The New York Times says the regulator for Fannie Mae and Freddie Mac plans to seek billions to reimburse the two mortgage giants for losses in the 2008 financial crisis.
WOW, more finger pointing and no one wanting to take responsibility for their actions...
http://money.msn.com/market-news/post.aspx?post=a7ae879b-f1f9-4856-...
The suits will argue the banks, which assembled the mortgages and marketed them as securities to investors, failed to perform the due diligence required under the nation's securities laws and missed evidence that borrowers' incomes were inflated or falsified.
Really? Wouldn't it also be Fannie and Freddies responsibility to perform their due diligence? Any good business person would check facts, verify and re verify everything that was important to them. Did Fannie and Freddie actually take the banks at their word? Dumb, dumb, dumb.
I am waiting to see when we as realtors or as taxpayers start filing lawsuits against Fannie and Freddie for the money that they continually lose by not approving short sales and moving on to foreclosure.
As much as I think the banks are also at fault, Fannie is the investor on 80 % of the loans out there and Fannie does just as good of a job burning up taxpayer money and someone needs to step in an stop them.
How about a show of hands, how many agents here lost a GOOD short sale with a GOOD offer to Fannie Mae and Fannie Mae in turn sold the home for less after the foreclosure?
Replies to This Discussion
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Permalink Reply by Jeff Payne on
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Harry, we might run out of bandwidth if everyone raises their hand :) I am sure that there is an attorney out there that would love to take on this case.
Harry Clay said:Hello-ooo! *raises hand*
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Permalink Reply by Richard on
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I didn't lose a short sale or foreclosure, but as I have said before in my earlier e-mails, there is plenty of blame to go around. I am just tired of seeing and hearing about the honest, hardworking people getting the shaft.
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Permalink Reply by Susan Meehan on
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When I bought my current home in 2003, I looked at securing loans from my small local bank vs. a new company called Countrywide. Chose to go with Countrywide cuz their rates were better and they were SO easy to work with. Just a phone call, give 'em my SS# for a quick credit check while I waited on the line, and away we go, no forms to fill out prior to instant approval ... whereas the small local bank shipped me a large packet of forms to fill out & sign, and I had to give them proof of my stated financials - what a bother! The nice guy I talked with at Countrywide told me they had just been granted a boatload of government funds and were under the gun to get as many home loans out there as quickly as they could . . . he tried hard to coax me to borrow 3 times as much, make his job a little easier. Folks at Fannie & Freddie are foolish to be betting that nobody will be able to turn up a shred of their old correspondence to all those bad banks 5 & 6 years ago.
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Thanks for sharing Susan. That's a good insight into what has happened.
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Permalink Reply by Beverly Cibulsky on -
Jeff,,,
You are always so on top of things!!
This news has bothered me for a couple of days now! Why? I am not sure if this is good, bad, ridiculous!
How is this going to effect short sales? Good, maybe they will go faster to recoup as much money as possible quickly?
Bad, maybe things will come to a grinding hault!? Or slowed down considerably to make sure every dime that can is being recovered?
Ridiculous, as really... what will be accomplished? Where will the money come from?
I actually escalated a file to Fannie and used the scenario that needless money is being wasted, as the Servicer was just delaying everything!!! This was a small shortage as well (aprx $20,000), they could have cut their losses by about $3,000 in taxes and insurance carrying costs. Not much, but take the same situation and multiply it by say 10,000 similar cases! And really, I think these are extremely conservative examples!
I didnt loose this one to foreclosure (heck for what is was worth, I reminded them that the property had an in-ground pool, a huge liability if they became the owners and reminded them that Florida was entering Hurricane Season!)
I still tend to blame the "Servicers" who started this to begin with, and will probably never get out of it!
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Permalink Reply by Bryant Tutas on
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in the newsletter today
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Permalink Reply by Michael Schneider on
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Jeff,
I actually think the FHFA lawsuit is appropriate.
Is Fannie/Freddie rightfully due compensation for purchasing $1T in bad loans? No, probably not, IMHO.
But, that's not quite the right question to ask, I think. The question is: Should the FHFA sue these major players in the origination and secondary sales market?
I think the answer to this is probably yes, for two reasons:
1. They can sue, and they may be able to get a settlement. Why should the Government play by different rules from the Investors led by Pimco, Blackrock, and the NY Fed?
2. But, more importantly, there is probably a fixed amount of money that can be extracted from the Originators and secondary-market sellers of RE secured loans. Really does not matter whether there are 10 such lawsuits or 210. The total amount extracted will be more-or-less the same IMHO. So, the FHFA must sue, in order to maintain their position with the other lawsuits. I'd rather see this money go to the FHFA than to Pimco and Blackrock, frankly.
In short, they must sue, because others are.
Hey, Jeff, look at it like this: This way, we can afford to bail out BofA again.
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Harry and Michael,
You guys are right on top of this! This just didn't happen overnight. We saw this coming with here in AZ, NV and CA for some time. I'm sure FLA was the same way. It was out of hand. It seems they couldn't get the building up fast enough for people who obviously couldn't or didn't qualify in some cases. I'm a longtime resident in my neighborhood but, I had 2 people that moved in next to me on groceries stocker's salaries after recently getting promotions. This seemed a little strange because the neighborhood normally housed business professionals. However, the new neighbors seemed like good people and I was happy for them and they very proud of it. Then in late 08 when the $#!t started hitting the fan and after lots of complaining about the economy, the trucks start pulling out the middle of the night to eventual silence. The rest is history. But it seems like nobody is saying much about the years prior when this was rampant.
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Permalink Reply by Glenn Batten on
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I believe these suits name the top officers of these institutions as defendants. It is time these "decision makers" be held personally accountable for their actions.
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Permalink Reply by Maria Evans on
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Jeff, at this point those banks have no leverage with us. I believe next step they will reduce principal on loans that are current.
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