CENTURY 21 has decided to stop all TV advertising and move those advertisin
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RISMEDIA, January 12, 2009-Century 21 Real Estate LLC announced last week that it is transitioning its television advertising to additional online advertising, including media spend in the following categories in 2009: display, search engine marketing and partnerships with real estate listing websites. “Century 21 Real Estate continues to take a leadership position in the industry,” said Tom Kunz, president and chief executive officer of Century 21 Real Estate. “We were the first national real estate franchise on television and now we continue our forward-looking market leadership as we enhance our online advertising. In 2008, leads resulting from online advertising increased by over 237% and our cost per lead decreased by 62%, year over year. We are confident that increased online advertising will benefit our brokers, agents and most importantly, the consumer.” |
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New model for credit scores, FICO 08, touts sharper analysis
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By Kayce T. Ataiyero | Tribune reporter - January 30, 2009
The company that operates the nation's major credit scoring system has retooled how it calculates those numbers, allowing lenders to better predict the likelihood of default and penalizing consumers who are chronically late making payments.
The new model rolled out by Fair Isaac Corp., called FICO 08, is similar to previous versions in that it uses the same scoring range of 300 to 850 and incorporates familiar credit history factors in its calculation. But Fair Isaac said FICO 08 offers sharper analysis, allowing lenders to home in on indicators that predict default, particularly for consumers with negative information on their reports.
Fair Isaac said Thursday that TransUnion is the first credit reporting agency to offer the score to lenders. Equifax spokesman Tim Klein said his agency will offer the new score in coming months. An Experian representative said the firm could not comment because of pending litigation with Fair Isaac.
Careen Foster, director of scoring product management at Fair Isaac, said a key difference with the new credit score is that it penalizes people who have a history of habitually late payments. But consumers who have had isolated financial troubles might see improvements in their scores because the new model will cut them some slack.
The change is a routine update of the scoring model and not a response to the current economic crisis, she said.
"The good news is that a lot of things that lenders are struggling with are being addressed. The things that we are looking at are going to help lenders make better decisions on consumers that have blemished credit histories," Foster said. "That's good not only for lenders, but for consumers too."
Jim Carr, chief operating officer of the National Community Reinvestment Coalition, doesn't favor tweaking credit scores. He said the foreclosure surge arose from lenders giving borrowers more credit than their scores indicated they could afford, for the sake of increased profits. "We … have to be very cautious in this environment of not penalizing the consumers by saying that people with less than 700 credit scores were bad risks," he said.
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Foreign investors may help local real estate market
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BY ROCHELLE BRODER-SINGER
Special to The Miami Herald
Some of the biggest commercial real estate deals of 2008 came from outside the United States: Nakheel Hotels, managed by the Dubai government, bought 50 percent of the Fontainebleau Miami Beach hotel for $375 million. A subsidiary of Japanese investment firm Sumitomo paid $260 million for the Miami Center office tower. Hong Kong-based Swire Properties, which developed most of Brickell Key, paid $41.3 million for 5.5 vacant acres just off Brickell Avenue. And a Mexican company affiliated with the Jose Cuervo Group became partners in 396 Alhambra, a planned $130 million office project in Coral Gables. LOOKING ABROAD As a credit crunch dries up U.S. capital for deals, many in the industry expect international investors to again be major players throughout 2009. They often have the stomach -- and the cash -- to buy now even as vacancies rise and values drop. ''They're not as squeamish as some of the investors in the United States,'' said real estate broker William H. Kerdyk Jr., president and CEO of Kerdyk Real Estate in Coral Gables. Foreign buyers often work with longer time frames and have more cash than domestic groups. They have clear confidence in South Florida's long-term economic strength. And for some, this country is still the safest place to move flight capital. Grace He, vice president of China-based U.S. Capital Holdings, agrees. Her company is developing the mixed-use 321 North on the site of the Fashion Mall in Plantation. A private equity investor, U.S. Capital saw the mixed-use project as an opportunity to transfer its experience in urban development in China to the United States. Even as the economy makes it hesitant about which piece of the project to begin now, the company is patient about its investment. ''The commitment that we're putting here for this project is a long one,'' he said. Florida, he said, is not that popular with Asian developers because they aren't as familiar with it as other major U.S. centers. But