Posted as an article on Source of Title . Not sure how much interest SC will have in the stuff I write nowadays as a part of my duties at my home site; much of it will be related to the title insurance industry, and the rest will probably be mostly related to real estate in some fashion.   In this case, I think there could be some general interest because  1.) FHA's policy portfolio has exploded in the past 12-24 months as the agency has taken over the market for the "subprime" home buyer and the private market for no-money-down loans, option ARMs, NINJA loans and the like have evaporated, and 2.) FHA's financial position is in question as defaults on FHA insured mortgages have spiked, and there have been predictions of a bailout.

Lend America ceased operations earlier this week in the wake of a case brought against it documenting 40 cases of mortgage fraud involving FHA-backed loans, cases which likely only scratch the surface of the true scope of the fraud committed by the company.  The situation prompts the question: how is such widespread fraud possible to maintain for such a long period of time, especially when dealing with a federal agency?  A closer look at FHA's policies, and one might start to wonder why massive frauds like Lend America aren't more common.

Cross-posted from Source of Title

As I wrote about in my last post, "Debate over New York title insurance public option seems to miss the point ", a group of New York state legislators have proposed legislation to create a "public option" for title insurance.  These legislators have pointed to Iowa's Title Guaranty Program, a system of public land title insurance established by Iowa state law.

Unfortunately, there seems to be some confusion on the part of the New York legislators as to the nature of Iowa's land title laws.  In short, it appears that they have leaned too heavily on the vast online encyclopedia Wikipedia in their research of the issue.

Jeaz, nobody posts a fresh open thread for a couple days and look how testy things get!

Is this the thread where we will at long last discuss all the important topics?  Time will tell...

promoted by stinerman

Huge omnibus bills should be a LAST resort, never the first choice.
But for the Congress of today, whenever any big, multifaceted problem is encountered, the FIRST RESORT... is to create a legislative Swiss Army Knife to fix it.

It's not that Swiss Army Knife legislation has any great history of success. Remember how urgent it was to pass "comprehensive Immigration legislation"? Passing everything at once was such an urgent priority that they didn't pass a darn thing!

Another perfect example of Swiss Army Knife legislation is the Stimulus Bill (massive, hard-drive-filling, 647-page PDF ) as passed by the House. I mean, it's got it all-- the nail clippers, the file, the saw, the scissors, the can opener-- but is it a good can opener? do we need a can opener in this situation? and if so, why did we not try to pass a good, standalone can opener first?

--promoted by pico

Remember the big housing rescue bill that Congress passed and Bush signed int law in July?  That bill, The Housing and Economic Recovery Act of 2008 , contained a program called Hope for Homeowners that was supposed to keep 400,000 families out of foreclosure by allowing homeowners on the brink to refinance into a 30 year fixed rate FHA-insured loan for 90% of the current appraised value of the home. 

(promoted by John)

Crossposted from Source of Title

Leave it to the geniuses in Congress-- they already want to undo the smartest move they've made all year.

As part of The Housing and Economic Recovery Act of 2008 , signed into law by President Bush in June, Congress correctly banned all forms of seller-financed downpayment assistance for FHA-insured mortgages:

SEC. 2113. CASH INVESTMENT REQUIREMENT AND PROHIBITION OF SELLER-FUNDED DOWN PAYMENT ASSISTANCE 

•   (A) IN GENERAL- A mortgage insured under this section shall be executed by a mortgagor who shall have paid, in cash or its equivalent, on account of the property an amount equal to not less than 3.5 percent of the appraised value of the property or such larger amount as the Secretary may determine.
• (C) PROHIBITED SOURCES- In no case shall the funds required by subparagraph (A) consist, in whole or in part, of funds provided by any of the following parties before, during, or after closing of the property sale:
  (i) The seller or any other person or entity that financially benefits from the transaction.
  (ii) Any third party or entity that is reimbursed, directly or indirectly, by any of the parties described in clause (i).

This part of the law went into effect October 1st, discontinuing the use of these sham downpayments that have already cost taxpayers $4.6 billion in unexpected losses due to excess defaults on FHA-insured mortgages this year alone, according to HUD Secretary Brian Montgomery.

But to the surprise of approximately nobody, there is already a movement underway in Congress to abolish this common-sense return to a true 3% downpayment requirement for FHA-insured loans.  Representative Al Green (not the R&B singer, but the Democrat from Texas whose largest campaign donor is the National Association of Realtors ) has introduced a bill that would once again make seller-financed downpayment assistance legal for FHA loans.  In a legislative environment where Democrats and Republicans can't agree on the color of the sky, no less than 26 sponsors from both sides of the aisle are eager for the taxpayers to once again back mortgages with fake downpayments.

