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Reports over here is that the FBI is investigating 14 companies embroiled in the sub-prime mortgage crisis as part of a crackdown on improper lending.

It did not identify the companies but said the investigation encompassed developers, sub-prime lenders and investment banks.

FBI officials said the agency was looking at instances of accounting fraud and insider trading.

The cases could lead to potential civil or criminal charges, the FBI said.
 

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Not surprising at all. Did anyone happen to see the 60 Minutes segment this past Sunday on the housing market? It used Stockton, CA as an example. All I can say is WOW. I knew it was bad, but didn't realize just how bad it really is. Major banks are involved that never verified any buyer information. And gave buyers 110-120% loans left and right. You want money, well here you go. What a major fleecing of America. Now there are thousands of inventors holding worthless mortgage securities!! Not to mention the foreclosure market heating up...
 

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I'm not absolutely sure, but I think Washington Mutual (WAMU) is presently embroiled in the same or a similar "scandal"
 

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That's only the very tip of the ice berg.
What about all the values of the houses that were over inflated, now on permanent record as to the sale.............this impacts the market value hugely and forever.

I know of several lenders that gave loans for 1.5mil on houses that were valued at 800k, the lender financed full value of 1.5m, giving the difference back to borrower, and the borrower taking the 700k cash and never making a payment on the house...............this was real common last year.........thus creating a sale of the house at 1.5 mil for permanent record........think about how this would affect the housing market...........
 

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The media always focuses on the worse areas of the country for their news stories.

The Pacific Northwest IS NOT in a housing crisis. I repeat NOT IN A HOUSING CRISIS! Do not believe that what you read or hear applies to the Puget Sound region. House prices are rising at a small yet acceptable rate of about 3 percent as opposed to the years past of up to 15+. Although we have slowed, what the media portrays does not apply in our local markets...

FACTS;

Foreclosures are very few and far between in comparison to the overall inventory.

Foreclosures rates are the same today as they were 10 years ago.

Less than one percent of all loans end in foreclosure in Washington State.

Sub-prime loans only account for 20% of loans Nationally and only 6 percent in Washington State.

There are only 26 HUD repossessed homes in the entire State of Washington. One in King County and two in Pierce.


If you want the real scoop on our local markets contact me personally by phone or by email so you're not lost in the world of doom and gloom reporting that DOES NOT APPLY to our area. Tup:

Values in any given area are, to date from the previous six month period. In other words, as sold homes drop off the charts, so to speak, daily ,they are no longer used in a market analysis or appraisal. SO if a home sold for 20,000 less because it was a REO, foreclosure or distress sale, OR if a property was sold for above value, that sales data wouldn't impact the figures after 6 months. They do not impact the market data forever... Tup:
 

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I can't say I feel too sorry for the borrowers that took out some of those inflated loans. Many people bet that they would be able to sell their house for a profit or get a new loan at a decent rate before the loan rate adjusted upward. They knew what they were doing, and the gamble didn't pay off. Now we're supposed to feel sorry for them because they can't afford the mortgage they took out. Hard lessons, but important ones. Don't gamble with borrowed money, and don't buy what you can't afford.
 

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Lucky for us eastsiders, we're in pretty much a bubble here, other areas have flattened out and even depressed a bit, but the market will pick back up for areas in the greater Seattle area.
When it comes to first time home buyers, ignorance is not always bliss.
 

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David said:
I can't say I feel too sorry for the borrowers that took out some of those inflated loans. Many people bet that they would be able to sell their house for a profit or get a new loan at a decent rate before the loan rate adjusted upward. They knew what they were doing, and the gamble didn't pay off. Now we're supposed to feel sorry for them because they can't afford the mortgage they took out. Hard lessons, but important ones. Don't gamble with borrowed money, and don't buy what you can't afford.
Exactly,I get really tired of people that can't take responsibilty for the crap they get themselves into.
 
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