-based assets for government bonds. The hope...

There has been a lot of talk in the news recently about the Federal Reserve and the actions it has taken over the past few months. Many media pundits have been bending over backwards to praise the Fed for supposedly restoring stability to the market. This interpretation of the Fed's actions couldn't be further from the truth. The current market crisis began because of Federal Reserve monetary policy during the early 2000s in which the Fed lowered the interest rate to a below-market rate. The artificially low rates led to overinvestment in housing and other malinvestments. When the first indications...

IT was the nation’s lending institutions and mortgage originators that got us into this credit mess, but it is consumers, taxpayers and those companies’ shareholders who will end up shouldering most of the costs. The latest example of this is in the mass freezing of home equity lines of credit going on across the country. Reeling from losses on their wretched loan decisions of recent years, lenders are preventing borrowers with pristine credit and significant equity in their homes from tapping into credit lines that they paid dearly to secure. In the last 30 days, lenders have sent several hundred...

Senator John McCain, who drew criticism last month after he warned against broad government intervention to solve the deepening mortgage crisis, pivoted Thursday and called for the federal government to aid some homeowners in danger of losing their homes, by helping them to refinance and get federally guaranteed 30-year mortgages. “There is nothing more important than keeping alive the American dream to own your home, and priority No. 1 is to keep well-meaning, deserving homeowners who are facing foreclosure in their homes,” Mr. McCain said in a speech on economic themes that he gave at a window company in the...

LUBBOCK, Texas - Republican John McCain defended his latest plan to help some homeowners pay their mortgages, saying Friday it was not a reversal of his earlier opposition to aggressive intervention by the government. The likely Republican presidential nominee on Thursday proposed to help 200,000 to 400,000 homeowners trade burdensome mortgages for manageable loans, a plan that would cost $3 billion to $10 billion. Democratic rivals Sens. Hillary Rodham Clinton and Barack Obama argued that McCain was flip-flopping. Last month, he said he preferred only limited intervention and letting market forces play out, drawing criticism from Democrats and some Republicans...

Economy: Ex-Fed chief Alan Greenspan has spent the past few weeks denying he deserves blame for the housing crisis. Sorry, maestro, you do deserve some blame — but not for the reasons people think.Greenspan left office on Jan. 31, 2006, amid much praise. Indeed, he mostly did a fine job as the nation's top banker for 18 1/2 years. But his last seven years were rocky and marred by errors — errors that helped create a record stock market crash and a subsequent tailspin in the housing market that we're still trying to clean up. Writing recently in the Financial...

Alan Greenspan may be correct that a glut of global saving pumped up the housing bubble by keeping long-term interest rates low. If so, then watch out, because the situation has gotten worse: Foreign stockpiles of U.S. dollars are fatter and interest rates lower than at housing's zenith in 2005. Global central-bank reserves surged to a record $6.4 trillion in the fourth quarter of 2007, according to the International Monetary Fund, up from about $4 trillion in 2005. Those reserves are pouring into U.S. Treasury bonds for safekeeping. Foreigners held $2.32 trillion in Treasurys in the fourth quarter, compared with...

NEW YORK (AP) — Republican Sen. John McCain called for federal aid for well-meaning homeowners who can't pay their mortgages, an attempt to fend off criticism that he has been indifferent to the housing crisis and the market upheaval it has spawned. The likely GOP presidential nominee sketched out a plan Thursday to help 200,000 to 400,000 homeowners trade burdensome mortgages for manageable loans in a speech in Brooklyn, N.Y. Aides said the plan could cost from $3 billion to $10 billion. Still missing were details on exactly who would be eligible for help; McCain said he wants to aid...

The Bush administration yesterday unveiled a plan to rescue 100,000 homeowners at risk of foreclosure by relaxing eligibility standards for government-backed loans and encouraging lenders to forgive a portion of their debt. The proposal was quickly criticized by consumer groups, who said it would do little to slow a mortgage meltdown that last year threw more than 1.5 million households into foreclosure. But it was embraced by key Democrats, who said the White House is acknowledging that more aggressive government action is needed to help the most hard-pressed borrowers who owe banks more than their homes are worth because of...

