Home / Daily Dose / Report: GSEs Purchased Risky Loans Despite Red Flags Appraisals Fannie Mae FHFA Freddie Mac 2014-02-06 Krista Franks Brock Report: GSEs Purchased Risky Loans Despite Red Flags Demand Propels Home Prices Upward 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Tagged with: Appraisals Fannie Mae FHFA Freddie Mac The Best Markets For Residential Property Investors 2 days ago Related Articles in Daily Dose, Featured, Government, Headlines, News, Secondary Market Servicers Navigate the Post-Pandemic World 2 days ago Krista Franks Brock is a professional writer and editor who has covered the mortgage banking and default servicing sectors since 2011. Previously, she served as managing editor of DS News and Southern Distinction, a regional lifestyle publication. Her work has appeared in a variety of print and online publications, including Consumers Digest, Dallas Style and Design, DS News and DSNews.com, MReport and theMReport.com. She holds degrees in journalism and art from the University of Georgia. The Week Ahead: Nearing the Forbearance Exit 2 days ago Subscribe Share Save Servicers Navigate the Post-Pandemic World 2 days ago Print This Post Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Sign up for DS News Daily Demand Propels Home Prices Upward 2 days ago February 6, 2014 976 Views About Author: Krista Franks Brock Governmental Measures Target Expanded Access to Affordable Housing 2 days ago The Best Markets For Residential Property Investors 2 days ago Previous: Law Firm Barrett Daffin Frappier Turner & Engel Recruits New Partners Next: Expired Tax Relief Could Increase Pressure on Troubled Borrowers About four years after the Federal Housing Finance Agency (FHFA) directed the GSEs to develop a uniform collateral data portal, the Office of the Inspector General of the Federal Housing Finance Agency (FHFA OIG) finds the portal is not being used to its potential, and the GSEs continue to purchase loans with red flags.After “extensive” development and testing, the OIG concluded in a recent audit, “more remains to be done to use the portal’s data to minimize the risk of loss.”Both enterprises continue to purchase loans despite warning messages from the portal, according to a report the OIG released Thursday.Fannie Mae purchased 56,000 loans for a total of $13 billion from January through June of last year despite warnings from the portal indicating the loans might not meet the GSE’s underwriting requirements, according to the OIG.Meanwhile, Freddie Mac purchased 29,000 loans for a total of $6.7 billion from June through September despite warnings regarding the properties’ valuations, according to the OIG.Each of the 56,000 loans purchased by Fannie Mae came with between one and nine caution messages regarding the loan’s quality.The messages dealt with such issues as confirmation of repairs and “unauthorized use of single-family loan funds,” according to the OIG, and in each case the warning message was disregarded using an automatic override.Fannie Mae purchased the loans and “focused its efforts on reviewing the loans for conformance with its requirements after it bought them,” according to the OIG.Fannie Mae reportedly “did not require lenders to explain or resolve potential problems ranging from formatting issues to violations of its underwriting requirements,” according to the OIG.Similarly, Freddie Mac purchased more than 29,000 loans despite the portal’s warning that “either no property value could be provided or the value of the property was in question,” according to the OIG. In fact, in some cases the portal could not even verify that the address existed.Like Fannie Mae, Freddie Mac’s approach was to override the warnings and review the loans for issues after purchasing them.In fact, Fannie Mae and Freddie Mac both claimed they did not want to “burden lenders with having to respond to messages,” according to the OIG.The OIG audit also detected 414,000 instances in which the portal found that an appraiser’s license could not be verified.The “uniform collateral data portal is intended to improve appraisal data quality and risk management for the Enterprises by collecting appraisal data to help them make informed decisions about the loans they buy,” the OIG reported.“However, as demonstrated by the results of this audit, these goals are at risk of not being achieved,” the OIG stated.On the bright side, the audit did cause the GSEs to consider 23 loans totaling $3.4 million for repurchase.
