Mortgage Fraud
If a rash of armed bank robberies swept across merica next year, and if in these robberies criminals absconded with $30 billion dollars, one may be certain that a public panic would ensue. The banking system would likely be changed forever. If thousands of armed thugs went rampaging across the nation forcing people out of their homes, into the streets, and then destroying the properties, leaving the occupants homeless -- well then one might be certain that fear would force our society to adapt its proceedings and its policies to fight this thuggish threat. Yet in many ways this is precisely the situation currently occurring with recent rise in mortgage fraud and abuse. Certainly, the criminals are armed with paperwork instead of shotguns, but the impact they are having is no less real. "uthorities have stated that fraud is involved in $60 billion in loans annually, resulting in $30…...
mlaACORN. 2004. Separate and Unequal: Predatory Lending in America.
Association of Community Organizations for Reform Now, February.
The way in which appraisals are based on the racial "desireability" of neighborhoods is an essay to itself.
That is, if the interest rates rise to the point that the monthly mortgage payment does not cover the interest due, any unpaid interest will be added to the loan balance, so the loan balance increases. However, one also has the option to pay the minimum monthly payment, or the fully amortized amount due.
The advantage of negatively amortizing loans is that one can control cash flow with a relatively stable payment, take advantage of low interest rates relative to the market at any given time, and pay back the money borrowed today at a depreciated value years from now because of natural inflation.
With most AMs, the interest rate can adjust every 6 months, once a year, every 3 years, or every 5 years. The interest rate on negatively amortized loans can adjust monthly. A loan with an adjustment period of 6 months is called a 6-month AM, with an…...
mlaReferences
Dudney, D., M.O. Peterson, and T. Zorn. "Mortgage Debt: The Good News." Journal of Financial Planning. September (2004): Article 7.
Goff, D.C., and D.R. Cox. "15-Year Versus 30-Year Mortgage: Which Is the Better Option?" Journal of Financial Planning. April (1998): Article 13.
Leggett, W.G. "A Few Questions to Ask Yourself before You Go Mortgage Shopping." Ont Dent 75.7 (1998): 41-3.
Leviton, R. "Reverse Mortgage Decision-Making." J. Aging Soc Policy 13.4 (2001): 1-16.
Mortgage Refinancing
There is a spurt of mortgage refinancing activity in recent times, thanks to interest rates remaining low and more or less consistent over a significant time horizon, appreciation of house prices and the easier refinancing options available in the market. This paper attempts to trace the various issues that influence the homeowner's decision to refinance. The pros and cons of 30-year mortgage vis-a-vis 15-year mortgage are discussed from different perspectives. From a homeowner's perspective the benefits and drawbacks of fixed-rate mortgage and adjustable-rate mortgage are analysed. This analysis is made with reference to basic financial principles - the self-interested behaviour, the principle of incremental benefits, risk-return trade-off and the time value of money. Refinancing makes available fresh capital to the homeowners giving them the opportunity to use it for spending or investing for returns.
Soft interest rates and increasing property prices in recent years have resulted in sharp rise in…...
mlaBibliography
Brady, P, Canner, G and Maki, D. (July 2000) 'The effects of recent mortgage refinancing', Federal Reserve Bulletin, pp 441-450
Financial Times. (March 3, 2004) 'UK house prices move up a gear despite, rate rises', Available from www.ukbiz.yahoo.com/040303/66/enk5x.html. Accessed on 03/30/2004
FRBSF (Federal Reserve Bank of San Francisco) (October 2003) Economic Letter - 'Mortgage Refinancing', Available from www.frbsf.org. Accessed on 03/30/2004
Hurst, E and Stafford, F (2002) - 'Home is Where the Equity is: Mortgage Refinancing and Household Consumption," in (ed) Krainer, J and Marquis, M - 'Mortgage Refinancing', 2003-29: FRBSF Economic Letter, October 2003
Even worse, the entire process of due diligence with respect to qualifying potential mortgagees carefully to avoid bad risks and of appraising property as accurately as possible dissolved by virtue of the immediate and routine transfer of mortgage instruments to third parties. ealtors began encouraging borrowers to misrepresent their financial information as well as the value of their intended property acquisitions, further inflating the so-called "housing bubble." More importantly, the inflated values were largely illusory rather than reflective of actual property values after diligent appraisal.
