REAL ESTATE: OBAMA STRIKES AGAIN

Dodd Frank Real Estate Basics, What It Is and How To Protect Yourself

Published July 10, 2014 | By ListedBY

Chris Dodd and Barney Frank have long since retired, but the namesake legislation they crafted four  years ago is about to unleash sweeping changes in the mortgage and real estate markets.
 

According to real estate attorney Shari Olefson, who also wrote the book Financial Fresh Start, the changes took effect January 1st and few people even know about them.
 

“It’s not a bad idea to have less risky loans,” she says in the attached video. “The problem is folks are just not really ready for this. Banks have been preparing for this for a while, but folks on the street are just not aware of it.”

What she’s talking about is the coming dawn of the qualified or ‘’safe harbor’’ mortgage era. 

“Here’s the problem. In order for banks to benefit from a ‘safe harbor’ against lawsuits by borrowers, the loans they issue now under Dodd Frank have to be considered qualified mortgages,” Olefson says.

Specifically, she says that means debt-to-income ratio cannot exceed 43%, points and costs cannot exceed 3% and banks must independently verify that a borrower “has the ability to repay” via eight different criteria.

While the all sounds logical and well intentioned, Olefson foresees some problems.

“Here’s the catch, about 20% of people who have mortgages right now, will not be able to get qualified mortgages.  So what’s going to happen to those people is they’re going to have to go elsewhere for the new mortgage loans, or banks will have to price them more expensively because they don’t have these protections against lawsuits.”

What that means, she says, is that “it’s starting to sound like we may be seeing what used to be sub-prime loans again,” as well as the reality that more people will be pushed into the rental market.

Again, while this may be news to Mom and Pop, institutional money has been pouring into residential, single-family homes for years, and Wall Street is now poised to collect rent-checks until the real estate market rebounds enough for a suitable return on investment. As she frames it, private industry is stepping in exactly as Uncle Sam is easing out of the mortgage business.

Olefson also points out that all of this comes at a time when homeownership levels are already falling, from a peak of 69% to just 63% today. It’s a trend she fears could carry huge societal ramifications given the fact that 75% of American wealth has historically come from home ownership, or as she calls it, “essentially a forced savings account.”

Mess with that safety net, and it’s easy to see why she says the ripple effects of unintended consequences could easily outweigh the benefits of a four year old law.

http://blog.listedby.com/knowledge-centre/dodd-frank-real-estate-basics-what-it-is-and-how-to-protect-yourself/

The dirty little secret about Homeowners Associations they don't want you to find out

CNBC:

Apparently this is not at all uncommon these days, as struggling borrowers let the dues slide, thinking it's more important to throw all their cash into their mortgage payments.

Thirty-four states allow for judicial foreclosures by HOAs, although the rules and redemption periods differ. The redemption period is the amount of time that a homeowner has to pay up all the dues and fees after the HOA has officially taken title to the home.

Texas has a 180 day redemption period.

Florida's is just 10 days. . .

Homeowners Associations: The New Foreclosure

QE3 – Pay Attention If You Are in the Real Estate Market

The Daily Bell:

The Fed is now where mortgages go to die. Thousands of mortgages on homes that do not exist or on homes that have more than one "first" mortgage are now going to the Fed to disappear. Thousands of multifamily and commercial mortgages will be bought up as well. As this happens, trillions of dollars that have been amassed offshore will be free to come back into the US to buy up and reposition land, farmland, residential and commercial real estate and other tangibles.

With documents shredded, criminal liabilities extinguished and financial institutions made whole, funds can return without fear of seizure.

QE3 proves beyond any shadow of a doubt that the extent of the fraud was as bad as I said it was. You can count up the bailouts and QE1, QE2, QE3 the numbers speak for themselves. The fraud was indeed in the many trillions of dollars. It was intentional. It was a plan. [Emphasis mine.]

