Ruling by judges rattles mortgage industry
Law and custom have long required that property transactions be recorded with a county clerk or "recorder of deeds," along with information about the person who holds the mortgage...Fannie Mae and Freddie Mac, set up a company that would do it all electronically. It is called Mortgage Electronic Registration Systems (MERS)...Once people started defaulting on loans, MERS would announce the default on behalf of its bank clients. Consumer activists and attorneys for homeowners began questioning whether MERS, which represents banks but has no direct financial interest in the loans, could legally trigger foreclosure, but judges were generally not sympathetic to the argument.

GRETCHEN MORGENSON:The Mortgage Machine Backfires
The opinion spotlights a crucial but obscure cog in the nation's lending machinery: a privately owned loan tracking service known as the Mortgage Electronic Registration System. This registry, created in 1997 to improve profits and efficiency among lenders, eliminates the need to record changes in property ownership in local land records... Dotting i's and crossing t's can be a costly bore, of course. And eliminating the need to record mortgage assignments helped keep the lending machine humming during the boom... In April 2006, Mr. Kesler filed for bankruptcy. That July, Landmark National Bank foreclosed. It did not notify either MERS or Sovereign of the proceedings, and in October, the court overseeing the matter ordered the property sold. It fetched $87,000 and Landmark received what it was owed. Mr. Kesler kept the rest; Sovereign received nothing.

Why We Need Robust Consumer Financial Protection
This morning I testified before the House Financial Services Committee to support the creation of a robust new Consumer Financial Protection Agency.  Our current system of consumer protection fails to protect Americans of all races and backgrounds from the most basic exploitation and abuses that can cost individuals and families hundreds of thousands of dollars, and even their homes. Current laws and enforcement allow a range of institutions to escape supervision because responsibilityfor consumer protection is fragmented across too many regulators. Too many finance companies are not regulated at all at the Federal level.

Warranty Week: New Home Warranties
One CEO recently said the worst of this cycle may be behind us. In terms of sales decreases and price declines, maybe so. But in terms of warranty costs, the worst is right now, as builders have less cash to pay for warranty work on units they sold at the end of the boom years. And then there's the question of how costly the defective Chinese drywall will turn out to be to replace. At least two homebuilders -- KB Home and Beazer Homes -- made houses in 2006 and 2007 that were apparently built so well that the companies found it appropriate to make absolutely no accruals at all during certain periods. In other words, their financial accountants must have predicted that some of their homes were so well-built that they would need no warranty work at all. The very next quarter, accruals sprang back to levels of $2,000 or more per home, but the companies were just as silent about these apparent quality reversals as they were about their flawless predecessors.

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A message from Janet Ahmad: Taxpayers Stimulus at Work, the Magic Kindom of Mortage Gifts and Promises

New Community Website - Cracked Houses.com - D.R. Horton & Vision Homes
Why have numerous D.R. Horton and Vision Homes foundations failed in so many of our beautifully designed Huffines Signature Community of Savannah Texas? Why have several D.R. Horton and Vision Home owners experienced water intrusion problems? Why have so many of us experienced this in the first, second and third years after moving into our new homes? Why have so many of us have experienced the same problems more than once after being supposedly 'fixed' by our builders? Read more...

Local homeowners accuse builders of deceptive trade
Bill and Connie Consentino thought they were getting a good deal on a Pulte home in the age-restricted Solera community in Anthem. The incentive package for financing through the builder's mortgage lender included free upgrades, new appliances, landscaping and payment of Local Improvement Districts, or money used to pay for neighborhood infrastructure. The complaints call attention to sales and lending practices of some of the nation's largest public homebuilders, including Pulte Homes, KB Home and Lennar Homes, and their affiliated mortgage companies, Alliance spokeswoman Denise Martin said.

Homebuyers File Complaints Against Nation's Largest Corporate Homebuilder Alleging Deceptive Practices
Nevada homebuyers today called on the Nevada Attorney General to take action on complaints of deceptive sales and lending practices by Pulte Homes Corp., the nation's largest corporate homebuilder, and by several other builders. Eighteen homebuyers have filed complaints alleging false statements and concealing of important information in violation of Nevada's consumer protection law. The complaints highlight the role corporate homebuilders played in the housing boom, bubble and bust that led to America's economic crisis. Pulte and other builders misled homebuyers about the deals they were getting and pushed them into unfair and deceptive mortgages, all the while continuing to buy land and build homes despite clear signs that the housing market was unsustainable.

