Haunted homeowners finally got some good news this week when the White House announced the re-launching of its 2009 Home Affordable Refinance Program (HARP). Rising from the dead, the revitalized program features some key costume changes designed to revive the program and help underwater mortgage owners take advantage of today’s low mortgage rates to lower their monthly payments and reduce their loan amount.
Homeowners Horrors
Out of the 4 million mortgages in Florida, about 1.25 million are underwater. Although HARP was released two years ago to help 5 million struggling homeowners nationwide, only a very small percentage were able to take advantage of it. The revisions in the program focus on increasing the number of eligible “not so scary” loans.
But Oppenheim Law’s Florida Real Estate Attorney and Legal Blogger Roy Oppenheim calls the revised program too little too late.
“The reality is the government says it’s going to help a million people but ten million people need help and they are not getting help. So many people have had to default and destroy their credit because the government never really came to bail out the homeowners. Instead, they sold out the homeowners and bailed out the banks,” Oppenheim told WSVN TV.
The New Program Requirements: Trick or Treat?
Homeowners are required to be current on their loans and cannot have missed any payments in the previous six-month period. Unfortunately, this means many struggling homeowners still will not qualify for relief under the program.
Other requirements include:
* Loans must be backed by Fannie Mae or Freddy Mac
* Continue to make mortgage payments on time
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Archive for October, 2011
Revamped HARP Program: Trick or Treat for Underwater Florida Homeowners
Sunday, October 30th, 2011Banks Go Straight to Jail? Defrauding Investors out of Millions gets Chance Card
Friday, October 28th, 2011
Banks continue to draw the lucky Get out of Jail Free card! South Florida Law Blog’sForeclosure Defense Attorney Roy Oppenheim asks: If the government is truly interested in reducing mortgage fraud, why not go after the ones who cause a larger impact on the economy and affect homeowners on a national scale? It seems the banks get the chance card and the little guys go directly to jail.
Last week Citigroup agreed to pay $285 million in a settlement agreement with the Securities and Exchange Commission (S.E.C.). Citigroup to Pay $285 Million to Settle S.E.C. Complaint – NYTimes.com. That’s pocket change for a giant bank that has made over $3.8 billion in profits just last quarter. The defrauded investors contributed to a $ 1 billion portfolio stuffed with high risk mortgage investments. What these unsuspecting investors didn’t know is that Citigroup bet against these investments in hopes that they would lose value. Not only did Citigroup bet against the portfolio, but it was responsible for selecting the mortgage investments that would make up the portfolio.
With all the questionable bank practices that have come to light since the housing market bubble bursts, the S.E.C. has done little to reprimand giants such as Citibank. Not only has the S.E.C or the Justice Department failed to go after the banks, they also have done little to prosecute banking executives who were no doubt involved in criminal activity stemming from the banking crisis. While a bank can’t be sent to jail, the high ranking executives directly responsible for these unethical banking practices should not be able to escape criminal liability. And yet, while the powerful banks and senior executives appear to be above the law, the government has not hesitated in going after individuals who lack powerful political influence on Washington.
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Law Review Executive Summary: Black Magic of Securitized Trusts
Tuesday, October 25th, 2011
Deconstructing the Black Magic of Securitized Trusts by Roy D. Oppenheim and Jacquelyn K. Trask-Rahn gives an in-depth analysis of the process of securitizing mortgages and how it has gone awry. The article begins with a focus on the rise of subprime lending, the impact that subprime loans, such as “interest-only” and “negative amortization,” had on the American Dream of homeownership, and how “securitizing” these loans led to a false sense of security for homeowners and investors during the housing bubble.
Throughout the early 2000s, subprime lending increased exponentially, driven by the unregulated and unbridled avarice of large banking institutions, mortgage brokers, and federal policy pushing homeownership at any and all costs. However, when the bubble burst, the aftershocks were more destructive than anyone could ever have imagined, leaving the housing market devastated.
During this time, securitization became a popular method of bundling these mortgages and selling off different portions of them to investors based on their credit worthiness. Using credit-rating agencies, each level of bundled mortgages were rated and sold to investors, generally at highly inflated ratings equivalent to those of U.S. Treasury bonds. Shockingly, many of these mortgages were those given to under qualified homeowners with no cognizable source of income, leaving the securitized mortgage industry on the brink of disaster.
The failure of securitization occurred when large banking institutions, gorging on the thousands of loans being created and sold to them, failed to follow the steps required to properly securitize them. The majority of securitized loans were placed in trusts which appointed a large banking institution as trustee. Each trust has a Pooling and Servicing Agreement which outlines the operation of the trust, the duties and obligations of the trustee, as well as the steps required for a trustee in order to properly transfer the mortgages into the trust. Many of these steps are designed and implemented to ensure that the trust maintains a favorable tax status as a Real Estate Mortgage Investment Conduit (REMIC) in order to provide bankruptcy protecting and to avoid entity-level taxation. These procedures allow the trusts to operate as static entities existing simply to hold the mortgages. However, in order to maintain this status and save hundreds of billions of dollars in taxes, the trust cannot acquire mortgages after the trust closes.
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Weston Title & Escrow Blog Reports on Florida Real Estate News
Sunday, October 23rd, 2011
South Florida Law Blog and Oppenheim Law welcome an addition to our Florida real estate news feeds: the Weston Title & Escrow news blog.
Designed and curated with the Florida real estate community of buyers, sellers and real estate professional in mind, the Weston Title & Escrow Blog brings you a weekly digest of Florida real estate news via charts, stats and stories.
A sample of recent headlines found on the Weston Title & Escrow news blog:
Florida Real Estate Battle of the Sexes: Men List More, Women List Pricier
How Tweets & Status Updates May Factor Into Credit Decisions
Roy Oppenheim’s Foreclosure Chart of the Week
Florida Real Estate Agents Getting Full Commission Despite Housing Lag
Weston Title Reports of Mortgage Fraud Increases by 88%
A little background on Weston Title & Escrow:
Weston Title & Escrow is a trusted Florida title company providing Florida real estate closings, title insurance, title searches, and escrow services since 1994.
Offering the timeliest, strategic, and educated guidance in Florida real estate transactions whether you are a real estate investor, lender, Realtor, first time buyer, refinancing, persevering through a short sale, negotiating through a foreclosure or closing on your dream home, now is the time to make a move before home prices and rates go up.
Weston Title & Escrow provides:
- Florida Escrow Deposit Services
- Florida Home Refinancing Services
- Florida Mortgage Modification
- Florida Real Estate Closings
- Florida Title Insurance & Title Search
Names you can trust
Providing Florida real estate closings, title insurance, title searches, and escrow services since 1994, Weston Title is owned by real estate attorneys Roy Oppenheim and Ellen Pilelsky, the founding partners of Oppenheim Law.
