Category Archives: Real Estate

Real Estate

Deutsche Bank AG Sued for Fraud by the Justice Department

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Deutsche Bank chief executive Josef Ackermann
Deutsche Bank chief executive Josef Ackermann

The United States has filed a civil mortgage fraud lawsuit against Deutsche Bank AG and its wholly owned subsidiary, MortgageIT Inc.  The government’s complaint seeks damages and civil penalties under the False Claims Act for repeated false certifications made to the U.S.

According to the government’s complaint filed May 3, 2011 in Manhattan federal court: Between 1999 and 2009, MortgageIT was an approved direct endorsement lender, and endorsed more than 39,000 mortgages for FHA insurance, totaling more than $5 billion in underlying principal obligations. These mortgages were highly marketable for resale to investors because they were insured by the full faith and credit of the United States. MortgageIT and Deutsche Bank, which acquired MortgageIT in January 2007, made substantial profits through the resale of these endorsed FHA-insured mortgages.

Stated  in the complaint, MortgageIT repeatedly made false certifications to HUD to obtain approval of mortgages that MortgageIT underwriters wrongfully endorsed for FHA insurance.  These mortgages were not eligible for FHA insurance under HUD rules.  Notwithstanding the mortgages’ ineligibility, underwriters at MortgageIT endorsed the mortgages by falsely certifying that they had conducted the due diligence required by HUD rules when, in fact, they had not.  By endorsing ineligible mortgages and falsely certifying compliance with HUD rules, MortgageIT wrongfully obtained approval of these ineligible mortgages for FHA insurance, thereby putting millions of FHA dollars at risk.

To date, the Federal Housing Administration (FHA) has paid insurance claims on more than 3,100 mortgages, totaling $386 million, for mortgages endorsed by MortgageIT. Total claims against Deutsche Bank AG could cost well over $1.15 billion dollars.

The government’s complaint seeks treble damages and penalties under the False Claims Act for the insurance claims already paid by HUD for mortgages wrongfully endorsed by MortgageIT through the false statements of Deutsche Bank and MortgageIT.  In addition, the United States seeks compensatory and punitive damages under the common law theories of breach of fiduciary duty, gross negligence, negligence and indemnification for the insurance claims that HUD expects to pay in the future for mortgages wrongfully endorsed by MortgageIT as a result of Deutsche Bank’s and MortgageIT’s false statements

My take on this is, it’s about time the banks paid for the mess that they have gotten us into. Like I’ve said many times, its not the mortgage brokers or the real estate agents who set the lending standards, it was the banks. I’ve talked to many people who were in the lending side of the banks. They were told to just make the loan, we don’t care if they can pay it back. What do you think?

Source The United States Department of Justice

For all your real estate needs, call or email:

John J. O’Dell
Real Estate Broker
O’Dell Realty
(530) 263-1091
jodell@nevadacounty.com

DRE#00669941

Real Estate

Careful When You Show Your Home to Potential Buyers, Don’t Become A Crime Victim!


Safety should always be a top concern for both real estate agents and home sellers.  While holding an open house and allowing potential home buyers to tour the property is an effective means of selling a home, home sellers should be aware of the risks.

  • While most criminals will seek small items and anything they can fit into their pockets, sometimes these “buyers” are actually scoping the home for a future burglary.
  • According to a safety expert who has worked with the NATIONAL ASSOCIATION OF REALTORS® and other groups, first and foremost, people should trust their instincts, so if someone or something is making one uncomfortable, be extra alert and extremely careful.
  • If a potential buyer or unknown agent arrives at the house unexpectedly, the homeowner should tell him to call their agent to schedule an appointment.
  • Before allowing anyone to enter the house, all lights should be turned on and all blinds, shades, and curtains opened.  Homes are safer for showing when someone outside can see inside.
  • In advance of an open house, homeowners should remove all valuables, including jewelry, artwork, and electronic equipment.
  • Additionally, money, mail, bank statements, credit cards and keys should never be kept lying around, or even in a drawer with easy access.
  • Prescription drugs should be kept in locked cabinets, to prevent anyone from stealing them or using the information on the label.
  • Professional burglars often linger in rooms, looking for items they can dispose of quickly.  They also search for ways to get in and out, scouting possible escape routes and checking for security devices.  Couples up to no good often split up so one can check out the house and its belongings, while the other keeps the agent and/or seller occupied.

Read the full story

For all your real estate needs, call or email:

John J. O’Dell
Real Estate Broker
O’Dell Realty
(530) 263-1091
jodell@nevadacounty.com

DRE# 00996641

 

Real Estate

Miss a Mortgage Payment, Your Credit Score is Drastically Affected

 

Missed mortgage payments, short sales, and foreclosures can all drastically bring down a credit score.

