Shared by Deborah Goonan, Independent American Communities
One of my readers shared this shocking report. It clearly illustrates how housing finance policy in the US is manipulated to benefit real estate investment moguls, and not consumers (homeowners).
As you read this article – it’s a bit lengthy but worth your time – keep the following questions in mind:
How does approving risky mortgage loans with unfair or unconscionable terms “help” consumers?
How does the industry and the federal government get away with calling FHA mortgage financing “affordable,” when, clearly, given astronomically high rates of foreclosure, it is unaffordable for most homeowners?
How does piling on collection and attorney fees assist homeowners in keeping their homes?
Why did HUD give hedge fund investors steep discounts to purchase liens (delinquent mortgages), yet homeowners were rarely given the opportunity to reduce the principal balance on their loans to more realistic market values?
Keep in mind that many of these “affordable” purchases that later ended up with owners losing their homes were condos and townhouses with HOAs. We don’t know how many, however, because the American Community Survey (a Census project done in conjunction with HUD) does not specifically track membership of Americans in one or more Association Governed Residential Communities.
After you read the article, feel free to comment.
Hedge funds get cheap homes, homeowners get the boot
Seven years after the real estate market crashed, major investors are again buying mortgages by the thousands. This time, they are buying from the government — at a significant discount.
Over 98,000 mortgages have been sold to investors by the Department of Housing and Urban Development (HUD) — at times as little as 41 percent of the mortgages’ collective value.
HUD’s mortgage sales program is meant to help distressed homeowners avoid foreclosure. But rather than offering better terms to borrowers, the new owners often flip the homes for a profit, advocates say.
Only 16.9 percent of the mortgages sold between 2010 and 2014 have successfully avoided foreclosure, according to a HUD reports. That number also includes third party sales or deed-in-lieu, which still result in the homeowner losing their home.
Homeowners don’t know when their mortgages are sold, and can’t advocate for better terms before auction, which they’re entitled to under Federal Housing Administration protection.
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