her company saw it as ''a place where things can be done'' and where development moves quickly. She added that 321 North's ''city within a city'' concept is the norm in China. Few domestic companies would have invested so much money in what may be the most uncertain economic environment they've ever encountered. But international firms have a different perception of risk. Latin American investors, for example, have dealt with such economic events as government appropriation in Venezuela, regular threats from guerrillas and drug gangs in Colombia and the total collapse of the banking sector and massive devaluations in Argentina. They know that in the United States, by contrast, contracts will be respected and the rule of law upheld. ''They're very accustomed to dealing with very volatile, high-risk environments,'' said Francisco J. Cerezo, a shareholder in law firm Greenberg Traurig. The possibility of slightly overpaying for an asset or that rents will continue to drop for several years ''almost pales in comparison,'' to what they've dealt with in their own countries, he points out. Kerdyk says his clients -- especially Brazilians, thus far more insulated from the global economic crisis -- are in fact aggressively buying property and investing in development here. Having experienced their own economic downturns before, ''they have more of a stomach for it.'' And they can't see the United States not getting stronger in the long term. |
Why the lender may not OK your short sale
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By CYNTHIA RIDDELL Much of these sales are short sales. But what about the short sale offers presented to lenders that do not get approved. Many of these offers are substantially more than what the lender may see a year from now when they receive a property back in foreclosure. Thus when a short sale approval does not occur, the question posed by many borrowers, real estate agents and the like is: “Are the lenders just crazy?” Well, it may not be the soundest fiscal response when a lender rejects a short sale offer at first glance. Or it may just be that the offer is an insufficient offer. But what about the offers that are substantial and can be corroborated through comparables? One must look further for the answer to this question; one must look to the Pooling and Servicing Agreement (PSA) that a particular loan is part of. As many of us know, most mortgages were sold on the secondary market the “day after” closing and pooled with a group of mortgages held in trust as collateral for the issuance of a mortgage-backed security. Some mortgage-backed securities issued by Fannie Mae, Freddie Mac and Ginnie Mae are known as “pools” themselves. These are the simplest form of mortgage-backed security. These assets were pooled together so that Wall Street could package them as Mortgage Backed Securities. Each of the pools of mortgages are governed by this pooling and servicing agreement. Most of the agreements have provisions for when an asset goes into default. The servicier, must elect to identify the asset as non performing and place it into the foreclosure process. Once this is done the servicer is now entitled to receive two times its servicing fees. It also opens up a multimillion dollar escrow fund that the servicer can reach to for payment of foreclosure attorney fees upfront. This may very well be the reason that borrowers that attempt a workout via short sale or a deed in lieu of foreclosure never get anywhere but foreclosure. Another reason that the short sale process for approval stagnates is because of competing interests and private mortgage insurance at the investor level. Many of the securities sold have different terms for different beneficial interests or Tranche as they are known. Some are high risk with possible great returns and others are low risk conservative returns. Investopedia defines a certain type of Tranche by writing: “A special type of bond class in a sequential pay collateralized mortgage obligation. This class of bond does not receive any interest or principal payments until all other Tranches have been completely paid off. In a Z-tranche, the interest that is not paid is accrued and added to the principal for future interest calculation purposes.” Moreover, many of the more senior beneficial interests, or Tranches, may have mortgage insurance to look to for payment in the event of foreclosure. Thus for them a workout seems a moot point if they can look to insurance to make them whole. Whereas the lesser beneficial interests may not be able to look to insurance but rather a pro rata share of the proceeds from a sale. Thus within the pool there is conflict among the beneficial interests as to how to proceed: workout or foreclosure? Cynthia A. Riddell, an attorney whose practice primarily focuses on real estate foreclosure, short sale and bankruptcy issues. is a member of the Florida bar and admitted to practice in the U.S. District Court for the Middle District of Florida. She practices in Sarasota, Manatee, Pinellas and Lee counties. |
Florida’s existing home, condo sales rise in December 2008
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ORLANDO, Fla. – Jan. 26, 2009 – Florida’s existing home sales rose in December, making it the fourth consecutive month that sales activity demonstrated gains in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors® (FAR). December’s statewide sales also increased over November’s figures in both the existing home and existing condo markets.