The Vermont Blue Ribbon Tax Commission issued its final report this afternoon. The commission, formed in 2009, offered several profound and subtle changes to Vermont’s tax code. Most noticeably, the sales tax on clothes would be restored. The commission suggested levying the general sales tax on all consumer-purchased services with limited exception on food and prescription drugs and for certain health and education services and business-to-business transactions. However, soda would now be taxed under this proposal. All this would allow the sales tax to go down to 4.5 percent. The commission urged the state to work with other states to include the sales tax on all Internet purchases. READ REPORTThe commission also wants the state to lower and flatten the income tax rate and get rid of most exemptions. The most obvious change for Vermonters would be to use the federal Adjusted Gross Income number to calculate taxes instead of the federal Taxable Income. This would allow Vermonters to take more advantage of built-in federal tax breaks.Commission members are Kathy Hoyt, Bill Sayre and Bill Schubart. They did not take up the property tax.Governor Peter Shumlin today thanked the members of Vermont’s Blue Ribbon Tax Commission for developing a report outlining changes they believe would improve the state’s tax system. ‘The report provides an excellent foundation for an important conversation, which I welcome,’ Governor Shumlin said.The Governor stated that he supports the concept of moving the state toward a simpler income tax system, as proposed by the Commission and currently used by the majority of states.‘That makes good sense, although we would want to be sure that any rate structure maintains progressivity and that adequate consideration is given to any unintended consequences of such a change,’ the Governor said.He said he remains skeptical of any increased reliance on the sales tax, voicing concern about that tax’s impact on low income Vermonters and businesses on the Connecticut River. However, he explained, there may be some room to broaden the base to lower rates in some limited instances, and he voiced support for efforts to capture the tax on sales occurring over the internet.Speaking to another suggestion in the report, the Governor added, ‘It makes sense to regularly review holes in our taxes created by credits and exemptions to make sure they still fit with our policies.’‘This administration will work with the Legislature to examine the specific principles, findings and recommendations,’ he said.Commission member Kathy Hoyt told Vermont Business Magazine that if implemented, Vermont’s national rank, which was cited as 10th highest in the nation, probably would not change significantly.The Public Assets Institute issued the following statement: “Vermont’s tax structure has had serious problems for a long time that have made the impact of the recession on Vermonters worse than it needed to be. Sales tax revenue has not kept pace with economic growth for decades. And while Vermont’s effective income tax rate’the taxes that Vermonters actually pay’puts the state in the middle of the pack nationally, our rates appear high because, as the commission has noted, those rates apply after people have taken Vermont’s generous deduction and exemptions.The political rhetoric we’ve heard in recent years about Vermont’s tax system has been misleading. This state actually has one of the fairest tax systems in the country. As more Vermonters understand this, we’ll have a better chance of taking a balanced approach to solving our current budget problems. The commission report, which was badly needed and long overdue, is a good first step in strengthening our revenue system so it continues to support the essential public services that all Vermont deserve.”View full report
Lionel Messi scored in his first game since trying to leave Barcelona as Ronald Koeman began his tenure as coach by overseeing a 4-0 Liga demolition of Villarreal on Sunday. Messi converted from the spot 10 minutes before half-time and then the Argentine’s cross forced Pau Torres into an own-goal, after an early double from the 17-year-old Ansu Fati had already put Barca in charge.It meant Barcelona’s past, present and future were all among the goals on the same afternoon as Luis Suarez, whose departure was confirmed on Thursday, marked his Atletico Madrid debut by scoring twice in a 6-1 win over Granada. In a farewell message to his best friend and former neighbor last week, Messi took another swipe at the Barca board by saying he was not surprised by the clumsy way Suarez’s exit had been handled. His complaints raised doubts about his state of mind heading into the season and at the end of a traumatic summer in which Barcelona’s greatest ever player admitted he was being forced to stay against his will. Koeman insisted on Saturday that Messi had been “leading by example” in training and his confidence was repaid at Camp Nou, where the striker, and club-captain, delivered an excellent display. “It is always important to win games, you gain confidence,” said Koeman. “This result helps us to improve and be clear about what we want.” Messi’s anger over Suarez shows he is still at odds with Barcelona’s president Josep Maria Bartomeu and his long-term future remains uncertain, but on the pitch, he delivered. Victories and goals could encourage him to stay, not to mention the talented Fati, who on this evidence can be a huge asset for his captain’s hopes of winning back the title. “Ansu is a young player who has to seek consistency in his game and in his performances,” said Koeman. “He has shown that he has a great future at Barca and I am very happy with him.”Fati became Spain’s youngest ever international scorer earlier this month and the teenager, deployed on the left of Barcelona’s attacking trio, made an explosive start to the season for his club. He fired Jordi Alba’s pull-back into the top corner and then drove a second inside the post after Philippe Coutinho was allowed to carry the ball forward and spread it wide. Fati then won the penalty, his feet too quick for Mario Gaspar, and Messi slid in his first goal of the season before his cross, aimed for Sergio Busquets, was poked into Villarreal’s net by Pau. ‘One bites, one hits’Messi might have been watching a few hours earlier as Suarez scored twice and set up another in a sensational 20-minute debut for Atletico. Suarez laid on a goal two minutes after coming on as a substitute, his sumptuous pass finished off by Marcos Llorente, before scoring himself with a powerful header at the back post. He then added another in injury-time, following up his own shot to make it six for a rampant Atletico at the Wanda Metropolitano.”Sometimes it is important to have a change as a player,” said Suarez.”I’ve come to a club that has given me a spectacular welcome, it shows in the atmosphere, you get a good impression from the beginning, and you can see that on the pitch.”Diego Costa said with a smile: “It’s great. One of us bites, the other one hits.”Costa had earlier given Atletico the lead but it was the 31-year-old who made way for Suarez, and he raised doubts about his future after the match.”I leave my future up to the club. I spoke with the club, with the coach, I made it very clear what was happening, that if I am here, I will fight,” said Costa. “If they see the possibility of me leaving, I’ll accept it. I don’t want to be a burden.”Angel Correa and Joao Felix scored Atletico’s second and third to put Granada out of sight. The 20-year-old Felix was the best player on the pitch before Suarez stole the show.Topics :