Mortgage Lenders Under Government Scrutiny

The famous faces of Fannie Mae and Freddie Mac are at the top of the list of organizations under threat, and the poster kids for good intentions went wrong. Earlier this year the government departments faced increased federal scrutiny. Yet what to do with the struggling HUD classes is still out in the open. The problem is postponed until after the latest reform attempt by the federal bank is finished, which is planned by year-end.

Of those two lenders Reformation is certainly on the horizon. The Treasury Department is considering expanding options regarding both lenders on guidance officials released in June. Privatization, nationalism and hybrid policies are all measured for reform.By clicking here we get info about Overland Park mortgage lender.

Last year the federal government took Fannie and Freddie into the conservatorship as the financial crisis spread. Control of government seemed inevitable. If the two were to collapse, the damage was thought to be irreparable and more widespread and devastating than the failure of even the Lehman Brothers.

Reform is critical, as these entities are providing the majority of US home loans. The U.S. Department of Treasury was authorized to purchase Fannie and Freddie mortgage securities by the end of this year. Legislation is set to expand the conservatorship of the Treasury until the end of 2010.

Wells Fargo, the beneficiary of $25 billion in bailout money from banks, was the main lender of two recently shuttered Alabama companies. The Wadley company Plantation Patterns and the Anniston company Anniston Sportswear both filed for bankruptcy, and the primary lender for both companies was Wells Fargo. A total of more than 660 jobs were lost at both closings, according to federal statistics and a local mayor ‘s report. Meadowcraft, based in Birmingham, is the parent firm of Plantation Patterns. Anniston Sportswear’s parent company is the Chicago based Hartmax Corporation.

The apparent reluctance by Wells Fargo to collaborate with any organization attracted federal scrutiny. In two separate incidents the lender was named in complaints written to Treasury Secretary Timothy Geithner by more than 40 members of Congress.

Not unfamiliar with federal oversight, last year Countrywide came under the federal spotlight again, this time by a federal insolvency court official. Accused of stealing, missing or misplacing $515,000 in homeowners’ checks, the home lender was further accused of applying improper fees to the homeowners’ bankruptcy debt.

Countrywide eventually worked out a deal with the court; however, the Department of Justice challenged the settlement because of some unsavory terms the mortgage lender had put forward. It contained a non-disparaging provision, which prompted the U.S. trustee to allow a review of Countrywide ‘s entire structures in the case.

Many mortgage lenders now under federal investigation that require loans for reverse mortgages are being investigated. Several lenders in charge of aggressive lending have now turned to high-pressure schemes and broad-yield premiums aimed at wiping out older homeowners. Michael S. Blume, United States Attorney, noticed a drastic rise in the amount of reverse mortgage loans.