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Government moves to convert foreclosures to rentals
The government is looking to sell off some of its stock of homes in foreclosure.
The Federal Housing Finance Agency has control over roughly 250,000 foreclosed homes owned by Fannie Mae. One percent of those homes, or 2,500, will be available for investors to buy and convert into rentals.
Officials say the foreclosure-to-rental program can help reduce credit losses and stabilize home values. Homes in foreclosure sell at a 20 percent discount on average, which can hurt surrounding home values.
Mortgage relief faces a tax-law nightmare
Given the huge public and private resources now being devoted to helping financially distressed homeowners — including the recently announced $25 billion national mortgage settlement with five major banks — you might assume that a key federal tax-law benefit underpinning these efforts would be a shoo-in for renewal.
But it’s not. The Mortgage Forgiveness Debt Relief Act is set to expire in 10 months, and there are early indications on Capitol Hill that it might not make the cut. The law, first enacted in 2007, allows homeowners who have received principal reductions on their mortgages as the result of loan modifications, short sales or foreclosures to avoid income taxation on the amounts forgiven.
Read More on The Seattle Times…
Are you a struggling homeowner? Check out our Avoiding Foreclosure section for resources and tips.
Citigroup pays $158M to settle mortgage fraud
Citigroup has agreed to pay $158.3 million to settle claims that its mortgage unit duped the U.S. government into insuring risky mortgage loans for over six years.
The government said Wednesday that Citi Mortgage certified 30,000 mortgages for insurance provided by the Federal Housing Agency and submitted many certifications that were “knowingly or recklessly false.”
More than a third of those mortgage loans went into default, resulting in millions of dollars in losses for the government because of the insurance claims.
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