In addition to borrowers hoping to make a quick profit, many thousands of ordinary middle class Americans began to take advantage of the lapses that developed in the mortgage lending industry, not uncommonly with encouragement from realtors and lenders who deliberately failed to disclose the meaning of variable interest rates.
Eventually, the housing bubble burst when the supply of so many new housing developments outpaced demand for…...
mlaReferences
Gallegati, M., Greenwald, B., Richiardi, M., Stiglitz, J. (2008) the Asymmetric Effect of Diffusion Processes: Risk Sharing and Contagion; Global Economy Journal: Vol.
8, No. 3. Halbert, T., Ingulli, E. (2005) Law & Ethics in the Business Environment. Cincinnati: West Legal Studies. Kuttner, R. (2008) Debt Again: The Mortgage Crisis Has Surprising Roots That Go Back Decades. Why We Need to Rethink How We Buy Our Homes; the Boston Globe, August 19, 2007.
Mishkin F. (1999) Lessons from the Asian Financial Crisis; National Bureau of Economic Research, Working Paper No. 7102.
Reinhart, C., Rogoff, K. (2008). This Time is Different: A Panoramic View of Eight
Interest rates will be lowered reaching 3.4% in 2011 and borrowers won't have to begin repayments until they are making about $15,000." (Education Portal, 2007) Furthermore, the effectiveness of this bill is questioned because after 2011 interest rates will quickly climb on these loans again.
The work entitled; "Student Loan Lenders Creating a New Credit ubble" states of investors, that they are: "...clamoring to purchase bundled student loans. According to Moody's Economy.com, the market for private student loan-backed securities has seen an increase of 76% in the last year alone. The same thing happened in the sub-prime mortgage market during 2005 and 2006. There has since been a 'meltdown' in the industry. A total of 161 mortgage lenders have imploded since late 2006 (source: Mortgage Lender Implode-O-Meter), and more than 2 million mortgage borrowers are expected to default on their mortgage loans before the end of 2008." (Education Portal, 2007)…...
mlaBibliography
55 Colleges Under Investigation for Unethical Student Loan Practices (2007) Education Portal. 2 Nov. 2007. Online available at
Mortgage Crisis
The Mortgage Meltdown and the U.S. Economy
This paper reviews the subprime mortgage crisis and its effect on the U.S. economy.
The subprime mortgage crisis first gained the public's attention when a steep rise in home foreclosures occurred in 2006, and then spiraled out of control in 2007. At that time the mortgage meltdown triggered a national financial crisis that went global within the year. As a result, consumer spending dropped, the housing market plummeted, foreclosure numbers rocketed, and the stock market was shaken. All these problems have caused furious debate among consumers, bankers, and lawmakers as to the causes and the possible solutions.
There are various theories to explain what led to the mortgage crisis. Many experts and economists believe that the crisis happened because of a number of factors in which subprime lending played a significant role.
The current mortgage meltdown began with the bursting of the U.S. housing bubble that…...
mlaFinancial Crisis Inquiry Commission. Financial Crisis Inquiry Report (pp. xviii -- xxv). New York: Public Affairs, 2011.
Mhatre, Pratik. "Impact of Subprime Mortgage Meltdown on Location and Volume of Home Foreclosures." 2011. Urban Planning Blog. 15 April 2011.
Schoen, John. "Housing market stirs, but holds economy back." 2011. MSNBC.com. 15 April 2011. < http://www.msnbc.msn.com/id/41180293/ns/business-eye_on_the_economy/ >
Mortgage servicers are mandated with the responsibility of collecting payments from the mortgage borrower and transferring the payments to the loan owners (Consumer Financial Protection Bureau, 2016). When carrying out their responsibilities, mortgage servicers are required to comply with regulations established by the Consumer Financial Protection Bureau (CFPB) and federal consumer right law. Compliance with these regulations help in ensuring that mortgage servicers carry out their operations in a proper and legal manner. This paper examines compliance issues facing mortgage servicers in two different scenarios based on CFPB regulation and federal consumer right law.
Rachel’s Case
Based on the information provided in Rachel’s case, the major issue is the unavailability of information on payment history for her loan before it was transferred to LandX. The federal regulation that was violated in this scenario is regulation regarding transfers. In this case, Rachel’s loan was transferred to LandX as part of loan modification process.…...