Existing home sales rose 27 percent last month with a total of 11,053 homes sold statewide compared to 8,712 homes sold in December 2007, according to FAR. December’s statewide existing home sales were 28.9 percent higher than November’s statewide sales.
Florida Realtors also reported a 12 percent gain in statewide sales of existing condominiums in December, marking the third recent month (following September and October) for higher statewide existing home and existing condo sales compared to year-ago levels. Statewide existing condo sales last month increased 37.7 percent over the total units sold in November.
Sixteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in December; 11 MSAs also showed gains in condo sales, marking the sixth month in a row that a number of markets have reported increased sales activity.
Florida’s median sales price for existing homes last month was $155,500; a year ago, it was $213,600 for a 27 percent decrease. According to industry analysts with the National Association of Realtors® (NAR), there remains a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in November 2008 was $180,800, down 12.8 percent from a year earlier, according to NAR. In California, the statewide median resales price was $285,680 in November; in Massachusetts, it was $283,000; in Maryland, it was $262,109; and in New York, it was $210,000.
While overall sales have softened nationally in recent months, NAR’s latest housing outlook noted a trend of increasing activity in Florida, California, Arizona and Nevada markets. “Sales are rising in areas with large numbers of distressed properties as bargain hunters take advantage of discounted home prices,” said NAR Chief Economist Lawrence Yun. “It is imperative to provide incentives for homebuyers to get back into the market. It also depends on how effectively Congress and the new administration can help facilitate the short sales process and unclog the mortgage pipeline – impediments remain for some buyers with good credit.”
In Florida’s year-to-year comparison for condos, 3,138 units sold statewide compared to 2,814 sold in December 2007 for a 12 percent increase. The statewide existing condo median sales price last month was $130,600; in December 2007 it was $192,600 for a 32 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $185,400 in November 2008.
Last month, interest rates for a 30-year fixed-rate mortgage averaged 5.29 percent, significantly lower than the average rate of 6.10 percent in December 2007, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Among the state’s large to medium-size markets, the West Palm Beach-Boca Raton MSA reported a total of 638 homes sold in December compared to 467 homes a year ago for a 37 percent increase. The existing home median sales price was $246,000; a year ago, it was $337,900 for a 27 percent decrease. In the year-to-year comparison for the existing condo market, a total of 527 units sold in the MSA last month, up 26 percent compared to 419 condos sold the previous December. The market’s existing condo median price was $112,900; a year ago, it was $161,400 for a 30 percent decrease.
