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Florida Lawmaker Investigating Lenders for Home Equity Loan Fraud

Florida's incoming Senate President Mike Haridopolos is calling for a round of hearings to investigate claims that banks are ""squeezing"" borrowers by fraudulently reducing Home Equity Lines of Credit (HELOC) to improve their bottom lines. Federal regulations permit HELOC suspensions when properties suffer a significant decline in value - which is certainly the case in Florida markets. But Haridopolos says homeowners are claiming banks have been using false pretenses to freeze lineS of credit and call in home loans.

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TAVMA Opposes New Consumer Protection Bill

In an announcement Monday, the Title/Appraisal Vendor Management Association (TAVMA), a nonprofit professional organization that represent more than 75 companies, said it opposes the proposed federal and state legislation that would dismantle new federal safeguards designed to protect appraiser independence and provide unbiased appraisals to homebuyers and lenders.

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House Leader Pushes for GSEs’ End

House Financial Services Committee Chairman Barney Frank says he will be recommending Congress close the doors on the government-backed mortgage giants Fannie Mae and Freddie Mac and rebuild the nation's housing finance system from ground zero. According to Frank, who has long been one of the GSEs' biggest proponents on Capitol Hill, the two firms cannot continue in their current form and his committee plans to propose killing off the enterprises completely rather than taking a ""piecemeal"" approach to their restructuring.

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Regulators Seize Control of Five Community Banks

The number of regional bank closures has already begun to pick up speed. Regulators have shuttered five more community-based financial institutions - in Florida, Missouri, New Mexico, Oregon, and Washington. The FDIC is making moves that indicate it expects another year of elevated bank closings. The agency is opening a satellite office in suburban Chicago to help manage receiverships and liquidate assets from failed institutions in the Midwest, similar to offices it has already set up in California and Florida.

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Government Agency Sees Moderation in Reports of Mortgage Fraud

After six straight years of double-digit growth, lenders' reports of suspected mortgage fraud remained relatively flat during the first half of 2009, according to a new government report. The Treasury's Financial Crimes Enforcement Network (FinCEN) said depository institutions reported 32,926 cases of possible mortgage fraud in the first six months of last year - just a 1 percent increase over filings during the same period in 2008.

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FHA to Provide Early Relief to Struggling Homeowners

In an announcement Friday, HUD said homeowners with mortgages insured by the Federal Housing Administration (FHA) who are experiencing financial hardship are now eligible for loss mitigation assistance before they fall behind on their mortgage payments. Previously, these homeowners were not eligible for such assistance until after they had missed payments.

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State Regulators Say Federal Foreclosure Prevention Program Falls Short

Top officials from across the country warned policymakers in Washington this week that efforts to stem the housing crisis are falling short. According to a group of state banking regulators and attorneys general, six out of 10 seriously delinquent borrowers are not involved in loss mitigation efforts. Perhaps the most divisive proposal put forth by the group is that government programs should make principal reductions a priority in areas where home prices have plummeted.

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Bair Says CRE Woes Aren’t Confined to Small Banks

For months, analysts and industry experts have assured the markets that the downturn in the commercial real estate (CRE) sector won't be enough to send the financial system into a second crisis - that it won't be the dreaded next shoe to drop because exposure is isolated to smaller, community banks. But FDIC Chairman Sheila Bair says that's not an accurate assessment.

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Obama Proposes New Limits on Big Lenders

In public remarks Thursday, President Obama said he wants to give federal regulators the power to restrict the size of the nation's largest financial institutions and the scope of their risk-taking ventures, such as investing in hedge funds. The phrase that became vogue at the onset of the financial crisis when Washington was crafting its bailout policies too big to fail has become a sticky cliche begrudged by Main Street taxpayers and lawmakers alike.

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FHA Makes Extensive Policy Changes to Address Default Risk

The Federal Housing Administration (FHA) said Wednesday that it is raising homebuyers' up-front costs for mortgage insurance, tripling downpayment requirements for borrowers with low credit scores, and cutting seller concessions in half. The agency says the new policies will help it better manage loan risk and losses. According to FHA's latest monthly activity report, nearly 9 percent of the single-family mortgages it insures against default are at least 90 days past due.

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