How homeowners, speculators and Wall Street rode a wave of easy money
It was the peak. It was the embodiment of business success," Connelly said. "We underestimated the bubble, even though deep down, we knew it couldn't last forever." Indeed, Pinnacle's party would soon end, along with the nation's housing euphoria. The company has all but disappeared, along with dozens of other mortgage firms, tens of thousands of jobs on Wall Street and the dreams of about 1 million proud new homeowners who lost their houses...The aftershocks of the housing market's collapse still rumble through the economy, with unemployment rising, companies struggling to obtain financing and the stock market more than 10 percent below its peak last fall... Seen in the best possible light, the housing bubble that began inflating in the mid-1990s was "a great national experiment," as one prominent economist put it -- a way to harness the inventiveness of the capitalist system to give low-income families, minorities and immigrants a chance to own their homes. But it also is a classic story of boom, excess and bust, of homeowners, speculators and Wall Street dealmakers happy to ride the wave of easy money even though many knew a crash was inevitable.

Arests expected soon in two other schemes based here
Eleven members of that 16-person ring -- which includes three real estate agents, an attorney, a mortgage broker and a former Wells Fargo bank officer -- are set to be sentenced today in U.S. District Court in Austin after being found guilty of wire fraud, money laundering and falsifying information on loan documents as part of this scam that hit Austin and that San Antonio neighborhood...Texas is among the top 10 states for mortgage abuses, and San Antonio is involved in three such scams so far this year, the Austin case and two San Antonio-based rings under investigation by the Federal Bureau of Investigation. The San Antonio rings used more than 50 people to inflate prices in Stone Oak, Spring Branch and Dallas. FBI special agents investigating the cases have said that arrests would happen soon this summer.

Economic woes provide fertile field for scam artists
Mortgage fraud is on the rise and consumers need to be wary of the many scams that often surface in the wake of this crime. Those are among the findings included in a new report issued by the Federal Bureau of Investigation (FBI). The FBI's report also showed the numbers of Suspicious Activity Reports (SAS) regarding mortgage fraud have skyrocketed in the past year. The top 10 mortgage fraud states for 2007 were: Florida, Georgia, Michigan, California, Illinois, Ohio, Texas, New York, Colorado, and Minnesota. Other states affected by mortgage fraud included Arizona, Maryland, Utah, Nevada, Missouri, Indiana, Tennessee, Virginia, New Jersey, and Connecticut;

No help for 70% of subprime borrowers
Seven out of 10 seriously delinquent subprime mortgage borrowers are still not getting the help they need to keep their homes, according to a report released Tuesday by state officials working to stem the foreclosure crisis...More than 1 million of those loans, or nearly 25% of the total, were delinquent as of Jan. 31. And foreclosure proceedings have begun on 300,000 of them - an 8% increase since October.

Spending public money to shore up real estate prices won't make housing more affordable
The Senate bill hashed out Wednesday, in rare bipartisan haste, typifies Black's frustration. In its current form, the bill would provide $10 billion in tax-exempt bonds to local governments and housing agencies so that they can refinance sub-prime loans. In other words, public dollars would be used to reduce the amount of money troubled borrowers owe on their mortgages.

Associated Press Reports: Feds investigating Countrywide lender
Federal authorities are investigating Countrywide Financial Corp. for securities fraud, according to media reports. The FBI is in the early stages of an inquiry into whether officials misrepresented the company's financial position and the quality of its mortgage loans, the Wall Street Journal first reported on Saturday, citing law enforcement officials and finance executives. The Justice Department is also involved in the investigation into the nation's largest mortgage lender, said the New York Times, which also cited anonymous sources who said they were not authorized to discuss ongoing criminal matters.

Illinois Subpoenas Countrywide, Wells Fargo
Attorney General Lisa Madigan has issued subpoenas to Countrywide Home Loans, Inc., and Wells Fargo Financial Illinois, Inc., to determine whether the lenders unfairly steered African American and Latino borrowers into higher cost home loans in violation of fair lending and civil rights laws. The study also found marked disparities in loan pricing between white and non-white borrowers, with African American borrowers three times as likely as white borrowers to receive a high-cost home loan and Latino borrowers twice as likely...According to the Chicago Reporter study, the wealthiest African American homeowners are still more likely than the poorest white borrowers to get placed in high-cost loans.

Fannie, Freddie agree to new appraisal standards
The two largest sources of U.S. mortgage financing agreed on Monday to sponsor a new home appraisal watchdog to prevent inflated home values...Since Wall Street gladly bought and bundled home loans for investors during the housing boom, lenders may have felt more comfortable inflating loan amounts. Cuomo filed subpoenas against Fannie Mae and Freddie Mac to determine whether the companies stood by as that happened.

Fraud compounds woes of housing crisis
As the U.S. housing meltdown forces hundreds of thousands of Americans from their homes, the extent to which fraud was a factor in the crisis is just coming to light. Products such as stated-income loans -- known as "liar loans" because no proof of income was needed -- led to widespread misrepresentation by borrowers about their earnings. But far more sinister forms of fraud, including identity theft and "straw buyers" -- those created using fake documents -- are also coming into the open.

Freddie Mac lifts lid on reinsurance arrangements
A seemingly arcane policy change by mortgage investor Freddie Mac sheds new light on issues of much broader concern for consumers: Do you really understand where the money is flowing -- all the nooks and crannies -- when you take out a mortgage and pay thousands of dollars in fees at settlement?  Is anyone required to explain to you what's really going on inside your home loan -- how it works and whether it could morph into something very different? Freddie Mac's policy change announced Feb. 14 affected a dark corner of the mortgage business -- splits of mortgage insurance premiums between lenders and insurers. What? My lender is getting a cut of the premium, you ask -- just as builders and realty brokers are pocketing chunks of my title insurance premiums behind my back?  See Related Article:Six Builders to Pay $1.4 Million in HUD Settlement