A bit about contruction and mortgages…
Nathan Parker, 49, Philadelphia, Pennsylvania, the ringleader of a $4 million mortgage fraud scheme, was sentenced to serve 9 years, 7 months in federal prison by United States District Judge Orinda D. Evans on charges of conspiracy to commit mortgage …
Any consumer with a functioning BS detector who has seen (over, and over, and over again) number one mortgage lender Countrywide’s televised ads - you know the ones, with a smarmy, guy next door spokesmodel, pitching everything from option ARMS to debt-consolidation Home Equity Loans - probably recognized that there was more at work there than simple “we’re here to help” salesmanship. Case in point, this piece from Sunday’s New York Times, on Countrywide’s unseemly sales practices, which exposes a corporate culture built around separating its customers from as much of their money as possible:“I want to be sure you are getting the best loan possible,” the sales representatives would say. But providing “the best loan possible” to customers wasn’t always the bank’s main goal, say some former employees. Instead, potential borrowers were often led to high-cost and sometimes unfavorable loans …Countrywide’s entire operation, from its computer system to its incentive pay structure and financing arrangements, is intended to wring maximum profits out of the mortgage lending boom no matter what it costs borrowers…Now, without begrudging any organization fair profit from its toils (I think we are all adult enough to comprehend that the mortgage business, or any other, is not a public charity,) Countrywide does appear to have set up an organization devoted to deliberately, systematically, and professionally screwing its customers, rather than providing a fair exchange of goods and services. Borrowing from their Slogan: Nobody Can do What Countrywide Can.Inside the Countrywide Lending Spree [NYT]Photo: Bloomberg
William Page, 37, Old Bridge, New Jersey, pled guilty before U.S. District Judge Jose L. Linares to a one-count Information charging him with conspiracy to commit mail fraud for creating materially false and misleading property appraisals and construct…
Graphic Courtesy MSNBCLast Week:A sparse economic Calendar and the afterglow of the Fed’s easing of the discount rate restored a measure of calm to the markets. A positive new home sales report showed a modest improvement in sales and reduced supply. Rates across the board remain unchanged to very slightly better.This Week:Existing home sales, Fed minutes, and two key measures of inflation (GDP Chain Deflator, and PCE, or Personal Consumption Expenditures ) head the calendar. The case for Fed easing, and for lower rates in general, will be bolstered if the data shows moderating inflation. The credit markets also bear watching - is the worst behind us, or will more bodies surface? The answer to that question may move the markets, and rates, at will.This Week’s Economic Calendar [Barrons]
Rachel Donegan, 37, and David Lincoln, 37, Baltimore, Maryland, pled guilty to wire fraud arising from a mortgage fraud scheme. Donegan and Lincoln worked at 1st Metropolitan Mortgage and Guilford Title and Escrow, located in Baltimore, Maryland, pre…
Molly L. Heise, 49, Greenfield, Minnesota, owner of real estate closing firm Profile Title & Escrow Corp., and Christine A. Hein, 38, Buffalo, Minnesota, the company’s chief financial officer, were charged in a superceding indictment with mul…
Delbert Baptiste, 45, Kings County, New York, pled guilty to grand larceny in the second degree and was sentenced to three to nine years in prison for a mortgage fraud scheme totaling more than two million dollars. Baptiste used the property at…
By Maria Pracher and William Fleishhacker
On August 21, 2007, the California State Legislature ended a 52‑day budget stalemate, agreeing to a $145 billion spending plan. As part of that agreement, the lawmakers passed minor amendments to the California Environmental Quality Act (“CEQA”). The amendments require the State Office of Planning and Research to develop and prepare guidelines addressing the analysis and feasible mitigation of greenhouse gas emissions, as required by CEQA. These guidelines must be adopted by the Resources Agency by January 1, 2010. The amendments also provide an exemption for certain projects from CEQA lawsuits based on claims that the effects of greenhouse gas emissions were not adequately analyzed or mitigated in an Environmental Impact Report (“EIR”) or other CEQA document prepared for the project. The projects exempted are any transportation or flood protection projects funded by the $25 billion bond measures passed by the voters in 2006. The CEQA exemptions are temporary, expiring on January 1, 2010.
