Mitch Goldstein | Coach Mitch | March 10th, 2011HUD Facing $11 Million in Losses Thanks to Non-Compliant FHA Loans
Bryon Ellis Real Estate Letter By Carole VanSickle March 10th 2011
In a recent review of more than 250 loans from 15 lenders, HUD’s Office of the Inspector General (OIG) determined that 49 percent of those loans were non-compliant with FHA guidelines and were likely to cost the FHA insurance fund $11 million or more.
OIG recommended that HUD bring suit against each lender who violated lending regulations by misstating borrower income, employment history, assets, liabilities, credit history or investments, and reported that such suits could result in “affirmative civil enforcement actions of more than $23 million.” The report also criticizes HUD’s failure to “pursue civil remedies when lenders falsely certified to using due diligence in approving FHA loans”.
OIG suggests that a formal process be instated for reviewing all claims paid on defaulted mortgages – HUD responded that it took such steps in 2010, but this may have been a little late given the rampant underwriting issues that are plaguing nearly all lenders today.
See the entire article at: http://realestate.bryanellis.com/4100/hud-facing-11-million-in-losses-thanks-to-non-compliant-fha-loans/
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Coach Mitch’s REFLECTIONS
“The more things change, the more things stay the same.”
We cry out for change. Our leaders constantly say we need change. We just voted a president into office based on the slogan, “Change you can believe in.” Well, where is it?
“The rich get richer, while the poor get poorer.”
As far as I can see it’s the same ol’ same ol’. “Them’s that got’s, gets.” It’s SOP – Standard Operating Procedure. And we are SOL – Sh_t Out of Luck.
“Banks need to make loans.”
When underwriting standards are ignored by bank management, loan reps know that the barn door is open and anything goes.
Don’t forget, in our bizarro world fractional reserve lending system, a bank writes a loan for $100K and then gets credit for 10 times that amount, i.e. $1MM. It is in the banks interest to lend. The more they lend, the more they are able to lend, and the more the fee income they earn.
However, banks are lending made up money, electronic credits, not actual cash from deposits. That is how the money supply is being ratcheted up, making rampant inflation inevitable.
“Make hay while the sun shines.”
Back in 2000 we endured the Savings and Loan debacle. I witnessed it firsthand. Loan programs fell away daily until there was no more lending being done. The banks tightened up underwriting for a period of time and then, when the direct heat was off, they started up again.
Bank representatives would say how to package the loan so that it would pass underwriting. Of course, they got their instructions from their bank bosses, who had received the go-ahead from Wall St.
The recent bank finance debacle, where we all were scammed out of our future, but no one went to jail, is just “more of the same; same crap, just a different day.” And you thought Obama was going to be different! BTW, I don’t see the newly elected Republicans all yelling to jail any bankers; so the old saying, “There ain’t a dimes worth of difference between the parties.” apparently still holds true.
“It takes money to make money.”
The “K” Street madness continues unabated. Lobbyists continue to bribe congress. Just yesterday it was reported that there were 152 events for promoting congressional campaign contributions. The political money machine must be fed.
“Stupid is as stupid does.”
For those thinking that the Supreme Court is not part of the problem, let me refresh your memory. Two scourges of humanity were pronounced fit for humanity by the court: pornography and campaign contributions. The miscreant political class is alive and well.
“A rose, is a rose, is a rose.”
By outlawing speech that defames or by punishing perjury, we defend society from speech that does actual harm. Imagine how much better society would be if pornography or sexuality fed by pornography were not prevalent, in everything. Imagine how much better society would be if it were not legal to bribe political leaders. It is like saying that AIDS is bad but leprosy and cancer are OK; it makes no sense. Bring back the 1950’s with it’s clear moral choices and its self-imposed behavioral restrictions.
“Those who fail to look at history are doomed to repeat it.”
Crazy is defined as: doing the same thing repeatedly and expecting a different result. Just like our society, are you making the same bad choices, over and over again? Are you expecting a different result even though you are doing nothing to change?
“Today is the first day of the rest of your life.”
Do something different. Take a chance. “Break out of the mold.” “Conquer fear.” “Get out of the rut.” Overcome!
Coach Mitch’s “Ridiculously Simple System…” is a system proven to find tax delinquents, “the most motivated of motivated sellers.”
By only speaking to highly motivated sellers, you increase your likelihood of finding one who will “give” his property to you. Why pay retail when you can pay fire sale? Why pay more than you have too?
See Coach Mitch’s “Ridiculously Simple System…” ™ for details.
“Take the bull by the horns.”
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