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Does the mortgage settlement protect banks from additional lawsuits?

After the massive mortgage settlement between federal and state agencies with the big banks, can the government continue suing the banks, or are they protected under the settlement?

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Can Wells Fargo be sued again after the mortgage settlement?

A new federal lawsuit filed by the Manhattan U.S. Attorney’s office accuses Wells Fargo of a decade of illegal behavior in connection with mortgages insured by the Federal Housing Administration (FHA), which the bank asserts contravenes the terms of the historic $25 billion mortgage settlement between the nation’s largest banks, 49 states, and the federal government for illegal foreclosure practices.

In a letter to U.S. District Judge Rosemary Collyer, who approved the settlement, Wells Farogs’ lawyers plead that the settlement “”wiped the slate clean for Wells Fargo in terms of facing any further liability to the United States (except in carefully crafted, narrow circumstances) for a wide range of Wells Fargo conduct relating to its Federal Housing Administration mortgage loan portfolio, among other areas.”

The letter continued, “Wells Fargo committed billions to the United States in [the $25 billion mortgage settlement] and should be able to rely on the United States to observe and abide by its commitments and representations.”

The bank argues that the settlement disallows the government from filing additional cases against the banks based on the FHA program, unless it is shown that an individual underwriter at Wells Fargo (or other banks that settled) knowingly certified that an individual loan met FHA eligibility requirements, when it did not.

Government seeking hundreds of millions of dollars

The Manhattan case seeks damages for hundreds of millions of dollars in FHA insurance claims paid by the government for mortgages that they allege Wells Fargo originalted, underwrote, and wrongfully certified, which later went into default, costing the government big bucks.

“First, between May 2001 and October 2005, Wells Fargo engaged in a regular practice of reckless origination and underwriting of its retail FHA loans,” the U.S. Attorney’s office charged. “Nonetheless, Wells Fargo certified that over 100,000 retail FHA loans met HUD’s requirements and therefore were eligible for FHA insurance.”

Additionally, the government alleges that starting in October of 2005, for the next six years, the bank hid thousands of mortgages from HUD that it was legally required to report, even though its own reviews unveiled that the loans never met FHA underwriting standards.

According to court documents the government claims, “As a result of Wells Fargo’s intentional concealment of the 6,320 loans internally identified as containing material violations, Wells Fargo avoided indemnification to HUD on approximately $190 million dollars in FHA benefits paid on claims for defaults on those loans.”

Wells Fargo requested that Judge Collyer block the lawsuit, as they expect the government to oppose the request.

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

Austin

Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?

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Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

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Housing News

Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.

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aging housing inventory

The average home age is higher than ever

(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.

With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

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Housing News

Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.

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Why Realtors are vulnerable to these rapid changes

(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.

2. Two major media brands emerge

Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.

…Click here to continue reading this story…

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