Foreclosures and unemployment are still significant problems three years after the peak of the recession, and the only thing we get is two CEOs and a couple of other executives getting strung up by the courts.

And even that is not guaranteed, as the government doesn’t even have a solid definition for subprime loans. If SEC prosecutors muck up the case and fail to get the definition in check, then these executives can walk away scot-free.

I have to be honest, though: what does this all mean?

Mudd and Syron may or may not be charged, but all this will be moot if the same problem crops up again. What’s to stop public and private entities from dragging the entire country’s economy into another greed-induced bubble? Already we are seeing this with student loans – a problem that doesn’t just involve material items, but the future of our entire population.

This should be a welcome respite for our battered real estate market; giving it a breather before 2012 comes rolling around the corner and foreclosures come down harder than they ever have.

This is by no means a permanent thing, though.

I am all for letting everyone relax a little bit this holiday season, no doubt about that. What I’m worried about is people getting lulled into a false sense of security because of the reprieve they’re getting this. If you’ve been late on your payments, have received a foreclosure notice and/or are facing imminent eviction, then this is the perfect time to start weighing your options and planning for the future.

The moratorium will last for less than two weeks; leaving enough time to either negotiate with the banks or start packing up for a big move. The last thing you want to do is get hung over by the Christmas cheer only to wake up and get shoved out of your home once New Year ends.

523 students have made their signatures after a single day.

Look, I don’t know if you’re for or against student debt forgiveness, but WILLFULLY defaulting on a debt will bring you some serious headaches in the near and distant future. You will be heading straight down a path of low wages and tax refunds as the debt comes ‘round and you feel the weight of your decision.

And don’t forget that even if the terms of the debt were bad, it was you (or at least your parents) that penned your name to that document. Unless the government steps in and forces the creditors to do something about your debt, then you still have to bear the sole responsibility for that debt – especially since failure to do so will serve as a yoke on your neck for the next couple of decades.

If you really want to go toe-to-toe with the system, then at least do it in a way you won’t set yourself up for financial suicide.

And these aren’t shady lenders we’re talking about here. Banks like U.S. Bank, Wells Fargo and Fifth Third Bank all have their own pseudo-payday schemes running around.

This loophole, however, can be cut off should the amendment proposed by Sen. Jack Reed (D-R.I.) this Friday push through. Sen. Reed is looking to address the processes that banks and lenders use to evade the intentions of federal laws; preventing them from going over the 36% APR set by the government.

This is big news for the veterans that these lenders love to prey on, as the banks won’t be able to keep them locked down in exorbitant loans anymore. Funny thing is these banks have failed to comment on their account advance schemes. They’re not even trying to justify themselves anymore.

In any case, we will have to wait until after Thanksgiving to see if the amendment passes through the Senate.

The Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) have announced plans to phase out the network of lawyers they hire to handle foreclosures.

Consumers can expect to be given the responsibility of choosing their preferred law firms to process their defaults and foreclosures. This will allow these people to handle their own affairs and select lawyers they know and trust.

This comes as a major but expected embarrassment for the lawyers connected to the Retained Attorney Network used by both government agencies. These lawyers have been accused by various regulators, lawmakers and consumer groups of irresponsibly handling foreclosure papers; even resorting to false signatures to speed up the process.

The massive influx of “robo-signatures” has forced many mortgage servicers to suspend almost all foreclosure activity in 2010 – leading to an immediate drop in foreclosures.

Those foreclosures, however, will begin piling up once mortgage servicers resume their activities – something that will significantly hurt the real estate market for years to come.

Linick is the inspector general of the Federal Housing Finance Agency (FHFA), and released this report Tuesday.

Fannie Mae utilizes a large network of law firms to deal with the foreclosures it receives; allowing Fannie Mae to receive discounted rates with these firms.

A Fannie Mae shareholder had alerted the agency to possible abuses in legal filings of foreclosures around late 2003, while an outside law firm conducted an independent review in 2006 in response to the shareholder’s concerns.

