subprime mortgages - Articles

'The New Subprime' Mortgage: Risky Loans Emerge in Twist on Seller Financing

Mortgages resembling the kind of subprime loans that were blamed for the foreclosure crisis are creeping back into the market, leaving some experts and regulators alarmed. The loans give a relatively new twist to seller financing, putting homeownership within reach of borrowers who can't qualify for a conventional... Continue Reading »

Some Lose Homes Over as Little as $400

By Daniel Wagner WASHINGTON -- The elderly and other vulnerable homeowners are losing their homes because they owe as little as a few hundred dollars in back taxes, according to a report from a consumer group. Outdated state laws allow big banks and other investors to reap windfall profits by buying the houses for a... Continue Reading »

Report: Foreclosures Down, But Discounts Abound

LOS ANGELES -- Foreclosures made up a smaller slice of all U.S. homes sold in last year's third quarter, as banks delayed placing properties for sale and home sales slowed. Despite the decline, foreclosures still represented 20 percent of all homes sold in the July-September period -- about four times more than at the... Continue Reading »

States Mull $25 Billion Mortgage Settlement With Big Banks

WASHINGTON -- The nation's five largest mortgage lenders have agreed to overhaul their industry after deceptive foreclosure practices drove homeowners out of their homes, government officials said Monday. A draft settlement between the banks and U.S. states has been sent to state officials for review. Those who lost... Continue Reading »

State AG Sues Fannie and Freddie for Answers

SAN FRANCISCO -- California's attorney general filed lawsuits against mortgage giants Fannie Mae and Freddie Mac on Tuesday, demanding that the companies that own some 60 percent of the state's mortgages respond to questions in a state investigation. Attorney General Kamala Harris, whose office filed the lawsuits in San... Continue Reading »

Lawmakers Took Sweetheart Deals From Countrywide, Inquiry Finds

WASHINGTON -- Congressional investigators said Monday that four House members received VIP discounted loans from the former Countrywide Financial Corp., the lender whose subprime mortgages was largely responsible for the nation's foreclosure crisis. Rep. Darrell Issa (R-Calif.), chairman of the House Oversight and... Continue Reading »

SEC Sues Former Fannie Mae and Freddie Mac Execs

NEW YORK -- The Securities and Exchange Commission charged six former executives of Fannie Mae and Freddie Mac with securities fraud on Friday for misrepresenting their holdings of high-risk mortgage loans. The SEC is targeting three former executives of Freddie Mac, including chief executive officer Daniel Mudd, chief... Continue Reading »

House Flippers Inflated the Housing Bubble, Report Says

LAS VEGAS -- A new federal report shows that speculative real estate investors played a larger role than originally thought in driving the housing bubble that led to record foreclosures and sent economies plummeting in Nevada, California, Arizona, Florida and other states. Researchers with the Federal Reserve Bank of New... Continue Reading »

Foreclosure's Forgotten Victims: Tenants

By Matt Sledge MIAMI -- Sergio Palacios doesn't have the typical South Florida foreclosure story. He doesn't live in a McMansion in some suburban subdivision. He wasn't tricked into a mortgage he couldn't afford. In fact, he doesn't own a home at all. He's a tenant. But for the last five months and counting, Palacios,... Continue Reading »

Report: Minorities a Prime Target of High-Risk Mortgages

Blacks and Hispanics with credit scores higher than 660 received subprime and option adjustable-rate mortgages three times as often as white borrowers in similar financial standing between 2004 and 2008, according to a new study from the Center for Responsible Lending. The center studied the loan quality, borrower... Continue Reading »

Half of Prime Mortgages Could Go Upside Down

Half of borrowers with prime loans -- or loans made to borrowers with good credit and income -- will likely end up underwater anyway, according to a recent report. Already more than one-third of prime mortgage loan borrowers are underwater or owe more on their homes than they're worth and with home prices expected to... Continue Reading »

Foreclosure Fraud May Cost Big Banks $20 Billion

The nation's largest mortgage companies are operating on the assumption that they will have to pay as much as $20 billion to resolve claims of widespread foreclosure abuse, an amount four times what they originally had proposed, the top federal official overseeing the discussions told state officials Monday, according to... Continue Reading »

Could New Mortgage Broker Rules Hurt Homebuyers?