Regulation Is the Wrong Answer : Mortgage market will correct itself without Washington’s help Thomas C. Patterson, Goldwater Institute Daily Email, April 09, 2008 Since 2001, the number of employees in government regulatory agencies has grown from 172,002 to 244,000. Their funding has increased 44 percent, inflation-adjusted. As a result, Americans face $30 billion more annually in regulatory costs than they did seven years ago. All told, we pay about $1.1 trillion for regulation and compliance costs, about the same as we pay in federal income taxes. In spite of its massive costs, regulation has been unable to prevent market...

"Oh, no! Two dollars!" So cried investors three weeks ago. The Federal Reserve had just announced that it was lowering the discount rate by a quarter of a point and had arranged for the sale of Bear Stearns to JPMorgan Chase. Stock futures jumped on news of the discount rate cut and Bear sale until investors heard the price. The market's anxiety was justified. If a legendary Wall Street investment bank that investors valued at over $100 per share just last December was suddenly worth next to nothing, what were the other Wall Street firms, such as Goldman Sachs, Merrill,...

WASHINGTON - Democrats are split over how to respond to the housing crisis, with House leaders focusing on helping homeowners facing foreclosure while the Senate moves to take care of businesses impacted by the subprime crisis. The Senate could pass its bipartisan business-friendly measure, which showers some $25 billion in tax breaks on home builders and banks, as early as Wednesday. That's also when a key House panel is to consider a rival Democratic plan that instead steers tax breaks toward first-time home-buyers and investors in low-income rental housing.

SEATTLE (AP) -- Washington Mutual Inc., the country's largest savings and loan, said Tuesday it will receive $7 billion in new capital from an investment group led by private equity firm TPG. The new investment will boost the Seattle-based bank's capital at a time when it has been hit hard by rising delinquencies and defaults among mortgages. The bank said it will lose $1.1 billion during the first quarter and take a provision for loan losses of $3.5 billion. Washington Mutual will sell equity securities to an investment fund managed by TPG Capital and to other investors in order to...

think few people realize that America/the world is facing the biggest financial storm ever, and how dangerous it is for investing in stocks before a full implosion. The housing-induced credit crisis has gone far beyond anyone can potentially control, probably not even the Fed. Reading over so many current/future proposals from politicians and bloggers, I have my own thoughts in this. For sure, there simply isn’t a solution without pain. But there can certainly be solutions that are more fair and less pain. One of the most fair and easiest way to help propping up the housing market is to...

A most astounding program has appeared on national Japanese TV, viewed by millions, in prime time. Just this last Friday night, April 4th. It is a new show called "Wakaru TV", or "TV You Can Understand". They take five or six topical news buzzwords of the day which are often heard, but not truly understood by everyone--and then they give a core explanation of the word, with graphics, statistics and reenactments.The Americans' "SUB PRIME DISASTER" was one of these words this last Friday night. What the Japanese moderator/announcer stated, and the panel agreed (some in true disbelief) showed that...

...But the real cause of the housing mess is a classic bubble in the housing market, the bursting of which has hammered lenders as well as borrowers. If the market had continued to rise, we never would have heard complaints about subprime loans. In fact, Washington had long encouraged these sorts of loans through the Community Reinvestment Act (CRA) as a way to make marginal - largely minority - borrowers into homeowners. What's the difference between socially responsible loans extending the American dream to deserving people with poor credit histories and predatory lending? It's whether those loans work out or...

Washington - Republicans and business-friendly Democrats on Thursday scuttled a plan to give people threatened with losing their homes more leverage in winning favorable loan terms from their lenders in bankruptcy courts. The Senate killed the bankruptcy plan by a 58-36 vote on the first full day of debate on a bill designed to boost the slumping housing market.The Democratic-backed bankruptcy law changes, opposed by banks and their GOP allies and a handful of Democrats, would have given judges the power to cut interest rates and principal on troubled mortgages to help desperate borrowers trapped in subprime mortgages keep their...

Thursday's Senate hearing on the Bear Stearns bailout included a lot of obligatory testimony and political grandstanding, which was predictable. Missing from the dog and pony show, however: Any sense of accountability from Bear CEO Alan Schwartz. Schwartz blamed the disaster on a "run on the bank" stemming from "unfounded rumors and attendant speculation [which] became self-fulfilling." And while it's true rumors persist that Bear Stearns was the target of short-sellers, rumor-mongering is part of the reality on Wall Street. Schwartz also cited an "honest disagreement" over the length of a short-term lending facility granted by JPMorgan days before Bear's...

