Fianlly, someone is getting a little slap on the hand for inflating ratings on mortgage investments to boost their profit. The U.S. Government is taking on the key player who was responsible with the real estate bubble as well as our current financial crisis.
Charges were filed on Monday in a Los Angeles federal court. The Justice Department has issued that Standard & Poor’s gave high marks to mortgage-backed securities that later went sour, even though they knew they were bad. They misrepresented the risks because they wanted more business from the banks.
There is a built in conflict of interest because they are paid by those they are providing ratings for. Talk about a scam! Dodd Frank didn’t help the issue, but the SEC is no overseeing the credit rating companies like S&P.
“Put simply, this alleged conduct is egregious — and it goes to the very heart of the recent financial crisis,” Attorney General Eric Holder told a news conference Tuesday. He called the case “an important step forward in our ongoing efforts to investigate and punish the conduct that is believed to have contributed to the worst economic crisis in recent history.”
FINALLY!!!! 16 states have followed suit and hopefully more will file lawsuits against the S&P.
S&P blames the government for failing to predict the subprime mortgage crisis.
The government’s lawsuit states that “S&P’s desire for increased revenue and market share … led S&P to downplay and disregard the true extent of the credit risks” posed by the investments it was rating.
LETS SEND THEM ALL TO JAIL!
The action unfortunately does not involve any criminal allegations… Since they would require a higher burden of proof, I guess the key players will still get off the hook with their billions in the bank.
posted in Appraiser News |
Freddie Mac and Fannie Mae provided the January 2013 Uniform Appraisal Dataset (UAD) Update and Uniform Collateral Data Portal (UCDP) Release Notification to announce the first phase of the conversion of current UAD compliance warning edits to fatal UAD edits in the UCDP. The first phase, targeted for implementation in June 2013, includes the following data fields:
• Appraisal effective date.
• Subject contract price/Comparable sale price.
• Above grade Gross Living Area (GLA) (subject and comparables).
• Sale type (subject and comparables).
Originate and underwrite, sell and deliver
If an appraisal submitted to the UCDP receives one or more fatal UAD edits, it will result in Hard Stop 401 (UAD Compliance Check Failure) and a “Not Successful” status will be issued in the UCDP. If the lender or appraisal vendor receives a “Not Successful” status in the UCDP, the lender or appraisal vendor must resubmit a corrected appraisal with the required data in the correct format to ensure a “Successful” status.
In addition, in order to ensure the UAD data submitted to the UCDP is of high quality and compliant with the government-sponsored enterprises’ (GSEs) data standards, the GSEs announced their intent to discontinue accepting appraisals in PDF and other alternative appraisal formats and to accept only the MISMO file format in the UCDP. The GSEs have initiated conversations with key vendors associated with the non-MISMO XML formats and they will work closely during 2013 with lenders and vendors using these formats to ensure a smooth migration path for lenders. Once a retirement date has been determined the GSEs will provide at least six months’ notice of any formal retirement. The GSEs will provide more updates on our progress throughout the year.
For more information, including a complete listing of the first phase of fatal UAD edits, refer to the January 2013 UAD Update and UCDP Release Notification on FreddieMac.com.
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posted in Appraiser News |