Tax ruling could affirm sovereignty

NEW YORK - In a turnaround from previous promises - or threats - to collect state taxes on tribal cigarette sales, the New York state attorney general's office is seeking a declaratory judgment verifying that tribal nations and the distributors who sell them cigarettes are exempt from paying tobacco excise taxes.

The ruling, if granted, could be a de facto affirmation of tribal sovereignty and immunity; but tribal leaders expressed wariness in their response to the legal action - perhaps understandably, since the state's motion is not necessarily

motivated by a pure intention to support Indian sovereignty and immunity, but appears to be a tactic driven by the desire to avoid further lawsuits from the big tobacco companies.

A positive ruling could put to rest years of struggles between the tribes and state for tax sovereignty, and reaffirm previous court decisions.

Freddie Mac Moves to Contain Subprime Fallout

Facing shaken financial markets over growing subprime lender bankruptcies and warnings, big bank (HSBC, New Century) reports of record subprime losses and Congressional hearings into predatory subprime lending, government-backed mortgage buyer/lender Freddie Mac announced Tuesday that effective Sept. 1, it would no longer buy subprime mortgages with excessive payment resets or high default probability. Freddie Mac will now require stricter salary documentation and repayment capability proof, and will only buy teaser rate loans where borrowers qualify for the higher reset rate. The firm is developing alternative subprime loans with longer fixed-rate terms, and is also encouraging prime loan practices by setting up escrow accounts for borrowers tax and insurance payments. The ABX index tracking BBB- subprime mortgage-backed bonds has risen 250% since November, to 1,400 basis points.

Proposed escrow legislation worries banks

State-chartered banks are worried that proposed legislation requiring them to pay interest on escrow accounts would unfairly change Alaska's mortgage marketplace, while the legislator who crafted the bill said it would give millions back to Alaska homeowners.

House Bill 33, by Rep. Jay Ramras, a Fairbanks Republican, would require "covered institutions" to pay interest on reserve or escrow accounts created to pay property taxes, insurance and other payments related to mortgage loans.

However only four banks in the state would have to implement the conditions of the bill, because the state cannot regulate the 12 credit unions or the five federally chartered banks with Alaska branches.

That leaves Mt. McKinley Bank and Denali State Bank, based in Fairbanks; Northrim Bank of Anchorage; and First Bank, based in Ketchikan.

Banks, civil rights groups and community members should lobby ...

A number of individuals, businesses, and organizations have had their bank accounts closed due to so-called "suspicious account-related activity." The suspicion causes the compliance department to recommend account closure.

This is not happening only to Arab Americans and American Muslims. A few weeks ago, I was at a meeting in Washington that centered on the issue of charities in the U.S. A non -Arab/non-Muslim resident attorney who attended the meeting spoke of his Saudi clients and shared a story about his bank experience. He said that he receives wired funds to his escrow account from Saudi Arabia for his legal fees. His bank sent him a notice stating that it intends to close his escrow account. He found out that the funds from Saudi Arabia were the reason. The cost-benefit analysis of the bank showed that closure of the red-flagged account was the bank's best bet.

Tenants still have rights while landlord goes into foreclosure

In general, a lease entered into before the mortgage is in place is ordinarily not affected by foreclosure.

But a lease entered into after the mortgage was in place is terminated by the foreclosure the moment the landlord's interest in the property expires - typically, six months from the date the property is sold.

This six-month period is known as the redemption period the time in which the landlord may buy back his interest in the property.

Does the tenant have a right to continue occupying the premises after the property is sold?

Fortunately, tenants may continue to reside in the premises after the sale.

They must continue to pay rent.

Because the purchaser does not obtain title to the property until the end of the redemption period, the tenant should pay rent to the landlord, not the purchaser.

Escrow payments are often waste of money

Most people keep up well enough with their monthly bills. So why do so many homeowners allow mortgage lenders to pay their real estate tax and insurance bills for them?

That is the proposition at the core of mortgage escrow services, in which lenders collect money on the borrower's behalf as part of the monthly mortgage payment, then use those funds to pay the borrower's real estate taxes and homeowner's insurance, usually twice a year.

Government-insured loans such as those backed by the Federal Housing Administration or the Veterans Administration mandate escrow accounts for borrowers, mostly because they eliminate the risk that a borrower will default on taxes or fail to insure the house.

Borrowers with less than 20 percent equity in their homes must also use escrow accounts, except in California, where the threshold is 10 percent

Lawsuits targeting mortgage schemes

Big lenders and Wall Street investors are going after Arizona mortgage brokers, appraisers, real estate agents, title firms and home buyers for fraud. Dozens of civil lawsuits alleging the gamut of mortgage fraud, from cash-back deals to lying about income on loan documents, have been filed against Valley firms and individuals during the past few months. Fraud experts and regulators say the lawsuits are only the beginning as the fallout from mortgage fraud starts to hit the Valley. Cash-back scams involve getting a mortgage for more than a home is worth and pocketing the extra money. The deals inflate home values and leave lenders with losses from loans worth far more than the house itself.

