Murder Suspect Tries Mortgage Scam In Attempt To Obtain & Flee With Proceeds

CourierPostOnline.com reports that a New Jersey man facing a murder charge reportedly (and apparently free on bond) plotted with two others to sell a home in Laurel Springs, New Jersey without the property owner's knowledge. Prosecutors claimed that the murder suspect planned to use the proceeds of the phony sale to flee to avoid his murder trial. He was nailed on the mortgage fraud in Federal court and awarded an 83 month visit to Federal prison (said visit was dwarfed by the 64 years in state prison that he got upon his conviction in state court of the murder charge). For more, see Appeals court upholds Camco murder conviction.
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Federal Government Fumbles The Ball On Electronic Data Protection

The Federal Government's loss of electronic data stored on laptops, external hard drives, etc. is exposing tens of thousands of people to the risk of identity theft. Personal identification information such as names, addresses, social security numbers, dates of birth, etc. of former and current government employees as well as the information of citizens, generally, is being exposed in alarmingly high numbers. For more on Federal government organization losing things, see:

• Identity theft continues to haunt the American people,
• Recent Cases of Missing Data.

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Are Subprime Borrowers In Trouble "Qualified" For Victimhood?

Bloomberg News columnist Michael Lewis offers a perspective on the subprime mortgage lending collapse that questions the "victimhood" of those homeowners who bought homes they couldn't afford to buy by borrowing money they couldn't afford to repay. For more, see Subprime mess produces unqualified victims (It’s easier to blame the lender who offered the loan than the borrower who couldn’t repay it), reported in Daily Report.
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Detroit Man Cops Fraud Plea; Lenders Out $21.7 Million

Kalil Khalil of Dearborn, Michigan pleaded guilty in a Michigan Federal Court earlier this week to one count of wire fraud in connection with a scheme to defraud mortgage lenders out approximately $21.7 million. Tariq Hamad, a Khalil associate, pleaded guilty before the same Federal judge to the same wire fraud scheme back in December.

The loan packages submitted to banks were fraudulent in one or more of the following ways:

• loan purpose was not to buy or refinance a residence; borrower described on application was not the true borrower; false description of borrower's employment; bogus documents used to prove borrwers' employment; inflated and forged appraisals; property title not free and clear, use of straw title company purporting to insure clear title; photographs included in loan package were not of the subject property.

For more, see the U.S Attorney Press Release, Dearborn Man Pleads Guilty In $20 Million Mortgage Fraud.
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More On Sacramento Area Alleged Mortgage Fraud Scam

This is a follow up post on KCRA Channel 3's investigative mortgage fraud report by Josh Bernstein involving homes in Elk Grove, California to supplement the May 2, 2007 post on this blog (Sacramento Area Real Estate Group Accused Of Duping Investors).

A May 10 report by KCRA Channel 3 reports that:

• "Many industry insiders have been sounding off about [Jim] Martin and his partners and are calling for a federal investigation. Mike McGee, past president of the California Association of Mortgage Brokers, said Martin and others deserve to be prosecuted. Since KCRA 3's investigation, Martin and his partners have switched business names. They are now operating at Esnian Mortgage and Realty Network."

Those reportedly involved in the alleged mortgage fraud operation include:

• Jim Martin, VFM Investment Group LLC, Gabriel Viramontes, Freedom Capital Mortgage, Inc., Joseph S. Gallo, Esnian Mortgage & Realty Network, Mario Fellini III, real estate agent Yajen Huang - aka Jennifer Huang, and others.

For more, see Mortgage Brokers Association Condemns Real Estate Scheme (Investment Organizers Now Doing Business As Esnian Mortgage)

Go here to watch the latest KCRA report (no longer available online).

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For previous online reports from KCRA on the Elk Grove mortgage fraud, see:

• Investors Say They Were Duped In Real Estate Scam (Many File Lawsuits Alleging Fraud, Conspiracy) April 30, 2007
• Real Estate Scheme Probably Broke Laws, Expert Says (Investors Say They Were Tricked) May 1, 2007
• Foreclosures Hurting Local Property Values (Many Homeowners Forced To Take Loss) May 2, 2007

To watch the previous KCRA Channel 3 Elk Grove mortgage fraud TV reports by Josh Bernstein (no longer available online):

• Elk Grove Mortgage Fraud Part 1
• Elk Grove Mortgage Fraud Part 2

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More Foreclosure Rescue Victims Fighting Back

WSVN-TV Channel 7 in Miami reports on two cases of financially strapped homeowners who unwittingly signed away their homes and who decided to fight back. In one case, attorney Carol Lombardi of Legal Services of Greater Miami, who has been involved in maybe 15 or 20 of these types of cases, successfully brought legal action against foreclosure rescue operator Hencile Dorsey to take back the home he took from Lombardi's client.