© 2009 FLORIDA ASSOCIATION OF REALTORS |
New rules raise the bar for condo mortgages in Florida
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BY MONICA HATCHERLending giant Fannie Mae is slapping tough new requirements on mortgages for Florida condos, moves that analysts believe will make it even more difficult to sell units in buildings already starved for residents and struggling financially. The standards, which took effect last week and apply only to Florida, include requiring that no more than 15 percent of a building's unit owners be delinquent on association fees as a condition of funding home loans to new buyers. Fannie Mae buys the majority of home loans from lenders, so it wields significant power in the making of mortgages. Fannie-backed loans generally offer the best rates and lowest down payments for borrowers. The company, wracked with financial problems of its own and in conservatorship with the federal government, said it singled out Florida after a review of its mortgage loans revealed record-high default and foreclosure rates among condo owners. It also cited the excessive number of condos listed for sale, which has driven down prices. The new rules come at a time when condo buyers already face difficulties getting mortgages. Many banks over the past two years have dramatically pulled back on condo lending, requiring down payments of up to 40 percent in new buildings. Some lenders even have blacklisted condo buildings, citing a high risk of price declines and defaults. Fannie Mae's timing ''couldn't be worse,'' said Jack McCabe, a South Florida real estate consultant who believes the region is mired in a housing depression. ``This is effectively going to make it much more difficult to qualify.'' NEEDED TO QUALIFY The new conditions include: • No more than 15 percent of unit owners can be 30 days or more past due on association fees. • For new condo buildings and condo conversions, at least 70 percent of units must have been sold or put under contract. That's up from 49 percent previously. • Fannie will have to review condo buildings itself to make sure they meet Fannie requirements -- at the lender's expense. Before, Fannie relied on the lenders to perform these reviews. Charles Foschini, vice chairman of debt and equity finance for brokerage CB Richard Ellis in Miami, said Fannie was protecting investors, borrowers and taxpayers, as it should in a climate of increased risk. Borrowers will benefit, he said, by knowing they are moving into a condo complex that is adequately funded and has plenty of reserves, allowing them to predict their monthly expenses. ''From the taxpayer's perspective . . . the quicker we can instill sounder underwriting practices for mortgages for Fannie or anyone else the more confidence we'll have in the market,'' Foschini said. `NAILS IN THE COFFIN' But many condo buildings won't meet those requirements, meaning the buildings most in need of bringing in fresh buyers will increasingly have trouble doing so. Sharon Dodge, president of the condo association at The Venetia, a 30-year-old building next to the Venetian Causeway in Miami, said about 32 percent of unit owners were past due -- more than double Fannie's new rules. She described the rules as ''driving the nails in the coffin,'' just as the association is making headway on collecting delinquent payments and when sales were finally picking up. ''To have the major source of loans draw a line through us is terrible; it's wrong and it shouldn't happen,'' Dodge said. ``The feds can't pull the rug out from under us.'' POTENTIAL FALLOUT McCabe estimates as much as 25 percent of the market in the tri-county area will be shut out of Fannie-funded financing. Peter Zalewski, whose Condo Vultures realty specializes in bulk sales of distressed condos, said his figures show that as many as 41 new buildings between the Julia Tuttle and Rickenbacker causeways, and from I-95 to Biscayne Bay, may be ineligible for Fannie Mae approval because they don't meet the new 70 percent ownership threshold. ''It's devastating,'' Zalewski said. Fannie is not the only source of funding for lenders who want to make condo loans. But John Bancroft, executive editor with trade publication Inside Mortgage Finance, said No. 2 mortgage guarantor Freddie Mac typically follows Fannie Mae's lead and would likely implement Fannie's guidelines soon. The two companies owned or backed nearly $900 billion in new home loans in 2008, more than two-thirds of the market overall. Ginnie Mae is the major guarantor for FHA and VA loans. Few new buildings had been able to meet FHA certification requirements either, Zalewski said. WHO BENEFITS? Because few lenders are holding loans in their own portfolios, the Fannie vacuum could create new opportunities for cash-rich buyers who will be able to command even greater discounts, predicted Grant Stern, principal broker of Miami-based Morningside Mortgage. ''Fannie Mae declared Christmas for hedge funds who want to buy bulk in these buildings, but it's leaving everyday investors and people who want to buy for their own personal use in the dust,'' Stern said. Stern added the restrictions further exemplified the self-fulfilling, cyclical nature of the credit crisis because Fannie's action would bring about further price declines, more foreclosures and potentially more losses for the company. ''It starts with fear, then a reaction. Then the reaction causes that fear to occur, which then confirms the fear and causes a further negative reaction,'' Stern said. |
