Posts Tagged ‘Freddie Mac’

Two-Faced Freddie Mac, The Fiscal Cliff and the Obamacare Real Estate Tax, 2012’s Top Headlines Continued

Friday, December 28th, 2012

Happy New Year

Continuing our recap of our most popular blogs from 2012…

#5 — Robosigning Settlement Proves Sky Was Falling! Chicken Little Was Right!

Yesterday’s robosigning settlement that all but one state ultimately signed off on, was far from perfect.

Let’s make that perfectly clear.

Depending on what you have read, you might be outraged, you might be relieved, you might be overjoyed. And the target of your wrath or sympathy might depend on your own personal perspective.

But make no mistake about it, yesterday was a day of reckoning, for me, and much more importantly, for the people I represent.

Read the full post here.

#4 — What I Tell Clients Who Receive A Foreclosure Notice

As a real estate attorney, I’ve had plenty of prospective clients come to my office after being served with a foreclosure notice. It is safe to say they are usually not in a good mood; they are usually scared.

And the truth is I would be too.Foreclosure can be a scary process for even the most legally astute homeowner.

When a homeowner walks into my office for that first time, there is one question that comes up almost every time. It’s a basic yet very essential question to anyone under the threat of foreclosure…

What do I do next?

Read the full post here.

#3 — Freddie Mac — Playing Two-Face to the American Homeowner?

Aaron Eckhart might have played Two-Face in the last Batman movie, but Freddie Mac seems to have settled into the role these days.

Non-profit ProPublica and National Public Radio allege that Freddie Mac, which was set up to make home loans more accessible, was in fact betting against homeowners.
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Why The Housing Bubble Burst: Explaining Economic Homicide

Thursday, December 13th, 2012

Roy Oppenheim’s commentary was originally published on Yahoo! Homes and is being republished on South Florida Law Blog with their permission.

Housing BubbleIt is easy to call Wall Street a villain and lay the blame for the housing collapse at their doorstep, and I did just that in one of my recent blogs, where I likened the banks’ conduct during the housing collapse to “economic homicide.”

My Rabbi asked me to further explain the concept of foreseeability, a notion I touched on in the blog, as it relates back to the banks and the real estate bubble.

So allow me to explain, but first, please grant me a few more hyperboles.

If you pour gasoline on a fire, then you’d have to know that fire would accelerate. Otherwise people would think you are a fool.

Likewise as people often refer to the real estate market as a bubble, I like to think of the banks and their agents as people who filled that bubble with helium.

At some point they’d have to know it would burst. It was absolutely foreseeable. So how did they “fill the bubble?”

First, they completely disregarded underwriting guidelines. Bank of America, Wells Fargo, and most of the big banks took shortcuts, playing fast and loose with guidelines they once held sacred.

They signed off on these loans without considering their underwriting obligations, without checking whether the borrower was creditworthy, or even checking tax returns. More loans went out, and into the securitization machine, but of course the quality of those securitized trusts ended up resembling something your dog might leave behind on the sidewalk.
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Strategic Defaulters Are Public Enemy #1 Again (Unless They’re on Wall Street)

Tuesday, October 23rd, 2012

Roy Oppenheim’s commentary was originally published on Yahoo! Homesand is being republished on South Florida Law Blog with their permission.

Deficiency judgments are probably the last thing any homeowner under threat of foreclosure wants to think about.

For the uninitiated, a deficiencyis when the proceeds from a foreclosure sale, or a short sale, don’t cover the balance of the mortgage loan. In a recourse state, such as Florida or 39 other states, it is legal for the lender to go after the homeowner for that deficiency when a deficiency judgement is awarded.

My experience has been that if a bank actually does bother to seek a deficiency judgement, there is a good chance it can either be severely reduced or negotiated, especially if you have an attorney.

But it looks like the pendulum is starting to swing in the other direction, if you have a loan backed by Fannie Mae or Freddie Mac.

A report just released by the inspector generalfor the Federal Housing Finance Agency (FHFA), which oversees both of the government-sponsored enterprises, suggests Fannie and Freddie should be much more aggressive in recovering deficiency judgments, in order to mitigate their losses.

The FHFA stresses their report is not an “encouragement to aggressively pursue borrowers who do not have the ability to pay their mortgages.” (Of course you can’t squeeze blood from a turnip.) Instead it centers on an old and familiar target: the strategic defaulter.

Now the inspector general’s office is just doing their job. They were asked to perform an audit, and they did. But there is a just a whiff of hypocrisy that is both arrogant and outrageous.
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Machiavelli, Alive and Well, In Illinois?

Friday, September 14th, 2012

 

Niccolò Machiavelli

A statue Niccolò Machiavelli sitting outside of the Uffizi, in Florence, Italy. Macchiavelli was a philospher, humanist and writer.

Since I started the South Florida Law Blog following the 2008 economic meltdown, I have made no secret of the fact that I am extremely critical of what can best be characterized as “America’s new crony capitalism.”

Crony capitalism occurs where certain industries have gained undue influence in the political process and thus have curried favor unjustly from the government. This undue influence distorts the market in favor of those that can afford favorable treatment (in other words, not you or me), and also creates a system where these industries are permitted to grow unfettered and unregulated, leading to practices such as the “Wall Street Rule or “Too Big To Fail.”

Typically the type of influence that these corporations are able to obtain falls within the executive and legislative branches of the government. Whether we like it or not our system does allow for a certain amount of lobbying as well as campaign contributions in order to obtain such influence.

But not surprisingly, the ease with how these companies are able to obtain such influence has created a highly uneven playing field between the average tax payer and that of large multi-billion dollar industries, particularly banks.

But despite all of this crony capitalism, under no circumstances did I ever expect to see the banking industry blatantly attempt to try and corrupt the judicial branch which is typically the most neutral of the three branches of government when it comes to political influence and crony capitalism. Yet, in another “Too Big To Fail” twist, the Illinois Bankers Association (the “IBA”) has done just that.
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