Promoted by Brendan

In my previous entry , I focused on the flawed GSE reform bill which passed the House in 2005. 

As it turns out, there was a much stronger bill coming out of the Senate Banking Committee at about the same time.  That bill , authored by Chuck Hagel (R-Nebraska), addressed many of the problems which eventually contributed to the downfall of Fannie Mae and Freddie Mac.

crossposted from Source of Title  

Ohio Congressman Michael Oxley (R-Mansfield) has an axe to grind with critics who blame Congress for failing to pass reforms that may have averted the need for this week's government takeover of mortgage giants Fannie Mae and Freddie Mac.  As Oxley sees it, he did his part by crafting a reform bill in 2005 and getting it passed by the House of Representatives. 

From the Financial Times :

[Oxley] fumes about the criticism of his House colleagues. “All the handwringing and bedwetting is going on without remembering how the House stepped up on this,” he says. “What did we get from the White House? We got a one-finger salute.”

The House bill, the 2005 Federal Housing Finance Reform Act, would have created a stronger regulator with new powers to increase capital at Fannie and Freddie, to limit their portfolios and to deal with the possibility of receivership.

...

“We missed a golden opportunity that would have avoided a lot of the problems we’re facing now, if we hadn’t had such a firm ideological position at the White House and the Treasury and the Fed,” Mr Oxley says.

But a look back at the efforts to pass that bill calls into question Oxley's version of events.

Promoted by Brendan

In a discussion with All-time QB a couple of weeks ago, I made the hypothesis that the domestic operations of U.S. corporations would have underperformed the market over the 2003-2007 period, because companies were getting increasing percentages of their profits from overseas during the period because of the declining dollar.

Today, I found the data, and as it turns out, I was off the mark. Offshore profits did not begin expanding as a percentage of total corporate profits when the dollar began falling.

Congresswoman "Mean" Jean Schmidt (R-OH), perhaps aware of a strong correlation between the vibration of her vocal cords and the likelihood of personal humiliation , has yet to ask one single question in hearings as a member of the Agriculture Committee in the 110th Congress, according to committe transcripts.

Promoted by Brendan -- very creative and surprisingly practical proposal

I'm not big on hand-wringing, so if global warming is going to cause changes such as a rising global sea level, I think we ought to be doing something other than stainding defiantly on our eroding beaches and crying out at the rising tides, "Take me!!!". Instead, I think we ought to be preparing to do something about it in an orderly and systematic way.

At the height of the housing bubble in 2005, Massachusetts Democrat Barney Frank gave a boilerplate speech on the House floor in support of a meaningless resolution to honor National Home Ownership Month. This speech, forgettable at the time, reveals much of what is wrong with our legislative process, and gives insight into the complacency that has found us at the precipice of the most severe economic crisis since the Great Depression.

Bumped by Brendan

For those of you who believe that the Bush economy has been generally a success, here's a couple facts about the Food Stamp program which might give you pause:

Food stamp expenditures are have skyrocked up 163% in Ohio in the past seven years. The number of recipients has nearly doubled during that period.

I have to wonder if Barack Obama's critics on the race issue have seen or read the entirety of his speech . The truth is, Obama clearly answered some of the questions that his critics here are still putting forth as if Obama had not addressed them at all.

For instance, one critic wondered why Obama would throw Louis Farrakhan under the bus and go easy on Rev. Wright:

promoted by John. We haven't really talked about Mr. Bush much lately.

George W. Bush is a decisive leader at times, I have to give him credit. When everything appears to be going his way, he has proven to be all too willing to take credit for the course of action on himself. For example, notice how he uses the word "we" in every single sentence of this paragraph from the infamous "Mission Accomplished" speech, wherein Bush plots a confident course into the future:

The Supreme Court today handed down the expected 5-3 decision in the Stoneridge vs. Scientific Atlanta case , denying investors the ability to seek and collect damages from third parties who participate in frauds with companies in which they are invested.

Crossposted on DailyKos

Cato Institute "energy expert" Jerry Taylor took on electric vehicles yesterday trying to prove that fuel costs for vehicles with electric engines is greater than fuel costs for gasoline engines. In the end, however, all Taylor proved was that there's not much "think" in his "tank"... 

Caterpillar, the undisputed heavyweight champion of construction equipment, released its Q3 earnings report today. And it may be the canary in the coal mine for the U.S. economy: