We support reforms to the financial marketplace to curb bad practices by banks and lenders.
In his State of the Union Address on Tuesday, President Obama announced the creation of a special new joint federal-state Task Force charged with investigating the mortgage crisis and the resulting damage to homeowners and investors. The Task Force is known as the Residential Mortgage-Backed Securities Working Group. President Obama announced that New York Attorney General Eric Schneiderman will lead the Task Force as the Co-Chair to investigate those responsible for misconduct contributing to the financial crisis.
Today, Attorney General Schneiderman issued details about the core mission of the joint investigation into the mortgage crisis. The Task Force will work with federal agencies including the Department of Justice, the Securities and Exchange Commission, several state law enforcement officials and other federal entitites to:
- Hold accountable any institutions that violated the law;
- Compensate victims and help provide relief for homeowners struggling from the collapse of the housing market, caused in part by this wrongdoing; and
- To help us finally turn the page on this destructive period in our nation’s history.
Also, according to a memorandum issued today by the Office of the U.S. Attorney General, the investigation will focus on how fraud and misconduct in the residential mortgage backed securities (RMBS) market “contributed significantly to the collapse of the housing market, damaged the public’s trust and threatened the safety and soundness of our economy.”
For more details on the scope of the investigation, the additional co-chairs of the Task Force and a full list of the agencies participating in the Task Force, see the U.S. Attorney Generals January 27, 2011 memorandum.
This is a good thing! Here’s something else that should be looked into: are condominium associations interfering with home sales? Our condo here on Oahu, HI was in escrow for the past 3 weeks, and our buyer was an investor who intended to rent the condo to military members. Our buyers were putting down the requisite 20% in cash on the purchase. Yesterday, we got a call from our realtor telling us that we fell out of escrow because the buyer’s lender- after checking homeowner to renter statistics on the complex found it to be at 48% owner-occupied/ 52% rental. As a result, the lender went back to the buyer and DEMANDED an additional 10% down payment–making their down payment 30% of the loan! The buyers did not have an additional $20K to put down and had to cancel the purchase contract- now leaving us with an empty condo, and an additional mortgage, as we just closed on another house for us. How is this legal?? These were strong buyers, with a full 20% down payment- and now– we have to start over. It seems to us that the condominium associations also have their hands in some of these banks pockets as well, and are causing home sales to also fall through. Worst case- we will rent out our condo until it sells- so what did these jerks achieve? Now it’s another rental- so they should mind their own business in the first place, and the FTC should take a closer look at who these lenders are getting information from while processing valid loans.
There’s no question that they are, frankly. Those home association networks – or whatever their official name is – conspire in legally dubious ways to restrict competition. That’s what we pay the FTC for via taxes.