Hillsborough County Fallout?

Seal of the United States Federal Housing Fina...

Where's the money?

Any chance that fallout from the national robo-signing and fraudulent bank mortgage investigations might have any negative impact on Hillsborough County for all the “bundled” mortgage-backed securities that came out of the County Housing Finance Authority?

Recall last year’s Hillsborough BOCC consent agenda approval of County Housing Finance Authority’s additional $250 MILLION finance plan “…for the purpose of providing funds for the purchase of qualifying mortgage loans…”

The Department of Housing and Urban Development and other agencies provided the 50 state attorneys general a report on robo-signing practices at the largest mortgage servicers (such as Mortgage Electronic Registration Systems, commonly called MERS and the Nationwide Title Clearing company in Pinellas County).

Counties across the United States are discovering that illegal or questionable mortgage paperwork is far more widespread than first thought, tainting the deeds of tens of thousands of homes dating to the late 1990s.

black hole moneyThe AGs launched a multistate investigation into mortgage servicers in October when evidence of forged and mishandled foreclosure documentation surfaced in state courts. HUD and the Federal Housing Administration launched their own investigation of their servicers in early 2011.

Federal regulators launched a broad legal assault on big banks Friday, claiming they sold nearly $200 billion in fraudulent mortgage investments to housing giants Fannie Mae and Freddie Mac that led to massive losses during the financial crisis.

The suits, brought by the Federal Housing Finance Agency, name 17 domestic and foreign banks as defendants.

Among them: Bank of America, J.P. Morgan Chase, Goldman Sachs, Morgan Stanley, Citigroup and Deutsche Bank.

According to the court filings, those firms and others “falsely represented” the quality of the loans that were bundled into securities and sold to investors and “significantly overstated the ability of the borrower to repay their mortgage loans.”

The result, the suits claim, were investments that were far riskier than the banks led taxpayer-backed Fannie and Freddie to believe, and the securities ultimately were worth a fraction of their original value.

Maybe Hillsborough County should get ahead of this and look into its own fiscal closet for the trail of the promissory notes for those mortgages held before they were sold to investors.

<IMHO> Fred Jacobsen

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