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Monday, Dec. 15, 2008 | 2:07 a.m.
Nevada regulators have failed to adequately oversee mortgage companies, according to a legislative audit released last week.
As Cy Ryan reported on the Las Vegas Sun’s Web site Thursday, auditors said the Mortgage Lending Division failed to examine all the state’s mortgage companies annually, as required. It also failed to collect about $1.5 million in assessments, fees and fines. The audit, based on the division’s work in 2007, also found that 87 percent of companies considered high-risk were not given follow-up reviews.
For example, one company received poor marks in its examination in November 2002. It was not reexamined until May 2008.
The audit said problems with the division’s enforcement “allowed companies and individuals who committed serious violations to avoid or postpone paying fines.”
Lawmakers were told the division had not hired 10 examiners, as it was authorized to do. And the division was behind on doing the regular reviews of the industry. The audit made several recommendations aimed at getting the division back on track and up to date with its reviews. Mortgage Commissioner Joseph Waltuch, a former executive of disgraced subprime lender New Century Financial Corp., said the division would follow the audit’s recommendations. Hired in September 2007, Waltuch said the division was living up to its mission, but lawmakers contradicted that.
“You are not meeting your mission,” said Assemblywoman Sheila Leslie, D-Reno. “The performance is abysmal.”
Abysmal indeed. The mortgage division is supposed to protect both consumers and investors, yet judging from the audit report, it is doing neither.
That is particularly troubling considering the mortgage industry’s collapse was largely based on improper or illegal lending practices. In Nevada, which has been the epicenter of the foreclosure crisis, the state should be increasing oversight of the mortgage industry and making sure regulators have all the tools they need to protect consumers.
This audit is a sign the Gibbons administration has failed to understand that. Lawmakers should press the administration to make sure proper changes are made.
Yes the push by Democrats like Clinton to have banks, Fannie Mae and Freddie Mac to lower their standards when dealing with sub-prime loans so that minorities come get into homes caused a housing boom that eventually turned into a housing bust once interest rates ticked up on all those ARMs.
Since when does the Sun care about state audits? Didn't they kill a story about the LVCVA misspending money and then turn around and write editorial puff pieces on them?
Clinton, indeed, started it. But you know, I bought my home with one of these loans in 2004, which was well into the Bush and Republican-controlled Congressional era. If this was such a bad idea, why didn't they immediately stop it once they took office? So, who is more to blame? The one who started it, or the idiots that kept it going who (by your logic) should have known better?
I blame Bush and the Republicans, too.
You are right. They should have had the balls and the smarts to stop it. but they did not.
There are no excuses for Bush and the Republicans.
Fannie Mae and Freddie Mac played a role, too.
You would think that lenders that were signing up people for loans would do their own audits and risk managment.
Why they did a poort job? Because they were making the risky loans and turning around and selling them at a quick profit to Fannie Mae and Freddie Mac which are quasi-qovernment entities.
Fannie Mae and Freddie Mac were removing the risk for marketplace by buying up these risky loans and them repackaging them with other non-risky loans and selling them in derivatives packagaes that posioned the entire financial system worldwide.
Why did Fannie Mae and Freddie Mac (quasi-government entities) do that? Because they got messages from Clinton's and Democrats to bust open the sub-prime market so that minorities could own homes.
"Sean Hannity baselessly asserted that "[t]he federal government and the Democrats ... forced these banks, through the Community Reinvestment Act, to make these risky loans," adding, "The risky loans started the subprime mortgage crisis, which impacted all these financial institutions, which needed government bailouts." In fact, according to housing experts, the vast majority of subprime loans were made by independent lenders not covered by the CRA."
Instead of the partisan B.S. here, I suggest that the primary reason was that everybody, EVERYBODY, likes to make money, combined massive groupthink in the denial department.
I think you do not know the role of Fannie Mae and Freddie Mac.
Fannie Mae and Freddie Mac is the biggest purchaser of mortgages.
So they got marching orders from the Democrats and Clinton to reduce their standards for buying mortgages especially sub-prime.
So lenders could pratice bad business decisions because the risk was removed. They made high risk loans and turned around and resold them at a quick profit to Fannie Mae and Freddie Mac.
This caused a huge housing bubble that recently crashed into the earth.
Here are some good links on the subject:
http://online.wsj.com/article/SB12221294...
http://www.washingtonpost.com/wp-dyn/con...
http://www.aei.org/publications/pubID.28...
http://query.nytimes.com/gst/fullpage.ht...
http://www.nhi.org/online/issues/125/goi...
http://relistr.com/real-estate/fannie-ma...
http://www.bloomberg.com/apps/news?pid=2...
http://www.nypost.com/seven/09092008/pos...
I'm a Realtor here in Las Vegas, Nevada. Assemblywoman Sheila Leslie should stop casting blame where it doesn't belong. These current problems did "not" come from the Mortgage Lending Board not doing their jobs and I believe Assemblywoman Sheila Leslie knows that. She needs to start working on laws that give these regulatory agencies more power to close the loop holes in the current laws and/or lack of laws that are currently out there allowing this to happen. I personally sent an email to all our Assemblywomen and Assemblymen about the current fraud that we are seeing and it was Assemblyman Lynn Stewart and Mortgage Commissioner Joseph Waltuch who stepped up to the plate and continue to work diligently on protecting the consumers. I never received any reply from Assemblywoman Sheila Leslie. I have many times over the years had dealings with the Mortgage Lending Board and they have always acted on complaints in a timely fashion and were more than interested in investigating Lenders/Brokers with bad lending practices. They are actually one of the better regulatory agencies in Nevada. Mortgage Commissioner Joseph Waltuch has done a fine job at stepping up to the plate on the current Fraud that is being committed with this mortgage crisis. Assemblywoman Sheila Leslie the word is out, the people know! They are no longer interested in the political bull it's time to work towards the solutions before more people loose their homes.
Brenda Crosbie-Jaeger
Realtor