Frank backs Rep. Ron Paul's Fed audit bill
MarketWatch By Ronald D. Orol - WASHINGTON  - House Financial Services Committee Chairman Barney Frank, D-Mass., said he backs legislation introduced by Rep. Ron Paul, R-Texas, that would require the Government Accountability Office to audit how the Federal Reserve implements monetary policy and examines every aspect of the Fed, including how much it has lent and will lend to specific banks as part of its bank bailout program. "We are serious about some legislation in this regard," said Frank at a hearing on Paul's bill. "I have some concerns, some time needs to elapse before certain disclosures take place, we are working together; we want there to be publicity but we don't want there to be a market effect in the near term." The legislation introduced by Paul, which requires approval by the House Financial Service Committee before it comes to a vote by the full House, has 295 supporters in the House.  Related Public Citizen Consumer Information: Interesting Financial Services Committee Press Releases 

BusinessWeek: USDA Home Loans: Subprime Redux?
Builders and lenders are dusting off a familiar pitch: mortgages with $0 down and 100% financing. The deals, which take advantage of a little-known loan program at the U.S. Agriculture Dept., are bolstering sales in some areas. These new mortgages share some characteristics with the old ones now wreaking havoc on the housing market"€”and critics fear lending standards could slip...  Analysts say federal loans, including those guaranteed by the USDA, accounted for 64% of sales at builder D.R. Horton (DHI) in the latest quarter.

Landmark Decision Promises Massive Relief for Homeowners and Trouble for Banks
A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. In Landmark Natioal Bank v. Kesler,  2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership. The significance of the holding is that if MERS has no standing to foreclose, then nobody has standing to foreclose -- on 60 million mortgages. That is the number of American mortgages currently reported to be held by MERS. Over half of all new U.S. residential mortgage loans are registered with MERS and recorded in its name. Holdings of the Kansas Supreme Court are not binding on the rest of the country, but they are dicta of which other courts take note; and the reasoning behind the decision is sound.

Delayed Foreclosures Stalk Market
Debra and Arthur Scriven were served notice in June 2008 that their mortgage lender, a unit of Citigroup Inc., was preparing to foreclose on their home. Fifteen months later, the Scrivens are still in their home near Columbia, S.C., and battling to stay there, even though a dispute with the lender over how much they owe prompted them to stop making regular payments last year... Legal snarls, bureaucracy and well-meaning efforts to keep families in their homes are slowing the flow of properties headed toward foreclosure sales, even when borrowers are in deep distress. While that buys time for families to work out their problems, some analysts believe the delays are prolonging the mortgage crisis and creating a growing "shadow" inventory of pent-up supply that will eventually hit the market.

Buying a lot, the couple may have unknowingly helped inflate prices at a coastal project
More than 200 plaintiffs in on of the largest alleged mortgage fraud cases in state history have said for months that they were duped into paying inflated prices for coastal lots. Now the revelation that former Gov. Mike Easley and his wife, Mary, got a 25 percent discount from a developer named in the lawsuits shows that even the state's highest official may have unwittingly helped hype the prices they paid. No one involved in the fraud cases has claimed that the Easleys were knowingly involved. But the $137,000 discount they received on their lot was not shown in the $550,000 sale price reported to the Carteret County Register of Deeds.  "When you have all these politically connected players and they are setting up pricing that is not reflected in the records at the courthouse, how are my clients ever going to get a fair market price?" said S. Jill Pisner, a McLean, Va., lawyer whose firm filed the first and largest of several lawsuits alleging mortgage fraud in two coastal developments here and one in South Carolina.

Easley land permits draw grand jury focus
A federal grand jury wants to hear from two state environmental officials who handled permits on the Cannonsgate land project, a development in coastal Carteret County where former Gov. Mike Easley acquired a soundfront lot in 2005. The officials have been asked to appear today. Questions have swirled around the permitting process since reports in The News & Observer in May showed that real estate broker McQueen Campbell, a friend of Easley, bragged in writing that political contacts by him and the land's marketer, Gary Allen, helped secure the wastewater treatment plant permit in half the one year's time he said it should have taken.

Staggering $1.142 million
This 1926 home features hardwood floors, a large renovated kitchen, a bright two-bedroom basement suite, a white picket fence and a tree swing.