Debt Consolidation Specialist: This individual, if qualified and reliable is likely to be found through referral of the school one is attending. One may also contact local government offices for referrals to a good debt consolidation specialist. Information may also be found on the Internet concerning debt consolidation services.
Grants: government funding that does not have to be repaid.
Scholarships: college funding that does not have to be repaid in the form of sports scholarships, scholarships won in beauty pageants and other contests and events, and scholarships presented by civic organizations and businesses to students to assist their funding for college.
ASA - the ederal Student Loan Application for ree College unding.
I. EDUCATION SPENDING and EDERAL INANCIAL AID mere generation later, "state spending on higher education is at a 25-year low and federal financial aid is increasingly debt-based, with only 38% in the form of grants." (Draut, 2008) Students do not receive assistance…...
mlaFederal Financial Aid Comparison 1980 and 2004
Source: Draut (2008)
Draut relates the fact that in decades past the term 'real job' "used to mean the first job you got after completing school. A real job allowed you to pay rent, buy groceries, make car payments, and have enough left over for spending money. A real job also came with fringe benefits such as health care and some type of retirement savings plan." (2008) This is however, no longer the reality as individuals in their twenties and thirties quickly realize. According to Draut, today's full-time worker incomes for those ages 25 to 34 are lower today than they were a generation ago, except among workers with college degrees." (2008) Today's young male workers who had only a high school education "earn 29% less than they did in 1974..." (Draut, 2008) partial explanation for the decreasing pay levels among workers today is the "disappearance of
The focus in the meeting between the parties to the dispute is the initiative of formulating a solution that is agreeable to both parties in lieu of their own individual desire in relation to their 'side' of the matter. Oftentimes coalitions are formed in the negotiations of a 'multi-party nature.
The mortgage company will be bound by certain Federal regulations in their handling of all types of disputes that would be affected by the Fair Debt Collection Practices Act. The contracts of most mortgage companies have specific stated provisions for arbitration and mediation which are both alternative dispute resolution methods. Mediation is the process of resolution with an impartial facilitator while Arbitration is a process in which the impartial party makes the decision which is binding on the parties. There are other aspects of legality in the ADR Process of a mortgage company. One of these is the "agency" or…...
mlaBibliography
Payson, Martin (1999) "Explore the Benefits of Alternative Resolution" Inc. May 1999 [Online] available at olicy/emp_d spute / 15222.ht m lInc.http://www.inc.com/articles/hr/emp_p
Mediate, Arbitrate of Litigate? (2002) Graziadio Business Report [Online] 2002 Summer Edition available at http://gbr.pepperdine.edu/023/arbitration.html .
Crane, Amy B. (2004) Arbitration Clauses: A Rights Giveaway [Online]available at Bankrate Website http://www.bankrate.com/brm/news/advice/20041117a1.asp?print=on
Dispute Resolution - Trade Practices and Fair Trading (2004) located at http://www.industry.gov.au/content/itrinternet/cmscontent.cfm?ObjectID=9018E848-D3A
Mortgage modification has been in practice in the United States in some form or another for years. The process entails modification of the terms of a mortgage separate from contract and original terms agreed to by both borrower and lender. The United States government has provided Americans with various versions of loan modification to help borrowers make payments via reduction of interest rates or principal balances. However, several recent news articles state the efforts of the American government have been in vain. The negative effects of mortgage modification have led to increasingly risky lending and removal of annual stress test fines for smaller banks leading to some banks' lending to borrowers with poor credit scores.
A New York Times article by Matthew Goldstein opens the discussion with exploration of the recent activity of Lone Star and Caliber concerning the mortgage market and issuing mortgages to borrowers that have poor or troubling…...
