Arizona now ranks fourth for mortgage fraud nationally. It’s the first time the state has cracked the top five for the problem, according to data released this week from the Mortgage Asset Research Institute.

Florida, New York and California (in that order) rank ahead of Arizona in 2009 mortgage-fraud cases. The [...]]]> Arizona No. 4 For Mortgage Fraud

Arizona now ranks fourth for mortgage fraud nationally. It’s the first time the state has cracked the top five for the problem, according to data released this week from the Mortgage Asset Research Institute.

Florida, New York and California (in that order) rank ahead of Arizona in 2009 mortgage-fraud cases. The most prevalent type of home-loan fraud is application misrepresentation, which includes borrowers lying about income. Overall, U.S. mortgage fraud climbed 7 percent last year.

Jennifer Butts, manager of data processing at the Mortgage Asset Research Institute, said mortgage fraud typically goes undetected until a loan goes into foreclosure. Arizona has been among the top-10 states for mortgage fraud since the end of the state’s housing boom in 2006.

Phoenix survey

RL Brown and Greg Burger did more than compile important building statistics in their latest “Phoenix Housing Market Letter.” They polled 200 real-estate leaders on the area’s economy and housing market. The first question asked participants to rank the state’s biggest problems: No. 1 was jobs and No. 2 was foreclosures.

Then, the group was asked what it expected of Phoenix’s real-estate market in the next year. More than one-half of respondents expect it to stay the same. About 31 percent expect it to improve.

The “Phoenix Housing Market Letter” reports there were 908 home-building permits issued in the region during March, the highest level in eight months.

S&P index

The latest Standard & Poor’s/Case-Shiller home-price index shows Phoenix-area home prices fell 1.5 percent between January and February. The Valley fared better than Chicago, Cleveland, Minneapolis and Portland, Ore., which all posted monthly price declines of more than 2 percent.

For the 12 months that ended in February, S&P tracked a 1.6 percent drop in Phoenix home prices. Las Vegas dropped 15 percent for the period. Tampa and Seattle posted a 6 percent drop. Detroit was next with a more than 5 percent decline.

Homebuyer help

Phoenix is holding sessions to help people tap federal Neighborhood Stabilization Program funds to buy foreclosures. Homebuyers can get $15,000 in down-payment help. Today’s program is 6 p.m. at the Washington Activity Center, 2240 W. Citrus Way. Another program is planned at 6 p.m. Thursday at South Mountain Community Center, 212 E. Alta Vista Road.

The Arizona Attorney General’s office has settled two mortgage fraud lawsuits for $1.37 million. Most of the money will go towards paying restitution to consumers who lost money to the “foreclosures help” firms.

Richard Winer, principal of the firm Taken Care of Investments, has agreed [...]]]> Two AZ “foreclosure rescue” firms to pay $1.37 million in fines, restitution

The Arizona Attorney General’s office has settled two mortgage fraud lawsuits for $1.37 million. Most of the money will go towards paying restitution to consumers who lost money to the “foreclosures help” firms.

Richard Winer, principal of the firm Taken Care of Investments, has agreed to pay fines totaling $691,000,half of which goes to consumers who lost money to the firm, according to a Maricopa Superior Court consent judgment.

In March, Attorney General Terry Goddard’s filed a complaint alleging Winer and his businesses defrauded 270 Arizona homeowners in danger of foreclosure, by promising to obtain the deed to their home and then lease it back to them. But instead, homes were sold to investors who usually evicted homeowners. Winer is consenting to pay the fine without admitting guilt.

According to court documents, Winer and his salespeople persuaded struggling homeowners to deed him their homes in return for Winer assuming their monthly mortgage payments and paying off the full value of their delinquent payments.

Winer charged homeowners a monthly fee that was as much as the mortgage payment. Neither the owner’s mortgage lender nor servicer was notified of the transfer of title.

These owners-turned-renters had the option to repurchase the house from Winer within one year for approximately $15,000, if they met all of the conditions of the sale-leaseback agreement.  If the owner-turned-renter didn’t meet any of the conditions, which included never being late on a payment, the option to repurchase the home was cancelled. The former homeowners could then be evicted immediately.

A man who answered the phone at the Tempe office of Taken Care of Investments said he didn’t know who Winer was and hung up.

Glendale-based Hope for Homeowners Now and its principals, Matthew Castaneda and Michael Winding, have been ordered to pay almost $580,000 in fines, according to a default judgment filed in Superior Court. In July, the Attorney General’s office filed a complaint against Hope for Homeowners Now alleging the company victimized homeowners facing foreclosure by fraudulently claming high success rates with loan modification deals.