Could new mortgage regulations created to protect homebuyers under the Truth in Lending Act actually hurt more than it helps? The debate rages on, as mortgage brokers brace for what some argue will lead to less competition in the market, and therefore less credit for consumers. Charles Hugh Smith at our sister site,... Continue Reading »

The Rise and Fall of Fannie Mae: A Timeline

Fannie Mae and Freddie Mac were in the news a lot this year. For starters, there was the presidential summit in August, to solicit ideas for what to do with the ailing government-sponsored enterprises (GSEs for short). That was followed by midterm-election wrangling over whether to replace the struggling mortgage giants... Continue Reading »

Non-Prime Mortgages: Time to Lend Again?

I often hear people wonder aloud why banks won't loosen underwriting standards on home mortgages. I'm beginning to wonder the same thing. That's because I think it is time for lenders to start issuing mortgages to non-prime borrowers again, though not on the same shaky terms that triggered the housing crisis of 2008, of... Continue Reading »

Taxpayers May Owe $400 Billion for Bailout of Fannie and Freddie

So far $148 billion have been paid by the taxpayers to bail out Fannie and Freddie for single family mortgages gone bad, and as much as $400 billion more could still be needed. That's according to testimony by Edward DeMarco, acting director of the Federal Housing Finance Agency (FHFA), which is the conservator for Fannie... Continue Reading »

Mortgage Fraud Jumps 17 Percent

After a two year lull in response to the subprime mortgage crisis, lending fraud is back with a vengeance. A new report by research firm CoreLogic shows that mortgage fraud rose 17 percent last year. In comparison, fraud dropped a total of 57 percent in the two years following its peak in 2006. While the increase may seem... Continue Reading »

Yield Spread Premium Mortgage Fees Banned by Federal Reserve

The Federal Reserve has banned mortgage fees you probably weren't even aware of, but that were inflating your home-loan interest rate. On Monday, the Fed announced it was banning yield spread premiums, or YSPs. YSPs are essentially bonuses that lenders paid to mortgage brokers who steered them high-interest loans. The YSP... Continue Reading »

Elizabeth Warren's Real Estate Cred Makes Her Top Candidate for New Financial Bureau

Back in 2007, a relatively unknown Harvard Law professor named Elizabeth Warren warned that "for a growing number of families who are steered into...risky subprime in a creditor turns out to be costly." In the months after the housing crash, Warren became a very public beacon of reason -- it's no wonder... Continue Reading »

Wells Fargo Eliminates Subprime Mortgage Lending

Getting a subprime, or non-conforming mortgage, just got a lot harder. Wells Fargo, the third-largest bank in the U.S., announced it is closing a division devoted to issuing what they call "non-prime" mortgages, car loans, and credit-card loans. The bank will no longer issue subprime loans and is eliminating 3,800 related... Continue Reading »

Avoid Foreclosure: Do Your (Math) Homework

How are your math skills? Did you breeze through high school algebra and Econ 101, or struggle through the former and never get to the latter? It turns out, perhaps not surprisingly, that people who know more math and economics are less likely to default on their mortgages. Stephen Meier, an assistant professor at... Continue Reading »

California's Wacky Real Estate Follies

I guess it's good to be unique. But is California a little too unique for its own economic good? It seems the nation's real estate crisis is playing out a bit differently here than elsewhere. Maybe it's because we are so big? Or so populous? Or so broke? As they say in SoCal: "Whatever!" The fact is, the mortgage market... Continue Reading »

Subprime Lender Countrywide Mails Checks to Cheated Homeowners

The check's in the mail. The money promised to homeowners in Florida and 39 other states -- part of a 2008 settlement with a mortgage lender that came to symbolize the worst practices in the realm of subprime lending -- began to flow last week. Some 2,700 Florida residents who had lost their homes after Countrywide... Continue Reading »

The Incredible Shrinking Home-ownership Rate

Think time travel is impossible? Then explain how we've moved the clock back to 2003. The latest Census stats on homeownership show that just 67 percent of U.S. households own their home, down from a peak of 69 percent in 2007. That brings the share of homeowners back down to its level seven years ago. The nation... Continue Reading »

Consumer Protection? Read the Fine Print

After months of delay, on Friday the House of Representatives passed its "Wall Street Reform and Consumer Protection Act," 223-202. That fairly tight vote should tell you something: this reform is a 1279-page tissue of compromise. Let's leave the first part to others to dissect, for now, and focus on what "consumer... Continue Reading »

Who's Financing Bad Mortgages Now: Uncle Sam

When Fannie Mae, Freddie Mac and the Wall Street mortgage-backed securities machine all went the way of King Kong and Godzilla last year, that left just one home finance giant standing: the Government National Mortgage Association, or Ginnie Mae. Ginnie Mae bundles together mortgages into securities, and backs their sale... Continue Reading »

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