Flagship Credit Corporation Signs Agreement with Finance Express

Finance Express, the leading provider of web-based financial services and Dealer Management technology for independent auto dealerships, and Flagship Credit Corporation, a national, indirect auto financing provider focused on near-prime buyers, today announced that Flagship Credit Corporation has entered into an agreement to join the Finance Express online auto finance program.
"Our new relationship with Finance Express brings us several steps closer to realizing our vision of becoming the industry's prime source for near-prime financing," said Thomas R. Stillman, Chief Operating Officer, Flagship Credit Corporation. "The benefits that Finance Express provides will help us better provide our dealers with the fast, flexible access to information that their success demands."
"We're pleased to add a progressive near-prime auto finance company such as Flagship to our platform," expressed David Huber, President of Finance Express.

Freddie Mac Tightens Mortgage Purchases

Mortgage giant Freddie Mac said Tuesday it will no longer buy those high-risk home mortgages that it deems to be the most vulnerable to foreclosure. The surprise move came amid a deteriorating market for subprime loans affected by slumping home prices and rising interest rates
The government-sponsored company, which is the second-biggest financer of home loans in the United States, said it will begin using stricter standards for mortgages that it buys -- including limiting the use of loans requiring less documentation of the borrower's status than conventional mortgages. The goal is "to help ensure that future borrowers have the income necessary to afford their homes," McLean, Va.-based Freddie Mac said.
"The steps we are taking today will provide more protection to consumers and enhance the level of underwriting standards in the market," Richard Syron, the company's chairman and CEO, said in a statement.

Grand jury indicts eight on $14 million mortgage fraud scheme

A federal grand jury has returned an indictment charging eight defendants with various charges related to a mortgage fraud scheme they operated in the Dallas area. Seven of the defendants were arrested at various locations throughout the metroplex and in Hawaii. One defendant has surrendered to authorities. The 17-count indictment, returned this week in Dallas, charges each of the defendants with conspiracy. Defendants Donald L. Jones, a/k/a “Don Jones,"61, of Grapevine, and Joseph B. Jackson, Sr., a/k/a “Joseph Jackson," 63, of Irving, are also each charged with ten counts of wire fraud and six counts of bank fraud. Donald L. Jones and Joseph Jackson represented themselves as real estate investors who owned and operated Affordable Homebuilders and the YIN Group in Irving.
Donald Matthew Jones, a/k/a “Mat Jones," 35, of Maui, Hawaii, is also charged with three counts of wire fraud.

Managing money after home is bought

The potential pitfalls of home buying don't disappear when the purchase offer has been accepted and the loan has been lined up.
As you may have guessed, most of them have to do with managing money. A few pointers:
Don't buy any high-priced items on credit before closing the home purchase, or you might not qualify for your mortgage anymore. Lenders will look at that new debt - a car loan, for example, or lots of furniture charged to a credit card - and judge that you are less able to take on mortgage debt. And don't spend a large chunk of cash, either, if you might need it for closing costs.
Expect to get a "supplemental" property tax bill from the county tax collector soon after you've purchased your home. This bill is for the difference between the amount of tax the former owner paid and the amount you will be paying, prorated according to when you bought the house.

Freddie Mac Rejects Riskier Mortgages

WASHINGTON - Mortgage giant Freddie Mac said Tuesday it will no longer buy high-risk home mortgages it deems to be the most vulnerable to foreclosure. The surprise move came amid a deteriorating market for subprime loans affected by slumping home prices and rising interest rates.
The government-sponsored company, the second-biggest financer of home loans in the United States, said it will begin using stricter standards for mortgages that it buys - including limiting the use of loans requiring less documentation of the borrower's status than conventional mortgages. The goal is "to help ensure that future borrowers have the income necessary to afford their homes," Freddie Mac said.
"The steps we are taking today will provide more protection to consumers and enhance the level of underwriting standards in the market," Richard Syron, the company's chairman and chief executive, said in a statement.

Novato cools inspection concerns

The Marin Association of Realtors and Novato officials have been working to mend the group's concerns over the city's residential resale inspection program, including inconsistencies and delays in inspection reports.
The association first brought the issues to the city's attention in September, and the situation has "greatly improved" since then, association president Valerie Castellana said. She said she wanted to address the City Council on Monday to clarify concerns and recommended solutions.
Castellana said some of the association's 1,700 members had observed inconsistent inspections of residential properties and noted instances in which inspections were delayed for six weeks or more.
"With escrow periods of 30 days, sometimes shorter, the wait for a Novato inspection process has caused delays in sales - to the detriment of buyers and sellers," Castellana said.