According to court documents, Hope for Homeowners Now advertised loan modification services for an upfront fee of $3,195 and then solicited their modification services with claims including: “Over 80% of our customers have tried to deal with their lending institutions on their own and failed,” and “Loan modifications have a very small success rate if you try to do it with a non-profit organization or yourself.”

Hope for Homeowners Now and its principals were served with the lawsuit and notice of a court hearing regarding the State’s claims, but the defendants didn’t appear in court or respond to allegations against them. Due to their failure to respond, Maricopa County Superior Court Commissioner Jay Davis issued a default judgment in favor of the State.

The phone has been disconnected at the Glendale office of Hope for Homeowners.

“These operations misled vulnerable homeowners for profit, with no apparent concern for the damage their actions caused,” said Goddard.

Goddard said law enforcement alone is not enough to stop mortgage fraud. He continues to urge federal and state lawmakers to adopt heightened protections for homeowners, including state legislation prohibiting predatory lending and the creation of a Federal Consumer Protection Agency.

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Mortgage rates for 30-year fixed U.S. home loans fell for the second consecutive week, pushing borrowing costs to near record lows.

The average U.S. 30-year rate dropped to 4.87 percent from 4.94 percent last week. The 15-year rate was 4.33 percent, mortgage buyer Freddie Mac of McLean, Virginia, said today in a [...]]]> Mortgage Rates Fall To 4.8%

Mortgage rates for 30-year fixed U.S. home loans fell for the second consecutive week, pushing borrowing costs to near record lows.

The average U.S. 30-year rate dropped to 4.87 percent from 4.94 percent last week. The 15-year rate was 4.33 percent, mortgage buyer Freddie Mac of McLean, Virginia, said today in a statement.

Falling rates helped boost home-loan applications last week to the highest level since May. The Mortgage Bankers Associations index of applications to purchase a home or refinance rose 16 percent. Rates around 5 percent, slumping home prices and a government tax credit for first-time homebuyers are bolstering demand for housing.

Were not expecting the housing market to come roaring back to anything close to what it was during the boom, said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. It’s going to be a long, gradual recovery.

The Federal Reserve set out last year to encourage lower mortgage rates by pledging to buy bonds backed by home loans. It increased the size of the program to $1.25 trillion in March.

The purchases from Fannie Mae, Freddie Mac and Ginnie Mae brought down yields on mortgage-backed securities and allowed lenders to reduce rates on new loans while still selling the securities backed by them at a profit. The plan helped drive home loan rates to a record low of 4.78 percent twice in April.

Applications Rise

Mortgage applications to buy a home climbed 13 percent in the week ended Oct. 2 and the refinancing gauge surged 18 percent.

Recent data indicate the housing industry is emerging from its worst recession since the 1930s. The index of signed purchase agreements, or pending home sales, jumped 6.4 percent in August, a seventh consecutive gain, the National Association of Realtors said on Oct. 1.

Source: Bloomberg News

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The difference between a first and second mortgage is simple. A first mortgage is taken out for the purchase of the home, while a second mortgage is taken out on any residual value between the outstanding loan balance and the value of the home.

Usually, homeowners will take out a second mortgage [...]]]> How to Understand Second Mortgages

The difference between a first and second mortgage is simple. A first mortgage is taken out for the purchase of the home, while a second mortgage is taken out on any residual value between the outstanding loan balance and the value of the home.

Usually, homeowners will take out a second mortgage to perform some renovations or improvements to the property, but increasingly, people are using the equity in their homes to reduce or eliminate their high rate credit card debt.

A home improvement is a good reason to obtain a second mortgage, but you should be sure that the improvements you make are going to perform are worth the additional payments you will be making.

Some home improvements, however, are nothing more than luxuries and will not affect the future value. An in ground pool is an example that is frequently used, since there are many buyers (with young children, for instance) who would not care to have one.

Reducing high interest rate debt is another standard use for a second mortgage, as long as you are able to keep your total costs down. Replacing 16 to 20% debt on your credit cards with 5-9% debt on a second mortgage certainly does make a lot of sense.

Creating more debt that is not going to either add value to your home, or reduce your currently outstanding debt is not a good economic decision.

Unlike a first mortgage, a second mortgage will not have priority on your home if you default. The first mortgage on your home would be repaid by your home’s value before any funds go toward the second mortgage.

For this reason, rates on second loans are higher since the bank has that risk, and the possibility of default is higher.

There are closing costs with second mortgages just as there are with first mortgages. Make sure you are fully aware of all of the closing costs you will have to pay for loan, so that you can be sure the total cost of the loan balances the increased value of the home or the savings on the credit cards!

When it comes to second mortgages, you should shop around, both for the best loan rates and for the lowest closing costs, which comprise a greater part of the loan in a second mortgage.

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