Lenders use credit scores to measure how well a person handles debt. Credit scores range from 300 to 850, with 650 and below considered poor credit. A mortgage makes up a big part of a person’s credit score and often is the most important part of a person’s credit profile.

And just missing a single mortgage payment by 30 days can ruin a credit score, say FICO and VantageScore, which have studied the impact mortgages can have on credit scores. For borrowers, that can be nearly as destructive as a foreclosure to a credit score, according to the companies.

On the other hand, loan modifications, which is when lenders approve new loan terms, have a “very, very minimal” impact to credit scores, possibly dropping the borrower’s score by 10 or 15 points, Sarah Davies, the senior vice president for analytics at VantageScore, told The New York Times.

A good credit score is important not just for financing home purchases, but employers increasingly check credit as well as landlords when seeking rentals. Also, poor credit scores can also mean higher costs on car loans and credit cards.

How a Credit Score Is Affected

FICO evaluated three various scenarios of mortgage holders — a borrower with a great credit score (780), a borrower with good credit (720), and a poor credit borrower (680) — in a study it conducted last month. Here’s the impact FICO found:

? 30 days late on a mortgage payment: The 780 credit score borrower has her credit score fall to 670-690. The 720 credit score borrower has his fall to 630-650. The 680 credit score borrower falls to 600-620.
? Short sale, deed in lieu of foreclosure, or settlement, assuming the balance has been wiped out: The 780 credit score borrower falls to 655-675; the 720 credit score falls to 605-625; and the 680 credit score drops to 610-630.
? Foreclosure, or short sale with a deficiency balance owed: The 780 credit score drops to 620-640; the 720 credit score falls to 570-590; and the 680 credit score decreases to 575-595.

Source: “Fallout From a Poor Credit Score,” The New York Times (April 24, 2011)

 

For all your real estate needs, call or email

John J. O’Dell
Real Estate Broker
O’Dell Realty
(530) 263-1091

Real Estate

Appraisal, Are You Getting Your Money’s Worth?

Photo courtesy of Red Clay Media

Despite Federal Reserve regulations that took effect April 1 requiring lenders to pay appraisers fair fees, many appraisers say they are still offered $200 to $250 by lenders for work billed to consumers at $450 or more.

  • Last year’s Dodd-Frank financial reform law mandated that appraisers receive fees that are “customary and reasonable” for their local market areas, yet the Appraisal Institute says that is not happening.
  • While a portion of the difference between what consumers are billed and appraisers are paid goes to the management companies that connect lenders with local appraisers and take a percentage for their services, often times lenders make a profit from the appraisal as well.
  • Home buyers should care about this for several reasons.  For starters, accurate appraisals are a concern for consumers, as appraisals can be deal-breakers if the appraisal comes in too low. When performed competently, appraisals can be accurate measures of the equity in a home when the homeowner refinances or seeks a second mortgage.
  • Most experienced independent appraisers refuse to work for $200 to $250 because they can’t pay their overhead at that rate, leading less-experienced appraisers, who sometimes travel long distances and are unfamiliar with the area, to conduct the appraisal, which can lead to inaccurate, appraisals.
  • The Appraisal Institute is seeking to persuade the Federal Reserve to tighten its regulations, which created a loophole for lenders and management companies that wanted to keep paying low fees to appraisers.  In the meantime, consumers should demand transparency, asking how the appraisal fee was distributed and why.

Read the full story

For all your real estate needs call or email

John J. O’Dell
Real Estate Broker
O’Dell Realty
(530) 263-1091
Email jodell@nevadacounty.com

DRE# 00669941

Real Estate

Why Do Banks Call Them Short Sales? They Should Be Called Long Sales!

By John J. O’Dell

I wonder why banks call short sales, short sales?  Of course, what they mean by a short sale is that they are agreeing to sell a house for less than the mortgage they hold on the property. After that, short sale means you will complete a sale within a period of three months to one year, maybe.

I’ve had two short sales going since November 2010.  Last week, one of them gave the go ahead to proceed. Now remember, my buyer has been waiting about five months. So they can wait as long as they want, but they want the buyer to close the deal within 30 days.  Of course, they don’t sign the purchase contract, they just tell you go for it! They send you a one sided contract with their very own terms. You ever notice banks make their own rules?

My other “short sale”, started at the same time. Well, seems like the bank lost all the paper work. So they said they were not going to go ahead with the sale.

It’s a good thing my client has a very lady like scream. So the short sale is back on again.

The process is simple, (not) you submit tons of paper work.  Then they assign a negotiator who emails you and tells you to upload all the documents you have already uploaded for the second time. (like I said, that’s the same  documents that I uploaded in November and they lost)

So I don’t know how long I will have to wait for this second short sale, but I’ll let you know, in the meantime don’t hold your breath. I want you around to read my blogs.

