by ilene - December 10th, 2009 8:44 am
Mish sums it up well: "Government is the mortgage lender of last resort, the job provider of last resort, and the auto manufacturer of last resort, places government has no business being at all. Government spending has gone wild and all we have to show for it is trillions of dollars worth of debt, 10% unemployment, troops in 150 countries, two wars, and 35 million on food stamps." – Ilene
Courtesy of Mish
The Center for Public Integrity and The Washington Post collaborated nicely on a report detailing problems at Ginnie Mae.
Please consider Mortgage agency’s growth gives fuel to risky lenders.
The trouble signs surrounding Lend America had been building for years. A top executive was convicted of mortgage fraud but still helped run the company. Home loans made by its headquarters were defaulting at an extremely high rate. Federal prosecutors alleged in a civil suit that the company falsified loan documents and committed fraud.
Yet despite these red flags the Government National Mortgage Association, known as Ginnie Mae, authorized the firm to bundle its mortgages into securities and sell them to investors around the world — all backed by U.S. taxpayer money.
Lend America is hardly the only lender with a troubled record that Ginnie Mae has endorsed. The agency has provided taxpayer backing to at least 36 other mortgage companies with a history of reckless lending, fines or other sanctions by state and federal regulators or civil lawsuits, according to an analysis of government records, court documents and statistics in a HUD database.
"Ginnie is like an accelerant to a fire," said Anthony Sanders, professor of real estate finance at George Mason University.
HUD Inspector General Kenneth Donohue said Ginnie Mae is too accommodating of problem lenders, adding that the agency has put its highest priority on ensuring that money is pumped into the mortgage market.
"Ginnie Mae is in the business of trying to bring in business," he said.
Lenders with spotty histories and poor financial health have sold nearly $100 billion in loans packaged into Ginnie Mae-guaranteed securities in the past two years, according to calculations based on data provided by Inside Mortgage Finance, a trade publication.
Sixteen mortgage lenders endorsed by Ginnie Mae have been cited by various federal regulators for unsafe banking practices, insufficient capital or
…
Tags: Employment, Fannie Mae, Freddie Mac, Ginnie Mae, government, Housing Market, Mortgage lenders
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by ilene - August 27th, 2009 1:23 am
Courtesy of Jesse’s Café Américain
Welfare for Wall Street is just another phase of the ‘trickle down’ approach that seems to be so popular with the financerati.
If "Cash for Clunkers" had involved subsidized loans for cars administered by the banks it would have been touted as the greatest thing since sliced bread by the coporate media and mainstream infomercials, instead of being slammed on a daily basis as a troubled, pointless giveaway program.
So now we have a new "Cash for Criminals" program from the finance friendly folks at the tarnished Treasury and finagling Fed as outlined in the story below, this time for those overpriced housing loans sold to underpaid, over-indebted consumers.
The housing market needs to clear, the losses need to be realized, and the debt must be written down or taken into default by the banks.
The banks do not wish to foreclose because this will force them to start marking down the toxic assets they still hold on their books.
The Obama Administration is doing a fairly good imitation of Japan Inc.
Washington Post
Subprime Lenders Getting U.S. Subsidies, Report Says
By Renae Merle
Wednesday, August 26, 2009
Many of the lenders eligible to receive billions of dollars from the government’s massive foreclosure prevention program helped fuel the housing crisis by issuing risky subprime loans, according to a report to be issued Wednesday by the Center for Public Integrity.
Under the $75 billion program, called Making Home Affordable, lenders are eligible for taxpayer subsidies to lower the mortgage payments of distressed borrowers. Of the top 25 participants in the program, at least 21 specialized in servicing or originating subprime loans, according to the center, a nonprofit investigative reporting group funded largely by charitable foundations.
Much "of this money is going directly to the same financial institutions that helped create the sub-prime mortgage mess in the first place," Bill Buzenberg, executive director of the center, said in a statement.
For example, J.P. Morgan Chase, Wells Fargo and Countrywide, which has been bought by Bank of America, are eligible to receive billions of dollars under the program,…
The report comes as the Obama administration is prodding lenders to do more to help borrowers. Less than 10 percent of delinquent borrowers eligible for assistance through Make Home Affordable have received…
Tags: Cash for Criminals, Countrywide, foreclosure prevention programs, JP Morgan Chase, Making Home Affordable, Mortgage lenders, Obama, subprime debacle, Wells Fargo
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site