Archive for February, 2013

The Fateful History of Fannie Mae

I love my work as a foreclosure defense attorney for two main reasons.  First, I get a lot of satisfaction out of helping hard-working families keep their homes.  It’s not always a success story, but when a family avoids losing their house to the bank, it’s a really good feeling.  The other reason I enjoy this area of law is that I find it intellectually fascinating.  Just a few short years ago, our country–our world–was on the bring of falling into the economic abyss.  It never ceases to amaze me at how a house in Las Vegas, Phoenix, Frisco, or a condo in Miami or Orange County could destroy our financial system.  Yes, I know how it happened, which is why I find this area of law so interesting.

In my opinion, any attorney who is working in foreclosure defense and is worth their salt should be at least an amateur historian in recent economic history.  At the heart of the housing bubble–and eventually the housing collapse–was Fannie Mae.  Fannie Mae is what’s known as a government sponsored entity, or GSE.  It’s an odd combination of a government entity and private corporation.  And it makes for a very interesting study.

If you’re interested in learning about the history of Fannie Mae, I would strongly recommend the book The Fateful History of Fannie Mae:  New Deal Birth to Mortgage Crisis Fall by author James R. Hagerty.  If you don’t want to commit to reading 224 pages on the subject, I would recommend the “Cliff Notes” version here, which is the video of a very interesting forum with the author and other leading experts on the history of Fannie Mae.  The video of the forum (which was put on by the American Enterprise Institute) appeared on C-SPAN’s Book Review and is 75 minutes well spent.

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So God Made a Banker

If you’re like me, of if you have any semblance of a heart, then Dodge’s Super Bowl commercial for “God Made a Farmer,” with the Paul Harvey voice-over, made quite an impact.

Well, this is the best parody I’ve seen.  It’s called “God Made a Banker.”  It’s definitely good for a laugh (though a sad one, at that).

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Nationstar Acquires $97 Billion in Bank of America Servicing Rights

Nationstar Mortgage Holdings Inc., a Lewisville, Texas firm that services residential mortgage loans, closed a deal to acquire $97 billion in mortgage servicing rights from Bank of America.  In January, Nationstar announced that it planned to spend $1.3 billion for the rights to service residential mortgages that BofA has made with unpaid balances of nearly $215 billion.

In other words, if you have been getting statements from Bank of America for your mortgage, and have been making payments to Bank of America for your mortgage, you may very well start getting statements from Nationstar instead.  Banks are allowed to change servicers without homeowners’ consent, but they MUST inform you of who the new servicer is, and how and where you are to make your payments.  While changing servicers is supposed to be a seemless transition for homeowners, these changes often times result in misplaced or misapplied payments.  Homeowners should take extra care to make sure they are receiving credit for the payments they are making, especially during the early transition months.

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