In another case, South Florida attorney James Brady has filed suit on behalf of a husband and wife who unwittingly signed over their home to Florida Housing Council, another local foreclosure rescue operator.

Jack Moussa of the Florida Housing Council has taken the position that the homeowner needs to follow the contract they signed, pay the trust $160,000 for its work and they will get the house back in their names. According to Moussa, "They are quite aware of the American system. They do realize what a contract is."

For more, see Home Heartache.

Postscript

I don't know what law school foreclosure rescue operator Jack Moussa of Florida Housing Council went to, but he better hope that all the judge does is order him to give back the home to the victims. If a judge finds that his forecloure rescue arrangement should be recharacterized as an equitable mortgage / disguised loan, and a judge calculates his "profit" on the deal to be more than 18% per annum, he may be found to have violated Florida's civil usury statutes (Section 687.03, Florida Statutes). Further, if Mr. Moussa's "profit" is calculated to be more than 25%, he potentially stands to forfeit any money he invested in the arrangement (and he also may be getting a visit from local prosecutors regarding possible criminal misdemeanor charges; "profit" over 45% per annum could result in felony charges; see Section 687.071, Florida Statutes).

See:

• Equitable Mortgage & Usury In Sale Buyback Deals In Florida,
• More On Equitable Mortgage & Usury (Florida).
• Go here for more on the Florida case law on equitable mortgage, generally (some of which also addresses usury), to consider how the case law may be applied to foreclosure rescue transactions structured as a sale leaseback, or variations thereof, with a right to buy back the property in the future. equitable mortgage yak

Upstate NY Feds Get Guilty Pleas From Two In Flipping Scam; 54 Deals Involved

The Albany Business Review reports that Matthew Kupic and Francis Disonell, both of Clifton Park, New York and owners of Team Title Abstractors and Real Estate Consultants, have pleaded guilty in Federal Court to bank fraud and income tax evasion for their roles in a mortgage fraud scam. Reportedly, the two men have agreed to forfeit $600,000 each, according to U.S. Attorney Glenn Suddaby.

The scam appears to be the typical, standard, run-of-the mill mortgage fraud operation that scam artists are getting nailed for all over the country (ie. excessive mortgages for residential properties, use of phony loan applications, sales contracts, settlement statements and other documents, flipping, use of straw buyers who apparently were left "holding the bag", diversion of funds for personal use, etc.).

The two men reportedly diverted $1.9 million to themselves and others out of a total of approximately $3.6 million in fraudulently obtained mortgage proceeds in 54 real estate deals; most of the properties involved soon ended in foreclosure.

For more, see Guilty pleas in mortgage fraud case.
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New Jersey Legislature Targeting Foreclosure Rescue Scams

The introduction of a two-bill package aimed at mortgage and foreclosure abuses is on the agenda in the New Jersey legislature, according to PoliticsNJ.com. One bill would counteract foreclosure rescue scams that have been on the rise across the country. The other is aimed to better protect consumers who might be tempted to sign onto mortgages with tantalizingly low initial interest rates - "teaser rates" - that balloon to unaffordable levels in a few short years, forcing bankruptcies for borrowers. For more, see Two-Bill Package Crafted to Protect Consumers from Fallout of Subprime Mortgage Meltdown.

For more information on legislation being considered in New Jersey aimed at foreclosure rescue fraud, check New Jersey Legislature for:

• Assembly Bill A4214 - "Foreclosure Rescue Fraud Prevention Act"
• NJ Senate Bill S2699 - "Foreclosure Consulting and Anti-Fraud Act"

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Congress Struggling With Mortgage Reforms

The Associated Press reports of the struggle in one U.S. House of Representatives Congressional subcommittee trying to address possible mortgage reforms relating to the trouble in the subprime mortgage industry, reporting:

• "[L]awmakers are weighing whether new lending rules are needed or whether the market is already in the process of self-correcting. The task of crafting reforms is made more complicated by the long list of players involved in mortgage transactions."

This comes on the heels of U.S. Senate Banking Committee Chairman Christopher Dodd's emphasis that increased regulatory oversight and voluntary reforms by lenders are preferable to legislation.