Linick’s report also indicated that the FHFA was increasingly aware of foreclosure-related problems in 2010. This was after the FHFA conducted a field visit to Florida and found numerous instances of documentation problems from the law firms. The FHFA singled out Fannie Mae’s volume-based processing model coupled with the flat fee rates as the two primary reasons why these law firms could get away with these irregularities.

The FHFA did not request a response from Fannie Mae despite these concerns.

This report is the second in two weeks wherein the inspector general highlighted lapses in the FHFA, Fannie Mae and Freddie Mac.

Marimow then points out five top mistakes:

Overestimating property value
“Just because your home was worth $300,000 seven years ago doesn’t mean it’s still worth that. If you don’t have enough equity, you’ll receive a higher-than-expected refinance offer.”

Hesitation to lock-in
“If interest rates fall after you close, you can always refinance – but at least you’ve locked in a great interest rate.”

Overemphasis on interest rates
“When it comes to refinancing, interest rate is important. But so are the points, fees and loan terms. If you want to avoid making a big refinancing mistake, look at the big picture.”

Ignoring shorter-term loans
“These loans would reduce the amount of interest paid, though they do carry more risk. If you stay beyond the fixed period, your rate could rise.”

Not reading the documents
“When you’re getting a mortgage, or refinancing your existing loan, there might be 80 pages of documents. If you don’t read them, you’ll never know what your loan terms are.”

The original interview can be found on CBS Money Watch here.

This Department of Commerce uncovered a scheme wherein real estate companies Split Rock Realty, Split Rock Title and Options Plus Realty conspire to buy properties

The scope of the fraud ring itself is something that might come out from a conspiracy novel: all parties involved would work together to falsely inflate property appraisals, grossly overstate income and assets, greatly understate liabilities and make borrowers appear credit-worthy.

All these individual schemes would lead up to massive transaction fees ranging from $25,000 to $70,000. Everyone in the scheme would receive some form of kickback while the purchased property falls into foreclosure or goes up for a short sale – especially since the fees are higher than the money needed for down payments.

In short, the sellers find themselves handing over money to the buyers via the complex machinations of the fraud ring.

Commerce Commissioner Mike Rothman says “these weren’t just ordinary crooks. These were industry professionals who knew the system, and willfully took advantage of it.”

Minnesota’s Department of Commerce has already taken action against the conspirators, from meting out stiff civil penalty fines to the revocation of licenses and bans for conducting business.

Yet the industry collectively holds its breath as the new fiscal year arrives this October 1.

This is because the Housing and Urban Development (HUD) did something last October that took everyone in the industry by surprise: it lowered the interest rate floor from 5.5% to a flat 5%.

This was a welcome change for borrowers as it effectively caused them to receive more money while originators would take advantage of the influx of refinances. Investors, however, were shocked by the announcement from HUD and were afraid that a refinancing rally would cause assets pricing to drastically drop down.

These fears did not materialize as home equity loans normalized over time.

While HUD is not expected to make any major changes to home equity loans as a whole, investors are still a bit jittery about the whole ordeal.

Torrey Larsen of Security One Lending explains.

“[Investors] are concerned about whether FHA drops any bombs… Every October they’re holding their breath a bit.”

Larsen goes on to say he is confident that everything will work out in the end, even if “it just wasn’t exactly a barrel of laughs getting back to normal.”

That is still markedly better than the first quarter of 2011, which saw 1,805 mortgage-related jobs go due to a very depressing mortgage market.

That means 2,269 mortgage-related jobs were lost this year – and the pullout of big players in the home equity loan market played a major role in that loss.

Wells Fargo decided to pull out of the home equity loan industry; laying off of about 2,500 employees in the process. This is around half the mortgage-related layoffs in the second quarter.

Bank of America – another major lender that decided to pull the plug on home equity loans early in the year – was also reported to slash 954 of its own mortgage workers.

MortgageDaily.com, however, is cautiously optimistic that the layoffs could stop once the demand for mortgage picks up – which may not be too far off, considering that mortgage rates are reaching historic lows.

It is speculated that both Wells Fargo and Bank of America decide to withdraw from the home equity loan market because they perceive the value of foreclosing on the elderly is eclipsed by the damage to their reputation.