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Federal National Mortgage Association Message Board

  • wilson2207 wilson2207 Feb 2, 2007 9:46 AM Flag

    Dear Congress and OFHEO:

    Dear Honorable members of Congress and OFHEO:

    A simple yes or no answer to a simple question. Does Fannie Mae invest directly or indirectly in new housing developments? If it does not, then I see no problems, as long as arm's length transactions are part and parcel of all transactions. If it does, then the possibility of manipulation, conflict of interest, and all other forms of financial shenanigans which may attend such an arrangement, should be thoroughly investigated and examined to ensure the public interest is being protected.
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    The tip of the iceberg? Have these people complied with all regulations and taken an ethics course? We know that this type of behavior does not apply to members of the NAR as we've all heard the advertisements touting their honesty and adherance to a code of ethics. (As a regulatory tool, sheer nonsense.) Are the following examples of realestate transactions between willing buyers and sellers, or something more? Arm's length transactions? Theft can take many forms and some thieves are more sophisticated than others.

    Excerpts from the article at HADD.com, Homeowners Against Deficient Dwellings, Headline News:

    Steal of a deal
    Houses bought at inflated prices. Millions in loan proceeds allegedly pocketed. All ending in foreclosure. In Colorado, it's one part of a nation-leading problem.
    By David Olinger
    Denver Post Staff Writer
    Article Last Updated:10/29/2006 03:56:18 PM MST

    The buyers "saw our big signs on Parker Road and came in, just like any other customer would," he said. "Investors buy multiple properties. They were portrayed as investors."
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    Critics say mortgage companies have little incentive to ferret out inflated sales because they bundle and resell their home loans to Wall Street investors, taking their profits and diluting fraud losses in large pools of mortgage-backed bonds.
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    These securities get "sold in little pieces all over the world," said Lou Barnes, a Colorado mortgage bank owner. "It makes it very difficult to figure out who, if anyone, bears any responsibility for the flow of Colorado's foreclosures."
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    The extra cash was supposed to be "rehab money," she said. "I didn't know better. I was believing the Realtor and the mortgage lady," who was also her partner.

    Johnson said appraisals were inflated to support purchase prices. Her partner, she said, squandered the home improvement funds on "trips to Disneyland, car repairs, shopping sprees - gambling was huge."
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    "Their blaming other people is typical," he said. "Nothing has been their fault, and they are not responsible for their actions."

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