For more, see Congress debates mortgage reforms.

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Five Charged in Bay Area Mortgage Scam

In California, CBS-TV Channel 5 reports that a 73-count felony complaint was filed in Alameda County Superior Court charging five people in connection with a complex real estate fraud scheme involving seven homes in Oakland through which they allegedly stole more than $3.5 million. Charges against the defendants include grand theft, identity theft, filing false documents and forgery.

Those named in the complaint include Amy Schloemann and Karim Akil, also known as Scott Kinney, the husband and wife owners of Hiddenbrooke Mortgage in Vallejo. Others charged are Hiddenbrooke Mortgage employee Michelle McGuirre, Financial Title escrow officer Wonda Kidd, and Gregory Lamont Orr, the owner of G.L.O. Enterprises, Inc.

Elements of the alleged scam include artificially inflated home values, creation of false documentation for loans by using false addresses, fake bank accounts and forged documents, use of the identity of local real estate brokers and individual citizens without their knowledge to make the transactions look legitimate, and the diversion of the fraudulently obtained loan proceeds to the alleged co-conspirators. New Century Mortgage and Right-Away Mortgage were the reported victims of the fraudulent loan applications.

For more, see Vallejo Mortgage Co. Charged With $3.5M In Fraud.
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Las Vegas Man Files Suit In Loss Of Home In Foreclosure Rescue Deal

KLAS-TV Channel 8 in Las Vegas, Nevada is reporting on the story of a local homeowner who lost his home to a foreclosure rescue operator. The victim has brought suit against the operator and others for breach of contract, bad faith, fraudulent misrepresentation, civil conspiracy and wrongful eviction, among other claims.

The lawsuit alleges that Ken Ragle, aka Kenneth Ragle, the president of a company called Dreamscape Solutions, agreed to purchase the victim's home for $233,000. The deal would stop the pending foreclosure and offer the homeowner the chance to stay put. He would then rent the house from the Ragle and buy it back in a few years for close to a $100,000 over the purchase price. Before the closing, Ragle reportedly flipped the contract to a California realtor named Shana Burbank. When all the dust settled, the $233,000 sales price was never paid, nor was the homeowner's existing mortgage ever paid off, and the homeowner found himself being evicted from his home.

For more, see I-Team Investigation: From Homeowner to Homeless.

To read the lawsuit, see Complaint - Ogilvie vs. Dreamscape Solutions, Inc., Kenneth Ragle, et al.

Go here to watch KLAS-TV report by investigative reporter Colleen McCarty.

(revised 5-12-07)

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North Carolina AG Pursuing Mortgage Broker

The North Carolina Attorney General is going after mortgage broker Hall Financial Service, of Matthews, on allegations that the company's owners have engaged in mortgage fraud, according to a report by WCNC-TV. The attorney general claims that one third of Hall's loans are headed to foreclosure, and he wants to strip the company of its license and permanently bar its owners from the mortgage business. For more, see Dream home destroyed by mortgage fraud.
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Ohio Prosecutors Indict Franklin County Trio In Flipping Scam

The Columbus Dispatch reports that an indictment was unsealed in state court last week charging Mohamed A. "Mike" Mohamed (who acted as the buyer), Jeremy K. Virgin (who prepared the inflated appraisals), and Karen Axline (who was a clerk for a title agency who used forged documents to help Mohamed buy the property), with theft, forgery, money laundering and falsifying loan applications for their roles in an alleged flipping mortgage fraud scam. An organized-crime task force of Columbus police, prosecutors and the Ohio Attorney General's office brought the charges. For the details, see 3 indicted in mortgage scheme (Suspicions aroused by buyers who offered much more than some houses' asking prices).
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$17.6 Million Fraud Involving 280 Properties Gets Missouri Man 5 Years In Federal Slammer

Jeffrey Tyler Wine, of Kansas City, Missouri, was sentenced in a Missouri Federal Court today to five years in federal prison and ordered him to pay $4.9 million in restitution for his role in a nearly $17.6 million straw buyer / flipping mortgage fraud scam that involved 280 residential properties. According to John Wood, U.S. Attorney for the Western District of Missouri:

• "Dozens of financial institutions were victimized by this mortgage fraud scheme, which in turn erodes the area's real estate market and negatively impacts the local economy. Wine will not be allowed to profit from his deception; in addition to a lengthy prison term, virtually all of his assets will be used for restitution for his victims."