WASHINGTON — Homebuilders and the mortgage industry are emerging as big victors in a bipartisan agreement reached by Senate leaders on legislation designed to limit the housing crisis. The $15 billion Foreclosure Prevention Act of 2008, expected to be debated Thursday afternoon on the Senate floor, is drawing fire from critics who say it would do little to actually prevent foreclosures. The bill contains a $6 billion emergency tax break that would let companies use losses from 2008 and 2009 to offset profits earned over the previous four years, instead of the usual two-year timeframe. That's good news for big...

WASHINGTON (Reuters) - The U.S. Senate on Thursday voted against adding an amendment to a housing market rescue bill that would have given bankruptcy judges the power to ease mortgage payment terms for some distressed borrowers. Offered as an amendment by Illinois Democratic Sen. Richard Durbin to a broad bill hammered out earlier this week, the amendment was opposed by Republicans and the banking industry. The overall bill, estimated to cost $15 billion to $20 billion, would give homebuilders and other businesses hit hard by the recent housing slump a $6 billion temporary tax break. It would also give the...

False ideology at the heart of the financial crisis By George Soros Published: April 2 2008 18:11 | Last updated: April 2 2008 18:11 The proposal from Hank Paulson, US Treasury secretary, for reorganising government regulation of financial institutions misses the point. We need new thinking, not a reshuffling of regulatory agencies. The Federal Reserve has long had authority to issue rules for the mortgage industry but failed to exercise it. For the past 25 years or so the financial authorities and institutions they regulate have been guided by market fundamentalism: the belief that markets tend towards equilibrium and that...

The securities backing a $29 billion Fed loan to Bear Stearns Cos. consist primarily of “mortgage backed securities and related hedge investments,” the Treasury Department says. ..snip... Treasury also supplied a letter from Secretary Henry Paulson to Federal Reserve Bank of New York President Timothy Geithner, dated March 17, saying, “On behalf of the Department of Treasury, I support this action as appropriate and in the government’s interest, and acknowledge that if any loss arises out of the special facility extended by the FRBNY to JPMCB [J.P. Morgan Chase Bank], the loss will be treated by the FRBNY as an...

Both contenders for the Democratic nomination for president, Hillary Clinton and Barack Obama, have made statements about the efforts of the federal government to combat the problems caused by the collapse of the housing bubble. To paraphrase both of them, what they are saying is that it is somehow immoral to take steps to protect the financial system without bailing out individuals who, through their stupidity and/or their selfishness, are in danger of losing their homes. Both would turn over the tax money of working Americans to people who overreached themselves or are the victims of their own greed. It...

Kent and Mysti Cope met and fell in love working for one of the nation's top subprime lenders. Now, their life has been turned upside down after the sudden implosion of the subprime mortgage industry. Mysti was one of the last people out the door at New Century Financial Kent worked for several of the firms that helped give birth to the industry, which specializes in making loans to people with less-than-perfect credit Today, they're trying to get by on his unemployment benefits of about $450 a week, which covers only about an eighth of the basic payments they owe...

The Bush administration may be moving closer to embracing the most sweeping idea in Congress for putting a floor under housing. Under the plan, the government would take over distressed mortgages after the current holders agree to slash the value of the loans to reflect falling home prices. In effect, the government would swap cash for nonperforming loans, pumping liquidity into the financial system. Because the plan would lift borrowers with negative equity back above water, homeowners would have greater incentive to avoid foreclosure. House Financial Services Committee Chairman Barney Frank and Senate Banking Committee Chairman Chris Dodd have made...

Construction skid sidelines Latino immigrant workersBy Susan Ferriss - sferriss@sacbee.co Published 12:00 am PDT Sunday, March 30, 2008 Story appeared in METRO section, Page B3 Jose Espinosa worked his way out of the strawberry fields of Central California in the early 1990s, determined to learn a profitable trade. **SNIP** Latino immigrants like Espinosa, legal and illegal, were the backbone of California's housing boom, and they are feeling the pain of what Espinosa calls "una recesion." **SNIP** About a quarter of the nation's construction workers are Latinos, according to the Pew Hispanic Center, a research institute in Washington, D.C. Pew also...

