Special report: Flipping, flopping and booming mortgage fraud

Great. Buy the tapes from the TV real estate info-mercial scammers and learn how to do this fraud.

“Ultimately, the expectation is lenders will be forced either to improve due diligence, or face being pushed out of business as investors burned by sloppy underwriting during the boom urge them to adopt fraud prevention tools.” (fta)
—- Not if our government keeps bailing them out with our money !—- Big Government leads to no accountability.

Virtually every large scale enterprise that the U.S. government gets involved in results in gross tax payer dollar waste. This is the nature of vast pools of money with politicians in charge, and can be seen everywhere in the world and throughout history. This is why voters must demand very limited government. Governmnet must only do the very basic things that a government absolutely must do….or our tax burden will continue to rise….forever.

JMure wrote:Big Government leads to no accountability
__________________________________________
You cannot have it both ways. If you want private enterprise with no government backing the US economy, since 2008, would be similar to that of Haiti. If you want govenment backing to ensure the economy is secure, to bail out Freddie Mac, Fannie Mae and other high risk lenders, then you cannot complain about accountability. The taxpayer footing the bill for fat cats high pensions and high risk scams is not good for American. There is no accountability for the fat cats. Give me big government over high rolling fat cats any day.

The obvious problem with the American real estate purchase process is the massive layer of unregulated, nothing at risk mortgage brokers whose only incentive is getting a signature on a mortgage. If the lending institutions were required to hold the mortgages they lend then it would be in the longer term interests of the lender to do all of the due diligence required to make sure the borrower was a) legit b) had the ability to repay. It would also reduce the anonymity and velocity in the current system, making the lending process more often a transaction between known parties for a property that is known to the lender.

The U.S is the most corrupt nation in the Universe, corruption is her #1 export, and this is the corrupt magnate training ground, the hub of all corrupt activities world-wide! This is where the most corrupt entities around the universe come to learn their trade. So, no surprise here, it is more damning to see the infestation of these corrupt activities world-wide, perpetrated by former U.S administrations insiders (including former presidents) and their indigenous cohorts doled out on unsuspecting naive foreign entities. I have seen properties values appreciate an astounding 10,000 folds in a matter of years in my little former ‘paradiso’. All because Israeli development companies, partnered with Lebanese and Indian developers decided to infiltrate our government with bribed corrupt government officials to redevelop huge sections of cities under modernization banners, displacing people from properties that their families appeared to have held pre-western civilization, that even colonialist couldn’t evict them from. Now only structures that corrupt government officials and their criminal civilian cohorts, not to mention the oppressive ‘despotize’ military establishments, sworn to debilitate their own people as oppose to protect them and the criminal foreign expatriates can afford to live in fill this so called ‘modernized’ sections of town.

So much for demo-crazies, capitalist-thieves, market drove out economies and their one vote man in the garbage system. The U.S and her corrupt systems ruin the world miserably! God only knows when semblance of normalcy will ever return. Terrible shame! So, no surprise here, this is just a taste of what you’ve been exporting to the rest of the world under the guise of development, for decades. Your system is an abomination on humanity. It promotes darkness, degradation, inequality, subjugation of true human interest, discrimination, class superiority and rewards the absolute worst in the human psyche. Go take a walk in your filthy darkness!

This article is both wonderful and sad. It’s wonderful that it has finally brought the light of day to the pyramid scheme called “real estate”. It’s sad that it has taken this long to give it a voice. Folks, this is the root of the problem. If being rich required a PhD, I’d be all for “keeping the gov’t. out of business”. The only problem is that the “hucksters” would simply grant each other fake PhD’s so they could get into the club. What’s missing from current business practices is the US is Integrity. This is becoming less and less importent as has been explained to me when I’m told, “it’s just business. Nothing personal.” Therin lies the problem. It’s not “just business” people. It’s civilization and civilized people are defined by either written or unwritten rules. Regulation is required.

very good article. now if only we could hold banks accountable for basically giving the money away.. we’d be on the mend.

The problem is that the government if trying to make it easier for people to buy homes. That’s nice, but that shouldn’t be a function of government. I bought my house when I was 27. I did it with a conventional loan. I never missed a payment, and now at 51, that 20-year mortgage is already just a fading memory! It takes discipline to own a home, something people looking for a hand out obviously don’t have. Of course that kind of person is going to default. If he wasn’t the kind to default, he wouldn’t be asking taxpayers for a hand in the first place. Open a loser’s club and you’re going to attract losers. Duh.

Corrupt? Yes. Giving the mortgages to unqualified people was corrupt. Spending $155 BILLION of taxpayers money on a bailout was corrupt. Borrowing money from China to prop up a failed system was corrupt. Knowing a subsequent 2/3 failure rate was corrupt. Packaging and selling these mortgages to foreign countries was corrupt. The entire system is corrupt. This has nothing to do with the banks, and everything to do with the corrupt politicians pushing the banks to give away money because “everyone should own a home” and it would buy them votes.

The Banks and Insurance companies need to start paying people for tips about fraud. A successful prosecution should result in a reward being paid to the informer. Once we start putting people in jail, this problem will vanish. The list of people being jailed should include the seller, the buyer, the realtor and the appraiser as all of them were party to the fraud.

