Reaction was swift to the HUD ruling yesterday to bar nonprofit’s from helping homeowners with down payment assistance on the FHA program. AmeriDream and Nehemiah Corp. of America have filed a suit.  Below is a section about Nehemiah’s complaint reported at the Sacramento Bee:
Nehemiah, which says its down-payment program has helped some 230,000 low-income and minority homebuyers, sued the U.S. [...]

For a few years now the IRS has had issue with down payment assistance programs which borrowers use to meet the 3% required down payment on a FHA loan. Basically, the IRS doesn’t think these assistance programs are non-profits. Since FHA only allows non-profits to contribute towards this 3% the whole thing falls apart if the [...]

They may be listening to your phone calls, reading your e-mails and peeking into your shoes at the airport, but the Feds apparently never listened to the radio. Well, they just tuned in and heard something they didn’t like. Yesterday the FTC issued a warning to lenders claiming those ridiculously low interest rate programs.  You know the one [...]

That is exactly what it was like at the height of the frenzy a few years back. What was meant for good was turned into a system advancing fraud. The fall out is all around us. Many of the foreclosures happening today can be traced back to the pizza delivery guy making $8,000 a month. [...]

House Bill 2040 is headed to the Governers desk. This bill makes mortgage fraud a felony. According to Inman News:
House Bill 2040 would make deliberate misrepresentations to lenders — such as inflated appraisals or falsified borrower incomes used to obtain loans that exceed a home’s true worth — class four felonies, punishable by up to [...]

Well, maybe the headline is a bit too harsh. However, the debate is real. There has been some lively discussion over at The Phoenix Real Estate Guy blog post titled “Buying a Higher FICO Score?!?“. This is the post with the thread.  I suggest reading through, there are some really insightful comments.
I commented on this as [...]

There has been some debate in the past about the use of authorized credit lines to boost credit scores. Some argue that this is fraud and others have said that as long as everybody is aware then it shouldn’t be a problem. Today Fair Isaac announced that they will ignore authorized-user credit card accounts when [...]

I admit I am tooting my own horn!
The local media did a story on mortgage fraud here in the Phoenix valley and I was interviewed for much of the material. Here is the link. Sad to say but Arizona was ranked 11th in fraud for 2006 by the Mortgage Asset Research Institute.
The industry has some [...]

I just saw this article on MSN Real Estate about lenders pushing value on appraisers. This is serious and a major problem in the Valley.  The whole cash back fraud transactions which the Arizona Republic wrote about earlier this year was based on lenders and appraisers pushing the value.  Here is my post on this topic [...]