Hedge funds—known on the street as “vulture” funds—buying distressed mortgage loans from banks at discount prices then refinancing these mortgages into U.S. Government Insured FHA mortgage loans. These funds are probably run by the very same people who created this whole danged mess to start with. Now they’re going to ruin the FHA—an important instrument in the recovery of the housing market and the economy—the way they ruined your pension, 401k, credit, career and you-name-it what else.
Wake up call. Please someone in Washington has to get smarter about developments like these and step in before it’s too late. Washington was asleep at the switch the first time ’round, now the train of economic recovery is about to go off the rails again unless someone WAKES UP!!!
Here’s my posted comment to the NYTimes.com article:
“I’m giving money away,” said Mr. Florez, who is a 35-year-old Las Vegas native. “It’s really a feel-good business.”
This sounds suspiciously similar to the language used during the Sub-Prime boom. Are they kidding? These are many of the same people who created this mess in the first place. Now they’re going to trash the FHA the way they trashed everything else. I’m sorry, you can’t tell me that these people have anything even remotely resembling an “altruistic” motive when their profits are directly tied to the origination and closing of the new FHA mortgage.
How is it that FHA is monitoring the situation? This is exactly the characteristic of previous massive frauds perpetrated on FHA in the past (think 203k Investor loans in Florida, 1993-1994): when the “originator’s” profit motive is as strong as it is here, that’s the perfect invitation to commit mortgage fraud. The FHA cannot afford a wait and see attitude in this case; too much of the nation’s economic recovery depends on the FHA’s ability to continue to insure mortgage loans. If the FHA is damaged in any big way, kiss any hope of recovery goodbye.
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