mlaReferences
Goldstein, M. (2016). Caliber Home Loans Embraces Borrowers With Spotty Credit. Nytimes.com. Retrieved 2 December 2016, from http://www.nytimes.com/2016/09/08/business/dealbook/caliber-home-loans-embraces-borrowers-with-spotty-credit.html
Mui, Y. & Merle, R. (2016). With Treasury candidate come possible conflicts. Washington Post. Retrieved 5 December 2016, from https://www.washingtonpost.com/business/economy/candidate-for-treasury-secretary-helped-run-bank-that-is-accused-of-bias/2016/11/17/6c7dab5e-acd6-11e6-a31b-4b6397e625d0_story.html?utm_term=.8f81f7813c4f
Tracy, R. & Ensign, R. (2016). Fed to Ease Stress Tests for Regional Banks. WSJ. Retrieved 5 December 2016, from http://www.wsj.com/articles/fed-to-ease-stress-tests-for-regional-banks-1474904701
mortgage default (Elul, Souleles and Chomsisenghept). This model suggests that home owners should only ever default if they have negative equity in their residence. If there is negative equity, then there would be an incentive for the borrower to walk away from the property. However this also does not consider subsidiary effects such as the impact upon the person's credit or the possibility that the property could regain equity in the medium or long-term. Furthermore, other researchers have also proposed that other factors such as being illiquid would also provide a motive for someone to default on their mortgage. A combination of these two variables would also act to amplify the incentive to voluntarily default; and of course being so illiquid that there is no possibility to make a mortgage payment virtually guarantees that a default will occur.
Although this research paper does not necessarily define its hypothesis directly, it…...
mlaWorks Cited
Elul, R., et al. "What "Triggers" Mortgage Default?" American Economic Review (2010): 490-494. Web.
My student loan payments of $609.07 are scheduled to begin May 1, 2009. I do not have the resources to make these payments and Chapter 7 Bankruptcy does not affect student loans.
Since I have been stretched beyond my financial capacity, I am now consistently behind in my mortgage payments and am not in a situation to rectify this problem. I am paid on the 15th and 30th of each month and because I am so overextended, I can only make my payment on the 30th of each month. Due to my now chronically late payments, I am now subject to $136.44 in late fees every month, which I can ill afford. I am facing eminent foreclosure if I am unable to change the terms of my mortgage.
I believe my circumstances make me an excellent candidate for the Hope for Homeowners Act. The Affordabilty vs. Value portion of this program…...
mlaREFERENCES
http://fha-refinance-program.com/hope-for-homeowners.html
http://portal.hud.gov/portal/page?_pageid=73,7601299&_dad=portal&_schema=PORTALhttp://www.hud.gov/fha/home080730.cfm
secondary mortgage market in detail. It puts light on the functioning of secondary mortgage market. It also discusses different tools that are used in this market and the benefits and drawbacks of this market. This paper also highlights some of the secondary mortgage market organizations and agencies. The evolution and growth of secondary mortgage market has also been discussed in this paper.
The secondary mortgage market is a place where the investors buy mortgage loans from the originators. An originator itself can be an investor also, by buying the loans provided by other originators. An originator can also sell these loans to an intermediary, who then converts these loans into securities and sell them to other people. It is a place where the mortgages originated in the primary mortgage market are resold. The already issued notes are also sold in the secondary mortgage market. These notes are purchased by the…...
mlaReferences:
Websites
Jean Cummings, & DeniseDiPasquale. (1997, June 4). A Primer on the Secondary Mortgage Market. Retrieved from http://www.cityresearch.com/pres/smm.pdf.
Michael J. Lee. (n.d.). Secondary Mortgage Markets: International Perspectives. Retrieved from http://www.housingfinance.org/uploads/Publicationsmanager/SecMort-2.pdf .
The Secondary Mortgage Market. Retrieved from http://www.google.com.pk/url?sa=t&rct=j&q=role%20of%20secondary%20mortgage%20market&source=web&cd=16&ved=0CDwQFjAFOAo&url=http%3A%2F%2Fwww2.cob.ilstu.edu%2Fjwtrefz%2FFIL360%2FJSECMTGM.DOC&ei=Lr5lUOyKNc23hAf03IHoBw&usg=AFQjCNFFdYFh4QW78TZvyORDUy6JckieZA
The term "adjustable-rate mortgage" describes any mortgage with an interest rate and payments that adjust according to some formula agreed upon by the borrower and lender. ARMs have been generally available to borrowers for about three decades on prime mortgages, but variants have been common to subprime mortgages over the past 10 years. The traditional ARM linked the mortgage's interest rate to the LIOR plus several percentage points." (Utt,2008)
Alt -- a Mortgages. Sometimes referred to as a "low-doc" mortgage, an Alt -- a mortgage is structured like the other mortgages described in this section but is made available only to prime borrowers or those with FICO scores above 660. However, these prime borrowers were required to offer only limited documentation on their qualifications, so many may not have been as "prime" as they represented themselves to be, as subsequent default rates indicate." (Utt, 2008)
Extremely Low- or No-Down-Payment Mortgages. As…...