 

John is a real estate broker
General Contractor and civil engineer
You may reach John at Email jodell@nevadacounty.com

Real Estate

Confidence in Value of Homeownership Persists Through Bust

Source: LA Times

Despite the decline in home prices, 81 percent of U.S. adults believe buying a home is the best long-term investment a person can make, according to a national survey by the Pew Research Center.

  • Home ownership topped the list of long-term financial goals for Americans, according to the study.  Respondents rated home ownership, as well as living comfortably in retirement, as more important than sending children to college or leaving offspring an inheritance.
  • “Owning a home is really a part of the American dream, and that is just part of the American psyche and something that people aspire to,” according to one of the study’s authors.
  • Although the vast majority of adults surveyed are in favor of owning a home, the public’s faith in real estate has somewhat declined compared with the last time a comparable survey asked people about the wisdom of investing in real estate.  In the Pew Research Center survey, 37 percent of respondents said they “strongly agree” that home ownership is the best investment a person can make, while 44 percent said they “somewhat agree.”  The same question was asked by a CBS News/New York Times survey in 1981, and at that time, 49 percent “strongly agreed,” and 35 percent “somewhat agreed.”
  • While home prices have entered a renewed decline after showing some improvements last year, many economists believe that the worst of the housing crisis is probably over, which could help explain the resiliency in Americans’ optimism.
  • Homeowners in the survey were more positive about the financial wisdom of owning a home than were renters.  Among renters, the desire for homeownership remains strong.  According to the survey’s findings, 24 percent of renters surveyed said they rent out of choice and 81 percent said they would like to buy.

Read the full story

For all your real estate needs, call or email:

John J. O’Dell
Real Estate Broker
O’Dell Realty
(530) 263-1091
Email jodell@nevadacounty.com

Real Estate

60 Minutes: Mortgage Paperwork Mess, Bank Servicers Committing Fraud

I had heard about this “robo” signing. But here exposed by 60 Minutes is the story of how they did it. Its simply amazing that the banks and Wall Street created the recession that we are in, but they continue their shoddy practice without regulation even today! Banks can’t find their paper work, so why not fake it and sign anybodies name on the fake paper work. If you or I did that, we would be in jail in a heartbeat, but not the banks. The banks create whatever they need to suit their purpose.

How about punishment, do you think any of the CEO’s of any of these banks are going to jail? What do you think?

For all your real estate needs call or write:

John J. O’Dell
Real Estate Broker
O’Dell Realty
(530) 263-1091
Email John at jodell@nevadacounty.com

Real Estate

Mortgage Aid Offered to Those Who Cashed Out Equity


The California Housing Finance Agency announced this week that people who cashed out equity on their home now are eligible for three of the four “Keep Your Home California” programs.

  • Keep Your Home California is a state-run program funded with $2 billion from the U.S. Treasury’s Hardest Hit Fund.  It is designed to help low- and moderate-income people who are unemployed or owe more than their home is worth pay their mortgage.
  • There are four individual programs that fall under Keep Your Home California.  Eligible homeowners can get up to $50,000 in assistance from one or more of the four programs combined.
  • Under the new rules, people who took equity out of their homes will be eligible for the unemployment mortgage assistance, mortgage reinstatement assistance, and transition assistance programs if they meet all the other program requirements.  Homeowners who cashed out equity will continue to be ineligible for the principal reduction program.
  • When the program first started, homeowners who had tapped the equity in their homes were ineligible for the programs.  CalHFA decided to include these homeowners due to the large number of homeowners who were being turned away for assistance.
  • Under the program revisions, homeowners who originated mortgages after Jan. 1, 2009 also are eligible for the same three programs.  Originally, these borrowers were excluded because they also are excluded under the federal Home Affordable Modification Program, so CalHFA wanted to be consistent with HAMP.
  • To qualify for any of the four programs, homeowners must fall below certain income limits, must be living in the home, and cannot own a second home, among other criteria.  For additional requirements, visit www.keepyourhomecalifornia.org/eligibility.htm.

Read the full story

For all your real estate needs call or email:

John J. O’Dell
Real Estate Broker
O’Dell Realty
(530) 263-1091
Email John jodell@nevadacounty.com

DRE# 00669941

Real Estate

Mansion in Las Vegas Price Cut, From $60 million to $25 Million

Here’s a deal for you, great price reduction, more then 50%, now’s the time to buy. A Las Vegas mansion owned by Brunei Prince that was once valued at $60 Million and is now on sale for less than half that amount. Hurry, its only $25 million.

Source: Wall Street Journal

For all your real estate needs, call or email:

John J. O’Dell
Real Estate Broker
O’Dell Realty
(530) 263-1091
Email John at jodell@nevadacounty.com

DRE# 00669941