For more, see:

• U.S.Attorney Wood Press Release, and
• Businessman gets five years for mortgage fraud (Kansas City Business Journal)

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Illinois Files Disciplinary Actions In Alleged Flipping Scam; 125 Homes Involved

According to a Press Release issued yesterday from the office of Illinois Governor Rod R. Blagojevich:

• "[O]fficials from the Illinois Department of Financial and Professional Regulation (IDFPR) and the Governor’s Mortgage Fraud Task Force (MFTF) today announced a series of disciplinary actions against more than a dozen real estate licensees, including mortgage brokers and loan originators, allegedly involved in a ‘mortgage flipping’ scheme – buying houses below market rates and re-selling the same properties for artificially higher prices. The scheme, centered in the Chicagoland area, involved more than 100 properties, said IDFPR officials during a press conference called to disclose the results of a three-month investigation."

Those named in the state disciplinary actions are:

• Tyrone Matthews: Appraisal and LoanOriginator, Felicia Matthews: Appraisal, Joseph Holman: Appraisal, Jomonique Moore: Appraisal Associate, John Tagtmeier: Loan Originator, Illinois Mortgage Assoc.: Residential Mortgage Broker, Carteret Mortgage: Residential Mortgage Broker (Va.), Contemporary Financial Services Inc. Mortgage Broker, New Family: Residential Mortgage Broker, Kelly Husband: Loan Originator, Appex Mortgage: Residential Mortgage Brokers (Fla.), Cynthia Woodcox: Unregistered Loan Originator, Odeh Saleh: Unregistered Loan Originator, Clint Welsh: Unregistered Loan Originator, Deangelius Smith: Unregistered Loan Originator, Tri-Star: Title Agency, Resource: Title Agency.

For more, see Blagojevich Administration officials take action against massive mortgage fraud ring.

See also Chicago Tribune story, 17 penalized in 'mortgage flipping'.

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Debt Forgiveness On "Short Sales" Not Always Subject To Income Tax

An article by syndicated columnist Kenneth Harney (reported in The Ledger, of Lakeland, Florida) describes the income tax "hand grenade" that homeowners in default on their mortgages face when mortgage lenders agree on either a mortgage modification or a "short sale" where, as part of the deal, the mortgage lender agrees on forgiving part of the mortgage debt. Under general income tax rules, the part of a debt that is forgiven is subject to Federal income tax (and state and local income taxes, if applicable, as well). Such a tax generally causes a problem for a homeowner because he/she is not actually receiving money to pay the tax with. Further, since these situations typically arise with financially strapped people, they usually don't have any other source of cash to pay this tax with.

Reportedly, proposed legislation in Congress could soften some of the impact on financially stressed homeowners, however. The Mortgage Cancellation Tax Relief Act of 2007 (HR 1876), if ultimately passed by Congress and signed into law, would amend the tax code to exclude debt forgiveness on principal home mortgages from treatment as income.

For more, see The Tax Man Will Care About Your Forgiven Debt.

For those who can't wait that long, I will point out that there are a number of exceptions and exclusions to this income tax rule. Among the exceptions and exclusions are:

• debt that would have been deductible if paid,
• debt that is canceled as a result of Hurricane Katrina,
• debt that is canceled in a Federal Bankruptcy case,
• debt that is canceled while you are insolvent, but limited by the dollar amount of your insolvency,
• and others.

I suspect that many financially strapped homeowners losing their homes may, in fact, be insolvent. I also suspect that, because there doesn't seem to be much written about the insolvency exception (or the other exceptions, either) to the general rule, it is probably being overlooked by many people. To read more about all the exceptions and exclusions to the general rule that subjects an individual to income tax on the amount of debt that is forgiven, see:

• Section 108 of the Internal Revenue Code,
• IRS Publication 4681: Canceled Debts, Foreclosures, Reposessions and Abandonments.

If you need assistance in determining whether or not you qualify for one or more of the exceptions or exclusions, I highly recommend retaining the services of an experienced tax professional who knows something about doing some basic tax law research (ie. tax attorney, CPA, or Enrolled Agent; this is not a job for your average tax form preparer). And be prepared to show the tax pro copies of the three references listed above, just in case.

Go here for other posts on this subject.

(revised 5-9-07; 1:12 pm)

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Lenders More Willing To Work Out Payments With Homeowners

A recent Washington Post article reports that some mortgage lenders are becoming more flexible and increasingly more willing to help troubled borrowers stay in their homes. Described in the story are various options that may be available to homeowners when dealing with their lenders in making payment arrangements.

