Dave Thurman's Real Estate Blog

Citigroup paying $285M to settle SEC fraud charges

WASHINGTON (AP) — Citigroup has agreed to pay $285 million to settle civil fraud charges that it misled buyers of complex mortgage investments just the housing market was starting to collapse.

The Securities and Exchange Commission said Wednesday that the big Wall Street bank bet against the investors in 2007 and made $160 million in fees and profits. Investors lost millions.

The payment includes the fees and profit Citigroup earned, $30 million in interest and a $95 million penalty. The money will be returned to investors in the deal, the SEC said.

Citigroup neither admitted nor denied the SEC’s allegations in the settlement.

“We are pleased to put this matter behind us and are focused on contributing to the economic recovery, serving our clients and growing responsibly,” Citigroup said in a statement.

The penalty is the biggest targeting Wall Street firms that mislead investors ahead of the 2008 financial crisis since Goldman Sachs & Co. paid $550 million to settle similar charges last year. JPMorgan Chase & Co. also settled similar charges in June and paid $153.6 million.

All of the cases have involved so-called collateralized debt obligations. Those are securities backed by pools of other assets.

In a civil lawsuit filed Wednesday, the SEC said Citigroup traders discussed in late 2006 the possibility of buying financial instruments to essentially bet on the failure of the mortgage assets being put together in the deal.

Rating agencies downgraded most of the investments that Citigroup had bundled together just as many homeowners stopped paying their mortgages in late 2007. That pushed the investment into default and cost its buyers — hedge funds and investment managers — several hundred million dollars in losses.

Among the biggest losers were Ambac, a bond insurer, and BNP Paribas, a European bank. Ambac had sold Citigroup protection against losses on the investment, allowing Citigroup to bet against it.

I found this article reading [recordnet.com]

On Saturday, October 22, 2011 at 2:00 PM, you are invited to an Open House at 2335 E Lafayette Street in Stockton. For a preview of this Home, check out my site at DaveThurman.com. Please do not hesitate to Contact Me if you have any questions or wish to schedule a private showing.

2335 East Lafayette Street, Stockton CA 95205

Custom Built Home plus Rental or Guest House on double 100×115 alley lot in East Stockton near Filbert Street and Hwy 4 Crosstown Freeway. Lots of off street driveway space and garages off alley. Very secured with wrought iron fences, windows, doors and alarm service. Main house is 3-bedroom 2-bath with a bedroom converted to an office. Includes formal dining, fireplace and central heat/air. Rental / Guest House is 1-bedroom 1-bath. This is a One-Of-A-Kind property being sold by the original owner/occupant/builder. Priced right at $99,500. See a virtual tour!

Last year, more than two million people were turned down for homes, according to federal data, often because the applicants didn’t meet certain lender requirements or because their applications were incomplete or otherwise problematic.  With lenders’ underwriting criteria becoming more rigorous in recent years, it’s important buyers know the most common triggers for mortgage-loan rejection.

Making sense of the story

• Insufficient income: Lenders want to be sure borrowers can afford to make the mortgage payments.  Lenders typically look for at least a two-year track record of income, which could hurt those who have changed jobs recently.
• Cloudy financial picture: Generally, total debt payments, including the mortgage, cannot exceed 45 to 50 percent of a borrower’s adjusted gross monthly income.  Overtime and bonuses are included only if the borrower has worked for the same employer at least two years, and has a history of receiving them.
• Poor credit: Lenders typically reject applicants with FICO scores below 620.
• Low appraisal: One of the predominant reasons buyers are turned down for home loans is because the appraisal on the property is too low.  A buyer may think he or she is purchasing a house worth $800,000, but if the appraisal comes in less than that, the lender will not loan the borrower the money.
• Property problems: Sometimes issues turn up within a house, like a major repair or safety issue that needs to be addressed, before an application can be approved.
• Information mix-ups: Approximately 12 percent of new mortgage applications were denied because of unverifiable information or incomplete credit applications, according to the Federal Financial Institutions Examination Council.

Related articles

• How to Boost Your Odds of Getting Approved for a Mortgage
• More parents finance their kids’ mortgages
• First-time buyers hit by lenders’ caution
• New appraisal standards to impact mortgage rates
• Loan rejections soon to come with explanation
• I think mortgage & appraisal standards are just right
• The Top 3 Real Estate Deal-Killers – and How Buyers Can Avoid Them
• Mortgage rationing still in force
• To Understand The Benefits Of A Realty Mortgage Do In Depth Research.

On Saturday, October 15, 2011 at 2:00 PM, you are invited to an Open House at 2335 E Lafayette Street in Stockton. For a preview of this Home, check out my site at DaveThurman.com. Please do not hesitate to Contact Me if you have any questions or wish to schedule a private showing.

2335 East Lafayette Street, Stockton CA 95205

Custom Built Home plus Rental or Guest House on double 100×115 alley lot in East Stockton near Filbert Street and Hwy 4 Crosstown Freeway. Lots of off street driveway space and garages off alley. Very secured with wrought iron fences, windows, doors and alarm service. Main house is 3-bedroom 2-bath with a bedroom converted to an office. Includes formal dining, fireplace and central heat/air. Rental / Guest House is 1-bedroom 1-bath. This is a One-Of-A-Kind property being sold by the original owner/occupant/builder. Priced right at $99,500. See a virtual tour!

