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Unformatted text preview: taxpayers to pay through new taxes, a shift in budget expenses, additions to the federal deficit, or some combination of these measures. Fighting Fraud – Several provisions are included in the new law to strengthen the government's power to fight fraud, including expanded authority for seizing property of civil and criminal wrongdoers, and other stiffer penalties against “white–collar” criminals. Stronger Regulation – The law creates a new Office of Thrift Supervision to regulate state–chartered thrifts. Specific regulations include: • The Resolution Trust Corporation (RTC) is created to take over approximately $100 billion worth of real property from insolvent S&Ls–to sell at the best price. 1-6 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 1. IMPORTANCE OF REAL ESTATE FINANCE
• Thrifts must raise capital to at least three percent of assets by 1990, and S&Ls that fall below the minimum capital ratio are severely restricted in their activities. Federal regulators may override state regulations that allow S&Ls to make nonmortgage–related investments such as speculative real estate deals. Regulators can impose civil penalties up to $1 million a day on thrifts that defy orders to stop unsound practices. • • Consumer Provisions – The S&L rescue legislation has a series of provisions aimed at providing financing for moderate–income first–time homebuyers and lower–income renters, as well as general provisions to make home mortgage money more available. • S&Ls are now required to have at least 70% of their assets in housing related activities. This requires S&Ls to channel more of their lending to home mortgages and away from speculative commercial real estate ventures and high–yield, high–risk junk bonds. S&Ls are required to establish programs to finance low–income and moderate–income housing. Government agencies are required to use residential properties from liquidated S&Ls to provide housing for low...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.
- Spring '10