Congress to break up REO "Listing Agent" Monopoly
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MLS Bank Homes Newswire 1/19/09
From national correspondent: Ms.Catarina Huntington That is the headline that Realtors can only hope for at this point in time. A more proportioned assignment of REO Lisitngs would have a dramatically positive impact on the Realtor industry. However, as of January 2009, REO Listing Agents continue to own a stranglehold on REO markets while the rest of the industry sinks in despair. An investigation into the facts surrounding the REO listing market is interesting.... 2 million foreclosures up for grabs Nationwide the “private club” of REO Agents currently monopolizes about 1.7 million active REO listings. In 2009, 2.0 million more properties will foreclose and according to a recent report by "Credit Suisse" the US market will be averaging 2 + million foreclosures over each of the next 4 years. Estimates are that 150,000 Realtors nationwide, provided the pertinent education, would be very qualified listing agents of REO properties. There are no specific prerequisites to become an REO Agent. Qualified Realtors simply need to possess a willingness to enter the REO arena and be thoroughly educated on the unique aspects of listing bank owned foreclosures. Hence, there are 150,000 active full time Realtors in the United States with 2 million foreclosures "up for grabs". If divided equally each Realtor would close 13 REO listings per year for the next 4 years. REO Agents Dominate Market Instead, roughly 5,800 Realtors Nationwide sold 1.6 million REO homes in 2008. That translates into an average of 22 closed listings per REO Agent, PER MONTH. That certainly doesn't sound like a “spread the wealth” philosophy does it? The REO industry's current model appears to provide for a single beneficiary: REO Listing Agents. Unfortunately the industry’s model comes at the expense of the lenders themselves, frustrated buyers and the tens of thousands of agents left out to dry. The vast majority of REO Agents are overwhelmed with inventory and under staffed. Realtors “in the field” showing REO properties tell me that they understand this “all to well”. The systemic problem within the REO Agent "underground" appears to have a multitude of negative consequences which result in longer market times and lower sale prices, say industry sources. |
Snowbirds should find lower property tax bills this year
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| Florida snowbirds, so long left out in the cold when it comes to lower taxes, may find their property tax bills falling this year — along with real estate market values. “The people with the biggest break this year will be non-homesteaded property owners whose values dropped,” said Dale Friedley, a tax analyst with the Manatee County Property Appraiser’s Office. “In most cases those values are dropping between 8 and 15 percent. If their values went down 10 percent and millage is the same, they’ll save 10 percent, compared to last year’s bill,” Friedley added. |
| @ Bradenton Herald | Posted: 01/21/09 at 0315 EST
A Short Sale occurs when a homeowner owes more on their property than the property is actually worth, but their bank agrees to accept less than what is owed as payment in full , in an effort to avoid the foreclosure process. In other words, if the Seller meets the lenders criteria, the lender agrees to “write-off” the portion of a mortgage that is higher than the value of a home. The lender requires the property to be listed by a Real Estate Agent. |
Fact Sheet: The Mortgage Forgiveness Debt Relief Act of 2007
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Today, President Bush signed the Mortgage Forgiveness Debt Relief Act of 2007, which will help Americans avoid foreclosure by protecting families from higher taxes when they refinance their home mortgages. This Act will create a three-year window for homeowners to refinance their mortgage and pay no taxes on any debt forgiveness that they receive. Under current law, if the value of your house declines, and your bank or lender forgives a portion of your mortgage, the tax code treats the amount forgiven as income that can be taxed. - This Act will increase the incentive for borrowers and lenders to work together to refinance loans and allow American families to secure lower mortgage payments without facing higher taxes.
