consumer protection

Rajeev Dhawan, an economics professor at Georgia State University, has started studying the characteristics of loans on homes that are in foreclosure. His preliminary analysis of data from April shows that nearly half were for adjustable rate mortgages and many were issued in the last two years.

“Everybody thought if the home prices kept going up, the lenders will keep refinancing you,” he said.

In recent years, industry groups and law enforcement agencies have also cited Atlanta for being home to some aggressive mortgage fraud schemes. It may have been an easier target because the prices of homes in the same neighborhood can vary greatly here, making it easier to inflate appraisals.

As companies started investing more and more money into businesses that offer subprime home loans, more and more people started getting loans they could not afford to pay back. Now these people are stuck deciding if they should pay for the mortgage or pay for food.

In 2006, the Madison County Sheriff’s Civil Department sold 1,082 homes through sheriff sales. This year will be similar to last year....

>> Requirement for the creation of a principal manager who will oversee the loan brokers at each firm. The principal manager, who must have at least three years of experience in the financial services industry, will be hired privately by each firm.

>> Requirement for criminal background checks on loan broker employees, owners and principal managers.

>> Requirement for written examinations for employees and principal managers. Currently registered employees must the test upon license renewal.

>> Increased flexibility for the Indiana Securities Commissioner to revoke, deny or suspend a loan broker license for reasons including violations of loan broker-related laws in the past 10 years under the Commissioner's jurisdiction. In addition, knowingly filing false statements is now a Class C felony.

>> Requirements for certain exempt entities to file notices with the Securities Division every two years.

Citing a litany of cases where people have found themselves surprised by the implications of what seemed like a harmless web posting, leading academic Dr Yaman Akdeniz has called for a massive public education programme aimed at combating what is set to become a key social issue.

"It may seem like harmless fun, but the social networking revolution is already becoming a major issue in real life. People are losing their jobs, relationships and in some extreme cases even their lives as a direct result of exposing so much of themselves to the world.

"They are leaving themselves wide-open to commercial, personal and physical harm without any apparent understanding of the potential results," said Akdeniz, founder of the watchdog organisation Cyber-Rights & Cyber-Liberties UK.

"People must learn that once information has been released in digital format, it is impossible to get it back. We are living steadily more transparent lives, and the consequences of that could prove to be extremely dangerous."

Increasingly, the 21st-century citizen is defined by data. The conglomeration of personal records, certificates, applications and financial transactions that form the flurry of information following everyone about like a small cloud is the basis on which commercial and administrative judgements are made.

In the US, companies are already springing up that promise to check out job applicants' digital reputations on other firms' behalf. In addition to combing blog space, YouTube and an array of online forums for evidence, they also promise to track down potential recruits' Amazon reading lists in an effort to unearth any unwelcome political views.

"Practically the first thing everybody does when meeting someone new is to Google them. It's a great way of picking up extra information on a contact, but people don't seem to realise this when they're logging on to services like MySpace and Facebook, so they put everything online from their job title to their favourite sexual position," said Peter Cunningham, Viadeo's UK head of operations.

"A well-managed NetRep can work in your favour but nobody in business wants to take unnecessary risks, so if there's anything questionable about you online it will almost certainly have an impact upon your career prospects.

The wealth of digital information growing on the back of the web 2.0 boom has given rise to a new form of crime known as social engineering, where hackers manipulate online relationships in order to get access to valuable data about themselves or their place of work.

"It's a type of attack that is becoming ever more sophisticated: the hacker can now gain substantial information on your employees remotely because more and more data is held in the public domain. Take, for example, social networking sites such as Linked In, Ecademy and Ryze or jobs websites which house curriculum vitaes.

"Both provide ample opportunity for the hacker to use our credentials to impersonate us or to launch an attack on our employers," says Ken Munro of SecureTest, the company responsible for vetting the security of installations such as GCHQ.

The industry's lawyer in the case, Ira Schwartz, argues in a brief filed earlier this month that the MP3 files Howell made on his computer from legally bought CDs are "unauthorized copies" of copyrighted recordings.

"I couldn't believe it when I read that," says Ray Beckerman, a New York lawyer who represents six clients who have been sued by the RIAA. "The basic principle in the law is that you have to distribute actual physical copies to be guilty of violating copyright. But recently, the industry has been going around saying that even a personal copy on your computer is a violation."

Yeah, a lot of people can believe this argument - lawyers and laypersons alike.

Freddie Mac, the government-sponsored company that is the second-largest buyer and guarantor of home loans in the country, announced Wednesday that it will buy as much as $20 billion in fixed-rate and adjustable-rate mortgages to help borrowers with high-priced loans keep their homes. The new mortgages, expected to be available by midsummer, will include loans with longer fixed-rate terms.

Fannie Mae, the No. 1 mortgage financer, also is offering new options so that lenders can help subprime borrowers refinance out of high-interest adjustable-rate mortgages or other difficult loans.

And Washington Mutual Inc., one of the country's largest financial institutions, said it will refinance up to $2 billion in subprime mortgages to help borrowers avoid default and foreclosure, allowing them to apply for discounted fixed-rate home loans or other refinancing alternatives. Subprime loans comprise only about 6 percent of Seattle-based Washington Mutual's mortgage holdings, but they dealt a heavy blow to its first-quarter earnings, which slid 20 percent.

If you or someone you know has one of these subprime mortgages, I strongly suggest checking out these offers. The AP article obtusely headlined Lending giant moves indicate cooperation,can be found at this link.

"Officials said the scheme included participants at every stage of the transactions, including bank employees, title agents, appraisers and fake buyers, and involved property in Miami-Dade and Broward Counties and in the city of Marco Island on the state’s southwest coast."

According to the indictment, Juan Torrens, 40, a defendant and the owner of two real estate investment companies, would identify property owners who were willing to overstate the selling price of their properties.

Mr. Torrens and another defendant, Daniel Ramos, 40, would recruit people to pose as buyers, the indictment said. Mr. Torrens and his wife, Rachael, would then prepare fraudulent mortgage loan applications on behalf of the straw buyers, including false pay stubs and tax forms, according to the indictment.

Meanwhile, to support the inflated sales prices, Alonso A. Muxo, 48, an appraiser, would prepare fraudulent appraisals, the indictment said.

In at least one case, the indictment says, Roger Rosario, an employee of Regions Bank, provided a fraudulent verification of deposit in connection with a mortgage loan application.

The defendants would skim off the difference between the sale price and the mortgage loan and pay off all the participants in the scheme, officials said.