Careers vanish after subprime 'free fall' Kent and Mysti Cope were well-paid executives at subprime lenders who never thought the industry could disappear overnight. Now they're just trying to get by. By Chris Isidore, CNNMoney.com senior writer March 31, 2008: 5:30 AM EDT SAN CLEMENTE, Calif. (CNNMoney.com) -- Kent and Mysti Cope met and fell in love working for one of the nation's top subprime lenders. Now, their life has been turned upside down after the sudden implosion of the subprime mortgage industry. Mysti was one of the last people out the door at New Century Financial, once the nation's...

An influential member of the Federal Reserve called for more financial education to help low-income mortgage borrowers Monday. In a speech given at the National Interagency Community Reinvestment Conference in San Francisco, Janet Yellen, the president of the Federal Reserve Bank of San Francisco, said the mortgage crisis could hit lower income and minority communities the hardest. Community impact "The foreclosure crisis is likely to have a profound impact on the communities you work in, with effects that go well beyond the housing sector," she said. A rise in foreclosures could drive down property values and increase crime, as well...

Two months ago, Lisa and Eric Jacobs of Brockton attended a regional seminar on how to avoid foreclosure, hoping they would soon see their way clear. Two weeks ago, they gave up. Buried in debt, with a condo worth far less than what they owed in mortgages, the Jacobses, both in their 40s and without children, figured it made more sense to let the bank foreclose. They owe $180,000 and believe their two-bedroom in Madrid Square is worth $140,000. With a combined annual income of about $60,000, they figured they could afford to pay about $1,100 a month - but...

WASHINGTON (AP) -- Congressional leaders are racing to push through an array of election-year housing measures that already have stirred up much political wrangling and the White House is examining its own plan to further help homeowners caught in the mortgage meltdown. With foreclosure signs prevalent and a Wall Street rescue reverberating, majority Democrats want the government to step in and back up to $400 billion in troubled loans. The goal is to help strapped borrowers and thaw a credit market plagued by uncertainty about the value of subprime mortgages made to people with spotty credit or low incomes. As...

This is a powerpoint presentation which explains the subprime debacle graphically (warning: graphic language, specifically a Norwegian villager using the F word). To view online using google click here: http://docs.google.com/TeamPresent?docid=ddp4zq7n_0cdjsr4fn&skipauth=true To download and view with powerpoint or save, click here: http://boombustblog.com/images/stories/what_happened_in_stick_figure_simplicity.pps

WASHINGTON – While Hillary Clinton campaigns for the Democratic presidential nomination in neighborhoods where many have lost their homes in unscrupulous lending schemes, her campaign manager, Margaret "Maggie" Williams, sits on the board of one of the nation's once-largest and now-bankrupt sub-prime mortgage lenders. Williams joined the board of directors at New York-based Delta Financial Corporation in 2000, one month after a federal settlement was reached with Delta Financial over discriminatory lending practices.

Last year, forty-three states reported increased home foreclosure rates. Nevada led the way for eleven consecutive months; in Clark County, which includes Las Vegas, nearly one in twenty homes is in foreclosure. Whole blocks have been foreclosed in Chicago. Nationwide, rates are nearing Depression-era highs--ravaging working- and middle-class neighborhoods that fell prey to the soft sell and outright chicanery of predatory lenders in the heyday of the housing boom. These lenders have targeted the most vulnerable--black and Latino borrowers have been twice as likely to receive subprime loans as whites; female homeowners, 30 percent more likely than male; black women,...

For Immediate ReleaseOffice of the Press SecretaryMarch 29, 2008 President's Radio Address   President's Radio Address  Audio  En Español       In Focus: EconomyTHE PRESIDENT: Good morning. It's not every day that Americans look forward to hearing from the Internal Revenue Service, but over the past few weeks many Americans have received a letter from the IRS with some good news. The letters explain that millions of individuals and families will soon be receiving tax rebates, thanks to the economic growth package that Congress passed and I signed into law last month. Americans who are eligible for a rebate will get it automatically...