READ MORE

The Daily Bell is pleased to introduce our readers to editorials from Catherine Austin Fitts. Catherine is the publisher of The Solari Report, and managing member of Solari Investment Advisory Services, LLC and Sea Lane Advisory, LLC. Catherine served as managing director and member of the board of directors of the Wall Street investment bank Dillon, Read & Co. Inc., as Assistant Secretary of Housing and Federal Housing Commissioner at the United States Department of Housing and Urban Development in the first Bush Administration and was the president of Hamilton Securities Group, Inc. She graduated from the University of Pennsylvania (BA), the Wharton School (MBA) and studied Mandarin Chinese at the Chinese University of Hong Kong.

HAT TIP: Before It's News

Gov't policies promoted systematic loosening of underwriting standards to promote affordable housing, which then contributed to housing bubble, mortgage meltdown and financial crisis

Conclusion: The major cause of the financial crisis in the United States was the collapse of housing and mortgage markets resulting from an accumulation of an unprecedented number of weak and risky Non-Traditional Mortgages (NTMs). These NTMs began to default en masse beginning in 2006, triggering the collapse of the worldwide market for mortgage-backed securities and in turn triggering the instability and insolvency of financial institutions that we call the financial crisis. Government policies forced a systematic industry-wide loosening of underwriting standards in an effort to promote affordable housing, compounded by moral hazard spread by Fannie and Freddie."

Here are six facts about the government's role in the crisis...

End Gov't. Subsidy of 30-Year Fixed-Rate Mortgages

Bottom Line: It's not that the 30-year fixed-rate mortgage is inherently bad, but it's the government support and subsidy of those mortgages that has had distorted mortgage and housing markets, and contributed to two serious banking and financial crises. We shouldn't end the 30-year fixed-rate mortgage, but we should end the government support and subsidy of those mortgages.

Read more

FYI: This is one of Mark Levin's favorite bloggers...

A clever little mortgage scheme in Europe foiled

Hungary has approved a ban on mortgage lending in foreign currencies. Talk about closing the barn door after the horse is gone.

The government had no problem with consumers borrowing in Swiss francs at low interest rates when CHF/HUF was at 165. Now that it is at 215, they think its a bad idea…

Hungary announced a package of reforms a short while ago, including a bank tax. A new "precautionary" deal with the IMF is their aim, the economy minister says.

The same problem extends across central Europe where homeowners "cleverly" borrowed in Swiss to avoid high local rates.

Those homeowners are now choking, helping drive the franc ever-higher. An ugly situation that never should have been allowed to happen.

NOW Hungary bans FX mortgage lending

The man who screwed America

After Gobi, Barney Frank become involved in another questionable -- and possibly criminally tainted -- relationship with a man called Herb Moses. Moses, whom Frank called his "spouse," was a high-level executive at Fannie Mae from 1991 until 1998. Dubbed a "mortgage guru" by the National Mortgage News, Moses boasted that he helped develop "many of Fannie Mae's affordable housing and home improvement lending programs." It was, of course, these kinds of programs that ultimately led to the collapse of the subprime mortgage market that wiped out trillions dollars from the economy and produced the economic turmoil that we now face. Even though there were those warning against the precarious nature of the enterprise, Barney Frank -- whose committee oversees Fannie Mae and Freddie Mac -- kept resisting reforms and besmirching those voicing concerns.

When the Bush administration proposed that oversight of Fannie and Freddie be transferred to the Treasury Department, Frank strongly opposed the plan, claiming:

"These two entities... are not facing any kind of financial crisis... The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

Frank continued to claim almost until the day of the collapse that the two mortgage giants were financially sound. If we lived in a sane world, Barney Frank would be compelled to testify about his culpability in the current crisis and what role his romantic involvement with Herb Moses -- as well as the campaign contributions he received from Fannie and Freddie -- played in his shilling for these two moribund institutions.

Commenting on his shenanigans, Jeff Jacoby observed that under normal circumstances Frank's questionable relationships could have well landed him in prison. Voters in his very liberal congressional district, however, have awarded him with a string of easy re-elections.

Read the whole thing: Who Is Barney Frank?