One caution in negotitaing with lenders is directed to financially strapped homeowners who have significant equity in their homes, where "[i]f the lender then forecloses, that lender is protected against loss because the equity in your home could cover the loan balance and foreclosure-related costs."

According to industry expert Jack Guttentag, "It's a paradox, but the borrower who gets into trouble and has no equity is in a stronger negotiating position with the lender than the borrower who has equity."

For more, see Fighting to Keep the Roof (Strapped Owners Find Help From Their Lenders).
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FHA Mortgage Reform Bill Gaining Steam In Congress

Pending legislation allowing the Federal Housing Administration to offer borrowers a safer alternative to risky mortgage products and to help many homeowners facing foreclosure is moving along in Congress. A Congressional committee voted last week to send the bill to the full House of Representatives for a vote.

The legislation – called the Expanding American Homeownership Act of 2007 – would increase loan limits, eliminate the statutory 3 percent minimum cash down payment, and give FHA flexibility to provide risk-based pricing.

For more, see Passage of FHA reform bill would help homeowners and homebuyers, says NAR (courtesy of the Florida Association of Realtors).
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"Baseball Bat" Intimidation Used At New Century, Says Former Employee

A recent Washington Post story describes the "pressure cooker" atmosphere experienced by in-house appraisers and underwriters at New Century Financial Corporation to approve loans where the underlying documentation for the loans "had problems."

The article is reportedly based on accounts from former New Century rank-and-file workers who worked at five different branches that handled subprime loans all over the country. In agreeing to give interviews for the article, all except one former employee spoke on condition of anonymity, citing recent e-mails from the firm telling them not to comment publicly.

Among the details in the story was the reported use of yelling and slamming desks with baseball bats by salespeople (who worked on commissions) when one in-house appraiser rejected their deals. According to one former employee whose job it was to approve or reject the loan documentation on pending mortgage applications:

• “There was instant notification to everyone as soon as you rejected a loan. And you dreaded doing it because you paid for it. Two guys would come with a bat, and they were all [ticked] off because you cut their deals.”

Reportedly, "the pressure to meet [...] expectations was so unrelenting that a worker in Foxboro, Mass., collapsed from stress and was taken to the hospital."

For more, see Pressure at mortgage firm led to mass approval of bad loans (reported at the Florida Association of Realtors website).

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Arizona Regulators Crack Down On Escrow "Skimmers"

The Arizona Republic reports:

• "Arizona regulators are cracking down on escrow officers for skimming hundreds of thousands of dollars off home sales. So far this year, a handful of those officers have been banned from the escrow business and the mortgage industry for writing unauthorized checks out of home-sale funds to relatives, real estate agents, loan officers, contractors and cleaning companies. Some also have been convicted of theft."

• "Barred from the business for writing unauthorized checks out of home-sale proceeds are: Anna Solis, Denise Claudia Ramsey, Margie Means, Annette Damico and Sandra Flores. The state regulator also has moved to ban Nancy Wilson from the business amid allegations that she embezzled $129,418 from her former employer, LandAmerica of Phoenix..."

For all the details, see Escrow officers under scrutiny.

Go here for stories on other alleged escrow agent mishandling of funds. sneaky slick escrow agents alpha

New Hampshire Not Immune From Subprime Crisis

The New Hampshire Union Leader reports that New Hampshire is not immune from the nationwide foreclosure crisis within the "subprime" mortgage industry. One local expert is predicting a "Nantucket sleigh ride" for the industry.

Sarah Mattson, a staff attorney with New Hampshire Legal Assistance, a non-profit law firm offering free legal services to seniors and eligible low-income persons, reports that a growing portion her organization's foreclosure practice involves people who have been ensnared by "foreclosure rescue scams."

Peter Wright, director of the Consumer and Commercial Law Clinic at Franklin Pierce Law Center in Concord, also reports seeing more clients who fell victim to predatory loans.

New Hampshire and Massacusetts bankruptcy attorney Richard Gaudreau, warns the picture is about to get even worse, referring to "deferred interest" / "negative amortization" mortgages as "the real time bomb" in this crisis. Reportedly, he is pursuing cases involving Truth in Lending Law violations by mortgage lenders on behalf of a number of New Hampshire homeowners.

For more, including a description of what is a "Nantucket sleigh ride", see NH foreclosures jump as 'exotic' loans' rates adjust.