Lawmakers had sought these CEQA exemptions in reaction to a lawsuit filed by Attorney General Jerry Brown against San Bernardino County challenging the EIR prepared for the County’s updated General Plan. The Attorney General alleged that in light of the passage of the California Global Warming Solutions Act (“AB 32”), the County’s General Plan EIR did not adequately analyze the effects of development on global warming. The Attorney General has also submitted comments under CEQA to several other cities and counties, making similar allegations.
Notably, on the same day the CEQA amendments were approved, the Attorney General and San Bernardino County announced the settlement of the global warming lawsuit. Under the settlement, the Attorney General will dismiss his suit, and the County will implement a Greenhouse Gas Emissions Reduction Plan that mandates the following:
· An inventory of all known, or reasonably discoverable, sources of greenhouse gases in the County.
· An inventory of the greenhouse gas emissions levels in 1990, currently, and projected for the year 2020.
· A target for the reduction of emissions attributable to the County’s discretionary land use decisions and its own internal government operations.
Although the CEQA amendments approved as part of the budget compromise would protect the State‑funded transportation and flood control projects from potential CEQA claims based on similar arguments that the Attorney General or others may have pursued, the Attorney General is still free to pursue CEQA claims based on a local government approval of General Plans, and other development projects. However, the settlement with San Bernardino County provides a potential framework for how local agencies can address climate change issues to avoid litigation.
The settlement with the Attorney General does not resolve a separate lawsuit filed against the County by environmental groups. In addition, under the CEQA amendments, CEQA Guidelines for the evaluation and feasible mitigation of greenhouse gas emissions are not required to be adopted until the end of 2009. Thus, a large degree of uncertainty still exists for local governments and developers in determining how global warming impacts should be evaluated, and feasibly mitigated, in a CEQA document.
For further information please contact Maria Pracher and William Fleishhacker. Maria Pracher is a partner in the Real Estate, Land Use and Environmental Practice Group in the firm’s San Francisco office. William Fleishhacker is an attorney in the Real Estate, Land Use and Environmental Practice Group in the firm’s San Francisco office.
If you have any notion that our collective national jones for borrowed money at any cost and nearly any terms will be behind us once the market, the government, et al deals with the mortgage mess, you might want to re-think things. For instance: You might assume, super-smart blog readers that you are (you are!), that the consumer, faced with stagnant incomes, flat-to-declining home values, rising interest rates, and tougher credit standards, would curtail spending. Right? Well…maybe not. What appears to be happening, is that consumers less able to tap home equity to feed spending habits are turning to credit card debt: As Mortgage Equity Withdrawals decrease….(click for big) The graphic above represents MEW, or Mortgage Equity Withdrawals (cash out refinances, Home Equity Loans, etc.) [Source: Calculated Risk, Dr. James Kennedy) Credit Card Balances are Rising… Source: Wall Street Journal, Credit Crunch Moves Beyond Mortgages, August 22nd, 2007http://online.wsj.com/article/SB118773982869404682.html Talk about frying pan to fire. And, of course, with average credit card interest rates at already levels (13-18%) that make the ugliest sub-prime loan on the planet a bargain, Credit Card Issuers are raising rates:Some lenders, such as USAA, are nudging up credit-score requirements across their auto loans, credit cards and personal loans. Bank of America Corp. and Capital One Financial Corp. recently raised fees and interest rates for some of their credit-card customers. In part because of, you guessed it, rising mortgage defaults:Nationally, credit-card delinquencies are relatively low at 4% and haven’t risen significantly in the past three years. However, in certain markets, especially those that have been hit hard by a decline in home values, delinquencies have spiked higher. Might it just be that the problem is not mortgages, or credit cards, or [insert any other way to borrow], but the fact that for far too long undisciplined lenders have been catering to undisciplined borrowers, across the entirety of the lending universe (from hedge funds down to your neighbor.) It’s like a trillion dollar game of chicken, and we have a hard time imagining how it ends well for many of the participants. While we’d like to be able to say the undisciplined lenders and borrowers will get their respective comeuppance, many of the disciplined will be caught in the undertow.Credit Crunch Moves Beyond Mortgages [WSJ]Advance Q2 Mortgage Equity Withdrawal Estimate [CR]…