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VISIT US ONLINE @ DSNEWS.COM Virginia rank: 43 90+ Day Delinquency Rate 2.24% Foreclosure Rate september 2012 Unemployment Rate 1.53% 5.9% year ago 2.30% 1.81% 6.3% percent point change -2.9% -15.6% -6.3% Top County Grayson CounTy 90+ Day Delinquency Rate september 2012 1.35% Foreclosure Rate 3.69% year ago 1.91% 3.28% percent point change -29.3% 12.7% Top Core-Based statistical area WashinGTon-arlinGTon-alexandria, dC-Va-Md-WV 90+ Day Foreclosure Delinquency Rate Rate september 2012 2.81% 2.93% year ago 1.81% 1.71% percent point change 55.1% 71.9% note: The 90+ Day delinquecy rate is the percentage of outstanding mortgage loans that are 90plus days delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the September 2012 foreclosure rate. All figures are rounded to the nearest decimal. The unemployment rate reflects preliminary September 2012 figures released by the Bureau of Labor Statistics. All other data courtesy of Lender Processing Services. IN THE NEWS Virginia Man Receives 14-Year Sentence for Bank Fraud A Virginia man received a sentence of 14 years in federal prison for carrying out "elaborate and sophisticated fraud schemes" that took millions away from investors and the government, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) announced. George P. Hranowskyj of Chesapeake, Virginia, pled guilty in July to conspiracy to commit wire fraud and conspiracy to commit bank fraud. According to court records, from January 2008 through August 2011, Hranowskyj and his business partner, Eric H. Menden, performed favors for insiders at the Bank of the Commonwealth in exchange for preferential lending treatment. They also assisted insiders in concealing the extent of the bank's non-performing assets by purchasing bankowned property. When the bank failed in September 2011, Hranowskyj and Menden guaranteed approximately $41 million in loans for the bank. Most of those loans were on an interestonly basis, and the two were regularly allowed to overdraw their accounts. Court records show Hranowskyj obtained loans by sending an email to a bank insider asking for money. The relationship between Hranowskyj, Menden, and bank insiders prompted employees to refer to the institution as "the Bank of Eric and George." "Hranowskyj treated this bank like he owned it, calling himself 'Big Daddy' to bank employees, overdrawing his accounts by $600,000, and demanding that the bank 'lower his rates ASAP' and cash his employees' paychecks even though his account was in the red," said Special Inspector General Christy Romero. In addition to his fraudulent activities at the Bank of the Commonwealth, Hranowskyj was sentenced for a separate scheme aimed at profiting illegally from historic rehabilitation tax credits. Hranowskyj and Menden falsified invoices for large construction projects, using them to apply for federal and state historic tax credits. The credits were sold to investors who wanted to reduce their own tax liability. In total, investors paid the men approximately $8.7 million for illegitimate tax credits, causing a loss of $6.2 million to the United States and a loss of $6.3 million to Virginia. "Mr. Hranowskyj's agreement to perform personal and professional favors for bank insiders in exchange for unfettered access to millions of dollars in credit exposes the ugly underbelly of how certain insiders treated the STAT INSIGHT 13,382 Completed foreclosures in the 12-month span ending in August in Virginia. Source: CoreLogic Bank of the Commonwealth as their personal piggy bank," said U.S. Attorney Neil MacBride. "His sentence of 14 years in prison sends a strong and unequivocal message that white-collar criminals will be held accountable for the often devastating impact of their crimes on our communities." Menden pled guilty for his role in the schemes in April and was sentenced to 11 and a half years in prison. Freddie Mac Posts Q3 Profit, Does Not Draw from Treasury A turnaround in housing helped drive Freddie Mac to a $2.9 billion profit in the third quarter, the GSE reported. Freddie Mac's net earnings dipped slightly under the $3.0 billion reported for Q2, but it helped keep the company from making any additional Treasury draws. In a report released in October, the Federal Housing Finance Agency—Freddie's conservator— said the McLean, Virginia-based GSE is not expected to need any more draws from the Treasury starting in 2013. Freddie Mac's comprehensive income of $5.6 billion in Q 3 allowed it to pay a $1.8 billion dividend on senior preferred stock. Year-to-date, Freddie Mac's net income and comprehensive income totaled $6.5 billion and $10.3 billion, respectively, at the end of September. The company's net worth was $4.9 billion, up $3.8 billion from Q2, according to the quarterly filing. "Freddie Mac's strong financial performance this quarter was driven by favorable market conditions, including the continued improvement in the housing market, as well as our ongoing efforts to minimize losses on our legacy book," said Freddie Mac CEO Donald H. Layton. Freddie's inventory of delinquent loans is at the lowest level in two years, Layton noted, and its higher quality new book of business now makes up 60 percent of its portfolio. The single-family serious delinquency rate was 3.37 percent at the end of the quarter, down from 3.45 percent at the end of Q2. While the seriously delinquency rate is higher than it was in years prior to 2009, it is significantly lower than the rate for the entire U.S. mortgage market: 7.31 percent at June 30, 2012, according to the Mortgage Bankers Association's National Delinquency Survey. Meanwhile, the multifamily delinquency rate remained unchanged quarter-to-quarter at 0.27 percent. 125

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