Go here for more posts on homeowners who have refinanced into bad mortgage loans and are now using the Federal TILA to try and undo the bad loans. undo mortgage loans TILA alpha

More On New Hampshire Foreclosure Trouble

For more stories from the New Hampshire Union Leader on New Hampshire foreclosures, see:

New Hampshire couple who was reportedly misled into taking out a subprime mortgage with payments that were $600 per month higher than was represented, see Immigrant family falls afoul of subprime mortgage.

Manchester couple fighting in court with a foreclosure rescue operator in an attempt to undo a transaction purportedly inteneded to "save" their home from foreclosure, the nature of which was reportedly misrepresented to them, see Seeking a lifeline, their 'rescue' made things worse.

New Hampshire legislature's attempt, through House Bill 365 which passed in March, to address the abuses that are common in foreclosure rescue transactions, see House bill could help homeowners.
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Multi-Flipped St. Pete Home Raises Suspicion

In Florida, the St. Petersburg Times recently reported on the story of one home that sold three times in one year; the last two times for $50,000 more than the previous sale. According to the Times:

• "All three transactions involved Victor Clavizzao, a loan officer whose suspicious real estate deals and lengthy criminal record were the subject of a St. Petersburg Times story April 29."

For the details of the three sales, the relationship between Clavizzao and the subsequent home buyers, a reported FBI investigation, and comments from industry professionals, see One house, three quick sales, one familiar link (Questions multiply about a loan officer who is the key thread in a home's rise in hard times).

For story update, see Felon changes tune on mortgage fraud (8-23-08; In filings made public this week in U.S. District Court in Tampa, Clavizzao agreed to plead guilty to conspiring to fraudulently obtain nearly $6-million in mortgage loans on the Venetian Isle house and 12 other homes and condos in Pinellas County).

For more on the reported real esate escapades of Victor Clavizzao, see:

• Felon drives dizzying web of house deals (Inflated prices, bogus buyers, swollen loans. It's a whole different housing market for some).

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Weekend I.D. Theft Blotter

I stumbled into these identity theft related stories that caught my eye:

• Used computer donated by Illinois city contains names and social security numbers of about 130 city employees (see Identity Theft Scare or watch WCIA-TV Channel 3 Video report),
• Woman discovers she's an I.D theft victim when hospital bills her $17,000 for surgery she never had (see Hospital bill alerts woman to identity theft),
• Computer hackers set up shop next door to Internet cafes; set up "evil twin" websites to lure victims (see NBC2 Investigates: New forms of identity theft or watch NBC2-TV Video Report),
• Anne Arundel (Maryland) Police Community Relations Council is holding a countywide document shredding event on May 12, 2007 (see Shred-a-rama to protect against identity theft - County will set up free shredding machines),
• Children, ages 3 weeks and 7 years, victims of I.D. theft; victims under 18 increasing every year (see ID Theft: A Growing Problem For Children or watch Video - Child ID theft),
• NYC airline employees charged with using stolen passengers' credit card information to run up charges (see JetBlue Workers Charged In Identity Theft Scam or watch Video - JetBlue ID Theft Scam),
• I.D info stolen by office temp while working at insurance company used to borrow $12K to buy motorcycle (see Charges filed against man accused of identity theft),
• School administrator accused of stealing co-worker's identity; caught writing herself check for $3,500 in co-worker's name, resigns her position (see School administrator will likely avoid jail in identity theft case),
• 2007 list with personal info of about 450 graduates of local Texas college accidentally put in server easily accessible on public computers on campus, (see ID theft a concern for Montgomery College students - Identity theft a worry after data is put on an open server on campus)

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Are "No-Cost" Mortgages Actually "Cost Free"? What's a "Yield Spread Premium"?

For answers to these questions and a discussion of so-called "no cost mortgages", see these MarketWatch articles:

• Lenders agree more disclosure is needed on 'no cost' mortgages
• Debate between borrowers and lenders rages over 'no-cost' mortgage loans
• No-closing-cost refinancing will cost you one way or the other
• Lenders defend pricing on no-cost mortgages

For a story on the controversial "Yield Spread Premium", thought of by some as a type of hidden charge for a mortgage that may not show up on a closing statement, and by others as a legitimate fee when disclosed and applied properly, see Subprime crisis shines light on mortgage brokers (Class action suit against NovaStar alleges hidden fees; lender to fight back)

For a basic explanation of what the "Yield Spread Premium" is all about, see Mortgage Ails: Too Much Information?

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