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"Some lenders didn't even realize they were financing lava zones and we didn't tell them...ha-ha-ha"
Isn't that fraud?
from wikipedia - see the last 2 points:
Fraud as tort:
Fraud, in addition to being a criminal act, is also a type of civil law violation known as a tort. A tort is a civil wrong for which the law provides a remedy. A civil fraud typically involves the act of intentionally making a false representation of a material fact, with the intent to deceive, which is reasonably relied upon by another person to that person's detriment. A "false representation" can take many forms, such as:
A false statement of fact, known to be false at the time it was made;
A statement of fact with no reasonable basis to make that statement;
A promise of future performance made with an intent, at the time the promise was made, not to perform as promised;
A statement of opinion based on a false statement of fact;
A statement of opinion that the maker knows to be false; or
An expression of opinion that is false, made by one claiming or implying to have special knowledge of the subject matter of the opinion. "Special knowledge" in this case means knowledge
or information superior to that possessed by the other party, and to which the other party did not have equal access.
An intentional omission or concealment of some material fact done with the design of deceiving another party, and done with the intent that the other party rely on the deception.[1], [2]
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Obie,
Here's what I'm getting from that~
(Senator Inouye's is going to make a formal request asking Fannie Mae WHY THEY ARE SINGLING OUT the Big Island when Maui has an active volcano as do Washington, Oregon and Alaska.)
I'm not alone in wondering what the true reason is.
And~
("Looks to me like they are just following the guidelines that were previously in place that they may have been ignoring.")
Why were they ignoring these policy rules prior and now out of the blue changing the position? Would it have anything to do with a previous "boom" in local economics that has since gone sour along with the rest of U.S. economy? The LZ issue is obviously a smoke screen for the fact that they would rather not finance to anyone who might possibly default on the loan and or fail to make the proper insurance payments. The LZ designation by design provides a superficial excuse to dance between the lines of the areas economic health.
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Kane
The other places you mention do not have active volcanoes that are now erupting.Just last year several homes were destroyed by the ongoing eruption.
I posted the link to the Fha rule,but will now post part of the rule.It has been in place since 1971.The reason they weren't enforcing it was because of pressure from the Clinton administration to loosen up their rules so more people could buy homes.
Based upon potential volcano activity, FHA mortgage insurance is not available in lava flow zones 1 and 2 Areas.
Island of Hawaii: In 1971 HUD established a policy which responded to volcanic hazards on the Island of Hawaii. Under this policy certain areas were identified as being unacceptable for HUD programs. This policy was re-evaluated and the findings were posted in 1991. Except for a newly designated area to the northeast of Mauna Loa, the 1990 and 1971 HUD non-participation areas are not significantly changed in location or extent. The 1990 boundaries are more closely based on known geologic features and current estimates of the U. S. Geological Survey (USGS) Hawaiian Volcano Observatory.
HUD, in consultation with USGS. geologists at the Menlo Park Center in California and at the Volcano Observatory, reviewed 20 volcanic zones involving lava flows, subsidence and ground fracture, tephra falls, volcanic gas, and pyroclastic surge. Ultimately HUD identified two zones as being particularly hazardous. These are defined by the U.S.G.S. Observatory as lava flow zones #1 and #2.
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Bullwinkle, let me re-phrase that. Some lenders didn't have any specific guidelines relating to "lava zones" and their own acct execs just never pressed the matter, as in "asking" about lending in these areas specifically. After all, all properties are fully insured regardless. Also, the lender is fully informed of the lava zone info as it is noted in detail on the appraisals for each property. It's up to the lender to review and underwite the appraisals. No one is committing "fraud". GEEZ, you must be retired, so much time for extended research from a single sentence?
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Nope ... my sis is a vice president of a lender.... My ex an underwriter. I happened to find the
"Some lenders didn't even realize they were financing lava zones and we didn't tell them...ha-ha-ha"
disturbing in light of the current meltdown, Aloha
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quote:
Originally posted by Sandra A.
Bullwinkle, let me re-phrase that. Some lenders didn't have any specific guidelines relating to "lava zones" and their own acct execs just never pressed the matter, as in "asking" about lending in these areas specifically. After all, all properties are fully insured regardless. Also, the lender is fully informed of the lava zone info as it is noted in detail on the appraisals for each property. It's up to the lender to review and underwite the appraisals. No one is committing "fraud". GEEZ, you must be retired, so much time for extended research from a single sentence?
Not totally true. We purchased a mortgage without earthquake insurance and hurricane insurance was an option, therefore, not fully insured.
If you think health care is expensive now, wait until you see what it cost when it’s free...now here come the taxes.....
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Regarding lava zone issues, fire coverage.
Yes, the other coverages have been optional, however, I am seeing that more and more lenders are now requiring hurricane coverage whereas they hadn't in the past.
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The current meltdown has nothing to do with lava zones. It has everything to do with making loans for people who are not qualified to carry the pymt. The infamous "no doc" loans and worse, the "option arm" where you don't even have to make the fully amortized pymt, an optional smaller pymt running the the balance up instead of down and with no built-in exit strategy...never placed anyone in that ridiculous loan, red flag all the way.
Back to lava zones, I can't find anybody to take lava zone 1 anymore, have calls all the time for Leilani Estates, a very nice subdivision. It's a shame.
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quote:
Originally posted by Sandra A.
The current meltdown has nothing to do with lava zones. It has everything to do with making loans for people who are not qualified to carry the pymt.
How true that is!!!
Aloha,
John S. Rabi, GM,PB,ABR,CRB,CM,FHS
808.989.1314
http://www.JohnRabi.com
Typically Tropical Properties
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