http://seekingalpha.com/article/93069-mortgage-fraud-is-on-the-rise-infecting-the-gses The Mortgage Asset Research Institute came out with its quarterly report which showed mortgage fraud is on the rise. This is curious, considering the heightened scrutiny that banks should be making during the "credit crunch". I just wanted to point out that the states which show the highest incidence of fraud are the same states which have eliminated the attorney and have substituted "settlement companies" staffed by non lawyers. This would lead one to conclude that underwriters are still churning out loans to sell them into the secondary market to keep afloat, borrower representations and appraisal review be damned. The only difference is, the investment bankers who participated in the private market for these Mortgage Backed Securities [MBS] will no longer create or trade these ticking time bombs amongst themselves. Instead, underwriters now need Fannie Mae (FNM) and Freddie Mac (FRE) to pass along these tin nickels to some poor investor. Guess who is going to foot the bill to pass along these lemons? If you have been hearing a lot of talk about the Government Sponsored Agencies, and you don't know your CBO from your MBS, a very engaging article entitled "How Resilient are Mortgage Backed Securities to Collateralized Debt Obligations?" was presented at the Hudson Institute on February 15, 2007, by Joseph R. Mason and Joshua Rosner. This was an early warning of the credit crisis and is an extremely entertaining and enlightening read. Why is it interesting? Because the academics are pointing out what the real estate practicioners have been seeing on the ground for years. We can talk about it on our boards and blogs but somehow, it doesn't really exist unless it gets printed in a journal. Go figure. Finally, we all may be reading a lot of articles concerning the government "bailing out" Fannie Mae and Freddie Mac, but you will see the words "investors" "government" "market" and many other financial terms, but one word I rarely see is the word "homeowner". Sometimes, financial analysts and talking heads forget that before you have a mortgage you need to have a homeowner. If we have these Government Sponsored Agencies, and the banks are getting money at 2 percent, and a 30 year mortgage is hovering at around 6.87 percent, how are the GSEs helping the homeowner? Explicame, por favor.