Jesus help us.

http://www.washingtontimes.com/news/2014...questiona/

Quote:In a fresh sign that lessons from the fiscal crisis six years ago haven’t been fully learned, the government-backed mortgage giants Fannie Mae and Freddie Mac bought billions of dollars of mortgages last year despite red flags about the nature of their appraisals, investigators disclosed Thursday.

The report from the Federal Housing Finance Agency inspector general provided a fresh warning that both mortgage giants, which had to be bailed out by taxpayers, are still engaged in risky practices in the aftermath of the housing market crisis that threw the entire economy into a tailspin in 2007-08.

Freddie and Fannie are currently supervised by FHFA as part of a taxpayer conservatorship, and the inspector general, the agency’s internal watchdog, has been asked to play the role of beat cop in ensuring both mortgage giants avoid risky behaviors.

Thursday’s report stressed the dangers of Fannie’s and Freddie’s failure to follow their own rules in ensuring appraisals are accurate and complete so the mortgage giants buy and accept loans based on the best possible estimates of the property values.

“Assessing the value of collateral securing mortgage loans is one of the pillars in making sound underwriting decisions,” the IG said.

The investigation found that both mortgage underwriters routinely allowed lenders to override automated computer warnings that were designed to guard against appraisal troubles. Specifically:

• Fannie Mae bought 56,000 home loans worth $13 billion despite warnings the files potentially did not conforming to its appraisal requirements.

• Freddie Mac bought 29,000 loans worth $6.7 billion despite questions about their appraised value.

The mortgage giants combined bought nearly $88 billion in loans when system logic errors in the computer system did not allow them to determine if the appraiser was properly licensed to assess the value of the properties.

MORE

On a personal note - I recently made a move on some land. I left a well known bank in horror after their mortgage officer convinced me of a total economic collapse coming this year. After picking up this new piece, my land would be slightly more valuable than my home, so they wouldn't touch the loan with a 10 foot pole.

Even with 50% cash in hand, $70k in home equity, and an excellent credit score this Warren Buffett owned bank was not interested. This loan officer went over the new laws with me which took almost an hour. Banks are taking 0 risk now, and turning down well qualified people who pose a 1% risk as instructed by Uncle Sam.

So, I liquidated and paid cash for the land. I'm now broke, but oh well.


The lesson of my story being - private banks have their hands tied by new mortgage laws that Freddy and Fannie are somehow ignoring. Private banks get a $1 million penalty for paperwork errors... obviously not F&F.

It seems the government is trying to take over the mortgage sector along with the healthcare. Communism? Of course not, right Lazytom?

Yet, I have paid mine on time every month for 7 years and they won't buy it. Go figure.

F&F are just addressing systemic white privilege.

Communism through crony Capitalism. Obama's legacy.

http://www.zerohedge.com/news/2014-02-14...s-subprime


More proof the elites are trying to Federalize the mortgage system and blame the banks.

Quote:So what is a bank [Wells Fargo] with a limited target audience for its primary product to do? Why expand the audience of course. And in a move that is very much overdue considering all the other deranged aspects of the centrally-planned New Normal, in which all the mistakes of the last credit bubble are being repeated one after another, Reuters now reports that the California bank "is tiptoeing back into subprime home loans again."Some subprime lending can help banks, but it may also help the economy. In September 2012, then Federal Reserve Chairman Ben Bernanke said housing had been the missing piston in the U.S. recovery.

A recent report from think tank the Urban Institute and Moody's Analytics argued that a full recovery in the housing market "will only happen if there is stronger demand from first-time homebuyers. And we will not see the demand needed among this group if access to mortgage credit remains as tight as it is today."

Quote:The straw on the camel's back: just like last time, when this subprime bubble bursts, it will once again drag down Fannie and Freddie. Because humans apparently have a genetic inability to recall any historical lessons older than five years.

FROM THE OP:

Quote:• Fannie Mae bought 56,000 home loans worth $13 billion despite warnings the files potentially did not conforming to its appraisal requirements.

• Freddie Mac bought 29,000 loans worth $6.7 billion despite questions about their appraised value.