Hey Investors! Check out the latest from ForeclosureRadar…

After Big Jump in August, Foreclosure Starts Fall Again

1302 Grey Fox Place, Stockton CA 95205

Check out my personal website for new real estate listings and homes for sale in Stockton and San Joaquin County!

I was reading “The Stockton Record” this morning as I usually do with my morning coffee…And I was again hit with the same old housing news! Will it ever end?

Reports show years of weakness for housing

New home sales are at 50-year low

WASHINGTON (AP) — Sales of new homes fell to a six-month low in August. The fourth straight monthly decline during the peak buying season suggests the housing market is years away from a recovery.

The Commerce Department said Monday that new home sales fell 2.3 percent to a sea­sonally adjusted annual rate of 295,000. That’s less than half the roughly 700,000 that econ­omists say must be sold to sus­tain a healthy housing market.

New homes sales are on pace for the worst year since the government began keeping records a half-century ago.

High unemployment, larger required down payments and tougher lending standards are preventing many people from buying homes. Plunging stocks and a growing fear that the U.S. could tip back into another reces­sion are also keeping people from entering the housing market.

Last year was also the fifth straight year that sales have fallen. It followed five straight years of record highs, when housing was booming.

Foreclosures and short sales — when lenders accept less for a house than a mortgage is worth — are forcing prices down. Those homes are selling at an average discount of 20 percent, and they are lowering neighboring home values. That’s made many re­sales a bargain compared with new homes, creating an average 30 percent disparity in prices.

All home sales remain weak. The August sales pace for pre­viously occupied homes was 5.03 million. That’s slightly above last year’s sales, which were the fewest since 1997. Economists say roughly 6 million older homes need to be sold each year to sus­tain a healthy housing market.

Home prices have dropped more since the recession started, on a percentage basis, than during the Great Depression of the 1930s. It took 19 years for prices to fully recover after the Depression.

Related articles

• New home sales hit six-month low in August
• August U.S. new homes sales fall
• Big housing blow: New home sales fall, again
• New Home Sales Fell To Six Month Low In August
• New-home sales fell in August for 4th month
• New-home sales fell in August for 4th month
• New-home sales fell in August for 4th month
• US new house sales fall in August
• We’re On Pace For The Lowest New Home Sales Ever

Stockton Real Estate – Dave Thurman

I am very fortunate to be a member of the “Realty World” family and would like to share a little to my Customers, Clients and Realty Professionals. Why Realty World?

Thursday, September 15th 2011 ~ Realty World sponsored a special event “Leveraging the Power of Facebook” hosted by Nicole Nicolay, Co-Founder of Agent Evolution.  The event was all about Facebook when it comes to your real estate business…and how to easily connect and stay top of mind with your sphere. I found the session fast moving and interesting.

Our listings are syndicated to 550+ national Web sites and also featured at the top of Yahoo Real Estate, Zillow and Trulia.com. As of July 2011, Trulia ended the month with 16.5 million monthly unique visitors. That is why our listings get more exposure!

I would like to give a “thank you” to Rolando Valverde with Realty World Financial Services for helping many of my new customers with mortgage loan qualifications and approvals.   800.732.5414 x315   rolando.valverde@rwnc.com

Number of Homes for Sale vs. Sold vs. Pending

August 2010 there were 1237 homes for sale in Stockton, California in comparison to August 2011 where there was a decrease to 1044 homes for sale. The number of homes sold in August 2010  was 364 and in August 2011 the number of homes sold increased to 392. In August 2010 there were 422 pending sales which increased to 632 in August 2011.

More graphs and charts from our MLS and  TrendVision Reports

Hey Investors! Check out the latest from ForeclosureRadar…notice the use of the word significantly!

Foreclosure filings and sales increase throughout most of our coverage are in August. Foreclosure starts jumped significantly, reversing what had been a declining trend over the past several months. Investors bought more properties on the courthouse steps in August than in July everywhere except in Washington. The number of properties Sold Back to Bank jumped significantly in Oregon, and also rose in California and Nevada.

Foreclosure starts (the first notice filed, either a Notice of Default or Notice of Trustee Sale depending on the state) rose in every state. This appears to have been primarily driven by Bank of America and related entities, where we saw an overall 116 percent increase from July to August. Wells Fargo and US Bank also saw an increases in foreclosure start filings, while filings by JP Morgan Chase and Citibank were essentially flat.

“Bank of America appears to be primarily responsible for the surge in foreclosure starts this month,” says Sean O’Toole, Founder and CEO of ForeclosureRadar.com. “Since their average time to foreclose has recently increased to more than a year, it is unclear that these foreclosure starts will lead to an increase in foreclosure sales anytime soon.”

California

Notice of Default filings increased 69.5 percent to the highest level in a year. Notice of Trustee Sale filings were up more moderately, rising 6.0 percent month-over-month, but down 23.6 percent year-over-year. Cancellations were nearly flat, up just 1.9 percent from July. Activity on the courthouse steps increased in August. Properties Sold Back to Bank (REO) increased 12.3 percent from the prior month. Properties Sold to 3rd Parties rose 9.9 percent month-over-month, and 10.8 percent year-over-year. Time to Foreclose increased to 333 days in August, which is 49 days longer than a year ago.