November 2012

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THE LATEST SERVICING Indictments for Mortgage Fraud F is the first nationwide effort focusing on fraud schemes that targets struggling homeowners. Led by members of the ederal officials jointly announced the results of the Distressed Home- owner Initiative, which Mortgage Fraud Working Group of the Financial Fraud Enforcement Task Force, the initiative spanned from October 1, 2011, to September 30, 2012. The Mortgage Fraud Working Group explores issues related to mortgage and subprime lending fraud. Federal officials revealed the Perkins added, "We recognize the negative impact that mort- gage fraud and foreclosures have on our economy and on our communities. We cannot merely investigate after the fact. We must use intelligence and sophisticated techniques to iden- tify and stop those who seek to defraud American homeowners. We will continue to work with our partners across the country to ensure the integrity of the housing market and to keep our communities safe." In addition, the Justice efforts have led to 530 criminal defendants charged (including 172 executives) in 285 federal criminal indictments or informations filed throughout the U.S. The criminal cases involved more than 73,000 homeowner victims, and law enforcement es- timated losses exceeded $1 billion. Attorney General Eric Holder, HUD Secretary Shaun Donovan, FBI Associate Deputy Director Kevin L. Perkins, and Federal Trade Commission (FTC) Chairman Jon Leibowitz made the joint announcement, the Justice Department stated in a release. "With actions like those an- on the Rise October statistics reveal that 530 individuals have been targeted for mortgage fraud schemes during the past 12 months. FBI Associate Deputy Director Credit Access to Hinder Housing fied 15,000 victims and estimated losses of more than $37 million. Efforts have also been made Department, Federal Trade Commission, Consumer Financial Protection Bureau (CFPB), and other groups filed 110 federal civil cases against 153 defendants. In those cases, officials identi- nounced today, we send a very clear message: If you don't oper- ate ethically, transparently, and within the boundaries of the law, we will not hesitate to act," said Donovan in the release. to prevent struggling homeown- ers from becoming victims of fraud. Together, the Treasury Department and SIGTARP have shut down or forced into compli- ance more than 900 websites and web advertisers that were con- sidered confusing or fraudulent. According to the release, the web- sites displayed the Treasury Seal and key TARP housing program names to deceive homeowners. When combining the total ef- forts of federal and state criminal and civil cases, the initiative has identified and assisted more than 91,000 victims. W ing market, LendingTree expects tight lending requirements will keep many borrowers from tak- ing advantage. According to the online finance hile the fall months look to be "unprecedent- ed" for the hous- Through Year's End LendingTree's Monthly Mortgage Review projects the impact of falling credit availability. market. Homeowners who want to refinance may find it is easier to meet loan-to-value require- ments; however, mortgage lending overall is expected to remain tight due to continued uncertainty around housing regulations." Mortgage rates spent most of and lending network's Monthly Mortgage Review, the summer's average mortgage rate was 3.91 percent for a 30-year fixed, with the average home loan just more than $200,000. While LendingTree expects mortgage rates to hover near their record lows in the fall months, access to credit is expected to remain constrained as the industry works to adapt to new housing regulations. "Home values are beginning to improve just as we approach the close of the home-buying season," said Doug Lebda, founder and CEO of LendingTree. "Home prices are still below the levels they were five years ago, creat- ing an excellent opportunity for first-time homebuyers to enter the the summer consistently hitting new record lows before bouncing back at the beginning of August. However, news of further efforts from the Federal Reserve to aid economic recovery sent rates spiraling back down. With both major party presi- dential candidates presenting dif- ferent strategies for dealing with the slowly recovering housing market, the upcoming election also has experts and investors wondering about the future. No matter the outcome in the presidential race, if the Fed's commitment to a third round of quantitative easing doesn't trans- late into a healthier job market, LendingTree said any housing recovery may not be able to sustain itself. THE M REPORT | 49 ORIGINATION SERVICING ANALYTICS SECONDARY MARKET

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