This Act Is A Good Step To Address The Housing Market, But Congress Has More Work To Do Congress needs to complete work on responsible legislation modernizing the Federal Housing Administration (FHA). This bill will give FHA the necessary flexibility to help hundreds of thousands of additional families qualify for prime-rate financing. Congress needs to pass legislation permitting State and local governments to help troubled borrowers by issuing tax-exempt bonds for refinancing existing home loans. Under current law, cities and States can issue tax-exempt bonds to finance new mortgages for first-time homebuyers. Congress needs to pass legislation to reform Government Sponsored Enterprises (GSEs) like Freddie Mac and Fannie Mae. GSEs provide liquidity to the mortgage market that benefits millions of homeowners, and it is vital that they operate safely and soundly. The President has called on Congress to pass legislation that strengthens independent regulation of the GSEs and ensures they focus on their important housing mission. The Administration Has Moved Forward On Targeted Actions To Assist Homeowners That The President Announced In August The President and his Administration have launched a new initiative at the Federal Housing Administration (FHA) called FHASecure. FHASecure expands the FHA's ability to offer refinancing by giving it the flexibility to work with homeowners who have good credit histories but cannot afford their current payments. By the end of 2008, the FHA expects this program to help more than 300,000 families refinance their homes. Treasury Secretary Henry Paulson and Housing and Urban Development Secretary Alphonso Jackson have assembled the private-sector HOPE NOW alliance. HOPE NOW recently mailed hundreds of thousands of letters to borrowers falling behind on their payments and is supporting a toll-free mortgage counseling hotline, 1-888-995-HOPE. - HOPE NOW has developed a plan under which up to 1.2 million homeowners could be eligible for assistance. The HOPE NOW plan will help subprime borrowers who can afford the current, starter rate on a subprime loan, but would not be able to make the higher payments once the interest rate goes up.
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Fact Sheet: New Steps to Help Homeowners Avoid Foreclosure
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The President Announced The Following Steps To Help American Families Keep Their Homes - 1. The President Calls On Congress To Pass Federal Housing Administration (FHA) Modernization Legislation. The President's FHA modernization proposal would lower downpayment requirements, allow FHA to insure bigger loans, and give FHA more pricing flexibility. These reforms would empower FHA to reach more families that need help – first-time homebuyers, minorities, and those with low-to-moderate incomes – and offer more options to homeowners looking to refinance their existing mortgage.
- The Administration Will Also Launch A New FHA Initiative Called "FHASecure." The President has asked Secretary Jackson to pursue important administrative changes to give FHA the flexibility to help more families stay in their homes during this time of transition in the mortgage market. The FHASecure program will help people who have good credit but who have not made all of their payments on time because of rising mortgage payments. For the first time, FHA will be able to offer many of these homeowners an option to refinance their existing mortgage so they can make their payments and keep their homes. FHA will also charge mortgage insurance premiums based on the individual risk of each loan, using traditional underwriting standards, so it can expand access and help even more families.
- Since 1934, FHA Has Helped Close To 35 Million People Buy A Home And Stay In Their Home. FHA is a government agency that provides mortgage insurance to borrowers through a network of private sector lenders. It also offers options to homeowners looking to refinance their existing loan. The President's FHA modernization bill was first sent to the Hill in April 2006, and it passed the House last Congress with over 400 votes. The President has once again asked Congress to send him a clean FHA modernization bill as soon as possible so he can sign it into law.
- 2. The President Calls On Congress To Change A Key Housing Provision Of The Federal Tax Code So It Does Not Punish Families Who Are Forced To Sell Their Homes For Less Than Their Mortgage Is Worth. Current tax law counts cancelled mortgage debt on primary residences as taxable income. For example, if the value of a home declines and $20,000 of the homeowner's loan is forgiven, the tax code treats that $20,000 as taxable income. The President proposes temporary relief to ensure that cancelled mortgage debt on a primary residence is not counted as income.
- The President Is Working With Congress In A Bipartisan Fashion To Make This Important Change. Senator Debbie Stabenow (D-MI), along with Senator George Voinovich (R-OH) and others, has introduced a bipartisan bill that would protect homeowners from having to pay taxes on cancelled mortgage debt. In the House, Representatives Rob Andrews (D-NJ) and Ron Lewis (R-KY), along with several of their colleagues, have introduced similar legislation. The President looks forward to working with Congress to reach agreement on a bill, so we can deliver this vital tax relief to American homeowners.