The cycle of life will always be with us. Restrain government, impower individuals and TEACH the rule of law.
The banks make the loans, if they fail fannie and freddie pick them up. Big government corruption at work.
Excelent points WalterDoodah

What if there was a brief moratorium on purchasing secondary homes?

If the ONLY people who could purchase a home for, say, 90 days were people who were going to use the home as their PRIMARY residence, what might the effect be on housing prices?

My guess (as a looooong time home seeker who has been priced out of various markets by flippers as described in the article … garages for $400k?!? That’s exactly what the Los Angeles market looks like) is that prices would stabilize.

At the end of the temporary moratorium, my guess is that prices would once again skyrocket as investors got back into the “game” … which is what it is, to them.

What do y’all think? Should the government impose such a BRIEF, temporary moratorium?

The people who say there should be limited government are right. The people who say there should be regulation are right. How can this be? It’s simple really, the government’s job is to create a level playing field and you cannot do that without regulation. However, over the years, regulation of real estate lending has become a complexity of over-reaching bureaucracies that no one can keep track of (witness the size of the Dodd-Frank Bill). The simple fact is, simple regulation works best and the free market will do the rest. A good start would be if the government did its job instead of trying to put people into houses they cannot afford.

You consider this new? I mean there is nothing wrong with another story about flipping houses using straw buyers and bogus appraisals but it is a pretty old scheme. You can see it dramatized in old Sopranos episodes, and you can read about it in the 1980s S&L cases, and in stories throughout the 1990s and the last decade.
You guys should have tried to put a new wrinkle in it: using the internet, or something like that.
This is a bit disappointing.

You consider this new? I mean there is nothing wrong with another story about flipping houses using straw buyers and bogus appraisals but it is a pretty old scheme. You can see it dramatized in old Sopranos episodes, and you can read about it in the 1980s S&L cases, and in stories throughout the 1990s and the last decade.
You guys should have tried to put a new wrinkle in it: using the internet, or something like that.
This is a bit disappointing.

Why are people in the business working the scams? Maybe, because the big banks have been on a crusade to destroy Lenders and brokers alike. Do you realize that 85% of the national Lenders, (the banks that table the money at closings and sell to the secondary market) have been run out of business? Do you realize that this was done point blank by the big banks, when they stopped buying from them and shut down their lines of credit that they operated on? Do you realize that the Dodd-Frank bill recently signed by the president will strip brokers of their yield spread premium; which is their primary way of getting paid?

The industry insiders have been stripped of their livelihood, many of them feel like getting revenge on the big banks that are doing this and also need to still make money to live.

The mass media doesn’t tell the whole story.

It’s unfortunate none of us can seem to agree. if banks had not open the flood gate with estated financing, interest only and pay option loans. Maybe we’d be having a different discussion. What did you think the outcome would be where anyone who could fart could buy a home regardless of credit, job, income etc. Then lenders start crying their bottom line is 5 % lower and they receive 50 billion or more in some cases like B of A, WF, CHase and the like. Does anyone know how many banks rec’d TARP $$? “ITs 20 pages long”. Don’t you think they knew this would happen? The homeowner get MHA program that does not work and blamed for this castastrophy, because they don’t want to pay becasue there sitting in a home $100k unside dwn. Last time I checked we didn;t underwrite any loans, approve or fund those inflated prices created in the front yards of many homes when it was easy to flip a property. Finally, how can a home sell for 33k then 6 months later sell for 355k? What is the underwiters job, did the lender perform there own BPO/Appraisal prior to validating or approving this short sale, is the loan officer lic suppose to be in most states as of 7/29? What was the appraiser thinking here. Sounds like an inside job to me. Guys you have bank executive being going to jail or fired for falsifying documents and defrauding homeowner. Countrywide and WAMU come to mine. I agree we need to fix many issues regarding the real estate market. Those who have the money make the rules and thats the problem! The list of those to blame extend from the clients to the of the food chain.

If my eyes are not deceiving me, I can walk out now and do a scam on my own. The stastistics above show a projected SEVEN-FOLD growth scams from 2005 to end of 2010. All the ways to scam have been firmly grasped by the writer just researching this article. So how hard is it for the professional scammers to repeat it over and over again after tasting first blood?

Either the system or the people running it is outright dumb or a bit of both. Change the system, plug the holes. In the first example, how come people in the industry have no idea the property was sold for $25,500 at foreclosure and they loaned money based on a $355,000 assessment? Excuse me?

Sorry Nick, but my heart does bleed like it’s rape or murder because it’s the public that’s being raped and murdered financially. You don’t need any geniuses to fix this. Just responsibility and common sense. Maybe common sense is not that common anymore with morons running the country. Sorry, I have to stop.

GOD BLESS ALL OF US.

Consider this just about everything has been tried to solve many of our countries problems. However, due to self interest at state and fed level and a Gov that prefers to protect or bailout the super rich over the masses. The only way we as a people can create the change we all want to be apart of is. We must put our personal interest aside, come together as a people, be willing to make a few more sacrifices as a group only then will the madness stop. You see we all complain about our world but we don’t want to serve it, we want change but we don’t want to move out of our comfort zone to make a difference. Many of us don’t even treat our neighbors well. GOD BLESS U ALL