mlaBibliography
Utt, Ronald D. (2008) the Subprime Mortgage Market Collapse: A Primer on the Causes and Possible Solutions. Backgrounder 2127 the Heritage Foundation. Online available at http://www.heritage.org/research/economy/bg2127.cfm
The Subprime Mortgage Market (2008) National and Twelfth District Developments. Federal Reserve Bank of San Francisco. Online available at http://www.frbsf.org/publications/federalreserve/annual/2007/subprime.pdf
Chomsisengphet, S. And Pennington-Cross, a. (2006) the Evolution of the Subprime Mortgage Market. Federal Reserve Bank of St. Louis (2001) Online available at> http://research.stlouisfed.org/publications/review/06/01/ChomPennCross.pdf
This would be only natural for central bankers, as wealth effects may be a very relevant factor in determining fluctuations in aggregate demand. Studies on wealth effects have been conducted in recent years, also in the ank of Italy, making use of household surveys. For a given level of net worth, the wealth effect may be defined as the extent to which household consumption changes in response to a change in asset prices relative to the general consumer price level. Conceptually, this is no different from the old Pigou effect, but while that worked through changes in consumer prices that reduced the "value" of money balances in real terms, we now have asset prices rather than consumer prices as the main factor. While consumer prices may be relatively stable, asset prices could move substantially, and the wealth effect could actually be a destabilizing rather than, as was once thought,…...
mlaBibliography
Deaton, Angus (2005) Franco Modigliani and the Life Cycle Theory of Consumption. Research Program in Development Studies and Center for Health and Wellbeing. Princeton University. Online available at http://www.princeton.edu/~deaton/downloads/romelecture.pdf
Fessler, David (2008) How Reverse Mortgages Could Help Fund Your Retirement. Contrarian Profits. 24 Oct 2008. online available at http://www.contrarianprofits.com/articles/how-reverse-mortgages-could-fund-your-retirement/6947
Hugh, Edward (2008) Have We Seen 'Peak' Italian Retail Sales? Europe EconoMonitor 3 Sept 2008. Online available at http://www.rgemonitor.com/euro-monitor/253471/have_we_seen_peak_italian_retail_sales
Le Goff, Philippe (2003) the Reverse Mortgage: A Solution to Retirement Funding? Economics Division. 14 Feb 2003. Parliamentary Research Branch. Online available at http://dsp-psd.pwgsc.gc.ca/Collection-R/LoPBdP/PRB-e/PRB0259-e.pdf
The 2008 financial crisis had a significant and widespread impact on global economies and banking systems. Some of the key impacts include:
1. Economic recession: The crisis led to a global economic recession as financial markets collapsed and lending froze, leading to a sharp decline in GDP growth and widespread job losses.
2. Banking system failures: Many banks around the world collapsed or required government bailouts to survive, leading to a crisis of confidence in the banking sector. This also led to increased government regulation of the banking sector to prevent future crises.
3. Stock market crash: The crisis caused stock markets to....
The Profound Impact of the 2008 Financial Crisis on Global Economies and Banking Systems
The 2008 financial crisis, widely acknowledged as the most severe financial upheaval since the Great Depression, left an indelible mark on global economies and banking systems. The crisis's origins can be traced to various factors, including the subprime mortgage debacle, excessive risk-taking by financial institutions, and inadequate regulatory oversight. Its effects, however, reverberated far beyond the financial sector, affecting businesses, households, and governments worldwide.
Impact on Global Economies
The crisis triggered a deep and prolonged recession across the globe. Economic growth plummeted, unemployment soared to alarming levels, and international....
1. Job loss or reduction in income: A sudden loss of income can make it difficult for homeowners to keep up with their mortgage payments.
2. Excessive debt: If homeowners have other debts that they are struggling to pay off, they may not have enough money to make their mortgage payments.
3. Medical emergencies: Unexpected medical expenses can put a strain on a homeowner's finances, making it difficult for them to keep up with their mortgage payments.
4. Divorce: A divorce can result in one or both parties being unable to afford the mortgage on their own, leading to a foreclosure.
5. Adjustable rate....
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now