03.23.07
Posted in Industry News, Mortgage Problems at 9:11 am by Jeanne
The Mortgage Bankers Association (MBA) touts that ALTA is working in conjunction with the MBA on Uniform Master Closing Instructions. But ALTA makes no mention of the initiative on its web site, and the MBA has removed the draft from its site. What is that all about?
Having read the MBA draft of Feb 2006, I was VERY concerned about the liability and unreasonable demands the MBA was trying to push onto closers and title companies. For example:
Uniform Closing Instructions Draft by Mortgage Bankers Assoc. Feb 26, 2006
• 32 pages of General Closing Instructions
• 6 pages of Specific Loan Instructions
• 78 Specific Requirements and Indemnities from Closing Agents
• Significant new liability for closing agents
Settlement Agent must immediately contact Lender and postpone Closing or Disbursement of the Loan until Settlement Agent receives permission to proceed if:
o The Property has been conveyed within 6 months preceding Closing
o The new Loan represents an increase of over 25% of a previous Security Instrument recorded in that same time period.
o If any real estate sales commissions are excessive for the market area.
I think many of the draft items are unreasonable! I’d love to hear what YOU know about the Uniform Closing Instructions. It feels like a cover-up to me…
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03.14.07
Posted in Education, Mortgage Problems at 10:21 am by Jeanne
Freddie Mac, the major secondary mortgage market investor announced that it is working closely with customers in the primary market to fight predatory lending and foreclosures. In so doing, it says it has developed higher underwriting standards. Its recent changes to fight predatory lending include:
• FHLMC will refuse to do business with institutions that it identifies as engaging in predatory lending practices;
• FHLMC will refuse to invest in
o high-rate or high-fee mortgages as defined by the Home Ownership and Equity Protection Act of 1994 (HOEPA)
o sub-prime mortgages with prepayment penalty terms of more than three years
• FHLMC is also requiring its lenders to provide complete credit information about borrowers to all credit bureaus and reporting agencies.
• and encourages consumer education through programs such as CreditSmart, and Don’t Borrow Trouble, which are programs designed to help borrowers understand the mortgage origination process, housing finance options, and how to avoid abusive lending practices and foreclosures.
I don’t see this as fighting Predatory lending. I see it as an ad campaign for trying to look like they are making an effort. This is such a minimal effort – kind of like saying “okay, maybe we should meet the law”
I am NOT for Government intervention. But based on the loans appearing in the market, and the crazy predatory advertising I see, there have to be some changes! Many in the mortgage industry and the title industry have dropped their standards to all time lows. That costs all of us. I actually hope the Government will intervene. It seems to be the only way to keep foreclosures from continuing to skyrocket, Lenders and Title Companies from dropping standards to all-time lows. It seems that ethics and morality just don’t seem to matter if companies can make a bigger buck.
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03.12.07
Posted in Regulation of Insurers and Banks at 1:05 pm by Jeanne
Today, the Department of Commerces released a diagram of the structure of sham title operations, along with the full Settlement Agreement resulting in a half million dollar fine, and the closing of 35 Title Insuance Agencies. Detail is available online at
Dept Commerce Website
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03.09.07
Posted in Regulation of Insurers and Banks at 10:36 am by Jeanne
Minnesota Cracks Down on Cozy Ties between Title Firms, Real Estate Agents
“>Pioneer Press article
State Looks into Real estate Agent Referrals to Title Companies
AP Article
State Fines 3 Title Companies over Kickback Allegations
Star Tribune Article http://insurancenewsnet.com/article.asp?a=top_pc&neID=200703081317.3_1c8a001c45479d82
State probes relationships between Realtors, Title Companies
Associated Press
http://www.in-forum.com/ap/index.cfm?page=view&id=D8NO3RQO6
MN Dept of Commerce Cracks Down on Sham Title Insurance Affiliations
Source of Title
http://sourceoftitle.com/article.aspx?uniq=2398
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03.07.07
Posted in Regulation of Insurers and Banks at 4:23 pm by Jeanne
In a constantly changing climate under the Real Estate Settlement Procedures Act (RESPA,) the MN Department of Commerce has settled with First American Title over what were deemed as violations of the Federal RESPA Law. Although affiliated business arrangements are not prohibited under the Act, there are certain requirements that must be met in order for the affiliate to be a full fledged business, and not a sham business.
To read more on this see Inman’s MN DOC Article
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03.02.07
Posted in Mortgage Problems, Regulation of Insurers and Banks at 7:55 pm by Jeanne
RealtyTrac reported last week that the number of homes entering the foreclosure process increased by 19 percent in January, compared with December’s numbers. Compared with January 2006, the number of homes in the process is up 25 percent. In 2006, a total of 1.2 million homes entered the foreclosure process, 42 percent more than 2005.
There are a couple of key reasons for the uptick in foreclosures, said Rick Sharga, vice president of marketing at RealtyTrac, whose site also lists homes in the foreclosure process.
For one, a slower housing market has stretched out the time it takes for a home to sell, making it tougher for families who must sell to strike a deal in time to avoid the foreclosure process, he said. Also at play is the rise in interest rates on adjustable-rate mortgages, at times squeezing “people who have overextended themselves in the first place.”
For full article see MarketWatch
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