- 3. The President Announced That The Administration Will Launch A New Foreclosure Avoidance Initiative To Help Struggling Homeowners Find A Way To Refinance. Housing and Urban Development Secretary Alphonso Jackson and Treasury Secretary Henry Paulson will reach out to a wide variety of groups that offer foreclosure counseling and refinancing for American homeowners. These groups include community organizations like NeighborWorks, mortgage lenders and loan servicers, FHA, and Government-Sponsored Enterprises like Fannie Mae and Freddie Mac. The goal of this initiative is to expand mortgage financing options, identify homeowners before they face hardships, help them understand their financing options, and allow them to find a mortgage product that works for them.
The President Supports Actions To Protect Homeowners And Prevent These Problems From Happening Again Federal Banking Regulators Are Improving Disclosure Requirements To Ensure That Lenders Provide Homeowners With Complete, Accurate, And Understandable Information About Their Mortgages. Many borrowers did not receive clear and complete disclosure regarding the terms and conditions of their mortgages. To help protect homeowners in the future, Federal banking regulators recently issued new disclosure guidelines for lenders, and they continue to consider new rules. Homeowners must have complete, accurate, and understandable information – including on the potential increases in their monthly payments. Federal Banking Regulators Are Working To Strengthen Mortgage Lending Standards. Questionable underwriting standards enabled mortgage lenders to place some borrowers in sophisticated products they could not afford. The Federal banking regulators recently set forth new guidelines to address lending standards, and they will continue to examine new rules. Lenders have an obligation to ensure that their standards accurately measure whether borrowers can afford their mortgage. The Administration Is Working On New Rules To Help Consumers Shop For The Best Loan Terms. This fall, HUD will propose reforms to the Real Estate Settlement Procedures Act (RESPA) that would promote comparative shopping by consumers for the best loan terms, provide clearer disclosures, limit settlement cost increases, and require fee disclosure. The Administration Supports State-Based Efforts To Create A Comprehensive Mortgage Broker Registration System. The President has also asked Secretary Paulson to examine the broad issues surrounding mortgage brokers and originators. The Administration Is Committed To Pursuing Fraud And Wrongdoing In The Mortgage Industry. Some lenders deceived their customers – and pushed them into taking out loans they knew these home buyers could not afford. Federal agencies, such as HUD, the Department of Justice, the Federal Trade Commission, and others, are aggressively pursuing wrongdoers and predatory lenders to ensure they are punished. This will send the message that these practices will not be tolerated. The President Will Create A Presidential Council On Financial Literacy Composed Of Leading Private Sector Individuals Who Can Help Promote Financial Literacy. This Council will work closely with the Treasury Department, HUD, and the Department of Education to make sure that we are raising awareness of these complicated issues. The President Supports The Efforts Of Public and Private Sector Groups That Are Promoting Financial Literacy And Providing Foreclosure Counseling. For example, the President's Budget proposes $120 million for NeighborWorks, which provides foreclosure workshops and counseling to borrowers. The President's FY 2008 Budget request includes $50 million for HUD's housing counseling program. The President Has Asked Secretary Paulson To Lead The President's Working Group On Financial Markets In Examining Some Of The Broader Market Issues Underlying The Recent Mortgage Problems. The President's Working Group on Financial Markets is led by Treasury Secretary Paulson and is composed of Federal Reserve Chairman Bernanke, Securities and Exchange Commission Chairman Cox, and Commodity Futures Trading Commission Acting Chairman Lukken. The group will examine: - The role of credit rating agencies and how their ratings are used in lending procedures, and
- How securitization, the repackaging and selling of assets, has changed the mortgage industry and related business practices.
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