U.S. Criticized for Lack of Action on Mortgage Fraud
Source: New York Times
The Justice Department’s inspector general, the department’s internal watchdog, released the results of an investigation and audit of efforts to address mortgage fraud. The department is facing scrutiny for closing hundreds of mortgage fraud cases after little or no investigation and making the crime a low priority. A lack of accountability after the collapse of the financial and housing markets has bolstered criticism that there has been a lack of action on mortgage fraud.
Making sense of the story:
• The report shows that the F.B.I. considered mortgage fraud to be its lowest-ranked national criminal priority. However, the F.B.I. received $196 million from the 2009 to 2011 fiscal years to investigate mortgage fraud.
• The number of pending cases and agents investigating mortgage fraud dropped in 2011, despite the availability of funds, as new staff were not always used to exclusively investigate mortgage fraud.
• Data was reported to the public that wildly overstated the government’s results. For example, it had been reported in 2012 that 530 people had been charged with fraud when in actuality only 107 people were charged. It took months of review to clarify the data.
• The inspector general report also indicates that it was falsely reported that cases that had cost homeowners more than $1 billion had been addressed by authorities. This was a highly inflated number, as in reality it was $95 million.
• The report calls on the Department of Justice to “implement a methodology for properly soliciting, collecting, and reviewing information before publicly reporting results.”
• The department is also called on to develop a method to capture additional data that will allow it to better understand the results of its efforts in investigating and prosecuting mortgage fraud and identifying the position of mortgage fraud defendants within an organization.
In other news …
SoCal housing supply expands in February, Realtors say
Source: LA Times
According to new figures from the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), the number of homes on the market jumped in February as supply expands ahead of the spring buying season. C.A.R.’s chief economist, Leslie Appleton-Young, commented, “It’s a sign we’re getting back to a more normal market, certainly.”
Young Buyers Positively View Economy
Seventy-four percent of Americans feel the economy is either better off (41 percent) or the same (33 percent) as it was this time last year, according to the latest Home Index Survey released by PulteGroup, Inc. A majority of Millennials in particular said now is a good or excellent time to buy the things they want or need—including homes.
Are post-crisis credit requirements holding back 1.2M mortgages?
As many as 1.2 million loans were “missing” in 2012 alone due to lower credit availability when compared to 2001 lending standards. This has disproportionately impacted African-American and Hispanic households, according to Laurie Goodman, center director for the Housing Finance Policy Center at the Urban Institute.
America’s 1,000 Richest Neighborhoods
Source: Atlantic Cities
America’s 1,000 richest neighborhoods are home to two million Americans, a group that makes up just 0.6 percent of the country’s population, and 18 of these neighborhoods have mean household incomes above $500,000. Their numbers are overwhelmingly concentrated in the upscale suburbs of America’s increasingly bicoastal economy.
4 million renters want to buy. Can they?
More and more Americans are gaining confidence and hoping to jump into homeownership as the market continues to recover. Zillow surveyed renters in the nation’s 20 largest housing markets, and 10 percent of U.S. renters say they would like to buy a home in the next year. However, the number of homes for sale are still well below historical norms across most markets.
Fannie Mae Wind-Down Deemed Threat to Home Recovery: Mortgages
A plan to dismantle Fannie Mae and Freddie Mac and replace it with a government-backed mortgage-bond insurer has led critics to say the plan will cause lenders to further limit risk through tighter underwriting, thereby slowing the rate of the recovery.
New Report Finds You’ll Never Own a Home in San Francisco
How much housing you can buy with a million dollars in each of the major U.S. cities? San Francisco’s real estate boom limits a million dollars to buying only about 1,500 square feet. On the other end of the spectrum, the median list price in beleaguered Detroit is just $12 per square foot — 55 times cheaper than in San Francisco.
Talking Points …
• According to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), housing inventory increased as sellers gear up for the spring home-buying season. The available supply of existing, single-family detached homes for sale increased in February to 4.7 months, up from January’s Unsold Inventory Index of 4.3 months.
• Overall, California home sales fell in February, as it marked the fourth straight month that sales were below the 400,000 level and the seventh straight decline on a year-over-year basis. Sales in February slipped 0.7 percent from a revised 363,930 in January but were down 13.7 percent from a revised 418,520 in February 2013.
• The statewide median price of an existing, single-family detached home declined 1.6 percent from January’s median price of $410,990 to $404,250 in February. February’s price was 21.3 percent higher than the revised $333,180 recorded in February 2013, marking two full years of consecutive year-over-year price increases.
Thanks for reading!
David S. Wilfert
RE/MAX R.E.O. – The Wilfert Group
12341 Newport Avenue, Suite A-100, North Tustin, CA 92705
Real Estate Broker – BRE# 01861699
Notary Public – Commission# 1987439
Direct: (714) 963-8000 or Email: David@WilfertGroup.com