The real estate firm Elias Realty, located just to our south in Livonia, has found itself in hot water this month after the FBI issued a search warrant on their offices a week ago. Although the former state attorney general representing the firm in the case is confident that the FBI will find no wrong doing, it has stirred up many of the problems the company has been having with Freddie Mac over the course of the last few months.
If there is one thing that has the entire nation on edge it's the uncertainty of the fiscal cliff. With the federal budget still in limbo, homeowners who are still paying on mortgages they may not be able to afford fear that soon, the coming of the New Year could mean an increase in their taxable income.
During the housing slump, many homeowners across the United States, including people here in Michigan, found themselves struggling to pay their mortgages in a desperate attempt to save their homes.
Mortgage-backed securities made the news frequently in the first part of the recession when the housing bubble burst. A mortgage-backed security is basically an investment in the loans that are given to mortgage holders and entitles the investor to a share of the profits from that loan. This type of security was seen as a very safe and smart investment until loan qualification standards were relaxed and many people were able to obtain mortgages that they were unable to pay back.
Mortgage agreements are complex and difficult for many consumers to understand. Prospective buyers often rely on the expertise of their realtor and the advice of their mortgage company representative or banker to help them parse the language and terms of the agreement. Some homebuyers choose to be represented by an attorney in the negotiation and execution of a home purchase so that they have an expert that will advocate for their interests alone.
Many homeowners are familiar with the offers they get in the mail advertising mortgage relief or refinancing programs. Some of the offers seem too good to be true, and a recent action by the Federal Trade Commission suggests that they are not true.
Each mortgage contains a small hidden fee, known as the guarantee fee, or "G-fee." The fee has been silently included in mortgages for more than 30 years, and Congress has recently mandated an increase. It is not clear at this time when the increase will take effect, but it analysts anticipate that it will also cause interests rates to rise slightly.