“Let’s Get Hopped Up And Make Some Bad Decisions”
A report from the Seattle Times. “Former Washington Huskies football player Scott Greenlaw led the mortgage company he founded to dizzying heights, 400 employees, a sprawling new headquarters and kegs of beer at staff meetings. Now he’s selling his house to avoid bankruptcy as creditors line up with lawsuits.”
“The sudden demise in May of one of Washington’s largest mortgage brokerages has left a trail of angry ex-employees, expensive lawsuits, unpaid taxes and government investigations.”
“Greenlaw was one of many mortgage-business newcomers who saw gold in doing refinances. His target clients: tarnished borrowers whose credit problems qualified them only for expensive, and highly profitable, subprime loans.”
“The problem with much of mortgage lending, Greenlaw told the Business Journal, was that loan officers lacked sufficient training and accountability. ‘You could be selling shoes yesterday and making loans tomorrow,’ he said in a 2004 interview.”
“Some loan officers, including Kerrie Saulness, came to Merit with years of loan experience. However, many had none and got their jobs by word of mouth along the Eastside club scene’s grapevine. The lure was fast money.”
“Merit did put loan officers through a 19-step program. ‘Loan Officer 101′ was 15 minutes long, as was ‘Mortgage Glossary.’ Thirty minutes were devoted to ‘10 Step Loan Flow.’”
“Saulness wasn’t impressed. She sat next to two 18-year-old loan officers. ‘They didn’t even know how to read a credit report,’ she said.”
“Former loan officer Nick Barry said wryly that many ‘had no idea what product they were selling, but they knew how much money they could make.’”
“Merit employees proudly posted their résumés, plus photos of their luxury cars and drinking parties, on various Web sites. One loan officer had come to work fresh from being a Hooters Girl. Another solicited clients for two endeavors: writing mortgages for Merit and selling marijuana paraphernalia on the side.”
“Indeed, several Merit loan officers boasted online that doing drugs was a favorite pastime. ‘Let’s get hopped up and make some bad decisions,’ wrote one beside a photo of himself grinning broadly.”
“Former employees also said Merit regularly provided a keg of beer for some staff meetings, but Greenlaw said that, no, it was actually two kegs, and employees were free to bring in six-packs on Fridays. Asked about rumors of drug use in the office, Greenlaw said, ‘We just never checked.’”
“When interest rates rose and the lucrative refinance business slowed significantly, Greenlaw gambled that he could increase revenue by adding loan officers who could complete more complex loans. That didn’t work, and the overhead sank him, he said.”
“Was it really that simple? Pressed, Greenlaw admitted it wasn’t. ‘Buybacks were high,’ Greenlaw said, without giving details.”
“In other words, Merit’s loan officers executed mortgages that were so flawed that the investors who bought the loans from Merit forced them to buy them back. A longtime broker not affiliated with Merit said such buybacks are ‘extremely rare.’ ‘It will bankrupt most mortgage brokers because most don’t have the resources to pay off a loan that is purchased by a lender and bounces back,’ the broker said.”
“Ordered to complete a loan for an elderly homeowner who was incapable of understanding it, Loan officer Sunny Hoppe said she refused. ‘Merit’s whole attitude was, ‘Get the deal,’ Hoppe said.”
“Saulness said she also tangled with her boss. ‘It was highly promoted that you overcharged the customer because they’re subprime and they deserve it,’ Saulness said.”
From Lew Sichelman. “Home buyers who bite on houses that come with free vacations, cars or other sales incentives may be surprised to find out, sometimes too late, that the places they want are not worth what they thought.”
“In the eyes of lenders, these and the dozens of other ‘concessions’ sellers are dangling in front of potential buyers have a dollar value that should be accounted for by the appraiser, if not deducted outright from the selling price, when determining the true market value of the property.”
“If the appraiser is aware of the concession, he’ll make the adjustment accordingly. But if he somehow misses the incentive, the lender ends up ‘mispricing’ the loan for the risk involved. That’s the last thing any lender wants. But ‘it happens all the time,’ according to Douglas Vincent, a collateral and appraisal risk expert in Plano, Texas, with 20 years experience in the field.”
Wow. All I can say is wow.
yes, and that is just one sleazy mortage company down. How many more to go ? I’m looking at you Lennox with your “no Brainer” loans.
these are the kind of people you find on that horrible Real housewives of OC show
http://www.bravotv.com/Real_Housewives_2
Look at the BIOs…silicon city. Fake, high maintenance, and decidedly unappealing.
Sounds like the tyoical resident of the OC in a nutshell!
I think at least half are involved in real estate
I think we if emptied our prisons of non-violent drug offenders, we still wouldn’t have enough jail beds to hold all of these criminal frauds. They deserve hard prison time and they won’t get it.
Ah yes Scott Greenlaw remember him and Tony Nelson in high school doesn’t suprise me at all after reading this artilce, they sound exactly the same as they did at Issaquah High!
isn’t the spread basicly fraud- if you click on 3 or more mort sites can’t you come close to eliminating the spread and humans ?
“Saulness said she also tangled with her boss. ‘It was highly promoted that you overcharged the customer because they’re subprime and they deserve it,’ Saulness said.”
This makes Glen Garry Glen Ross look like a Disney flick…
I guess that means the founder of this sleazy operation deserves it too.
I’m not so sure that many mortgage companies aren’t operating like the one in Bens article, or close to it . All these appraisals are wrong and they will just try to say they didn’t know about the concessions .Do you think that lenders want to be loaning 125% loans when 100% loans are risky enough in a falling market ?It’s a big bad problem that will be exposed ,but it’s still going on right now .
This is another problem with the NAR and the media downplaying the correction . People should know what risks they are taking on and it’s all fraud to me to not disclose the state of affairs . Just like the realtors and builders hiding kickbacks and concessions right now so they can still get a 100% loan on a inflated appraisal . This is the reason why the market didn’t crash more in 2006 and it’s not right .
It was a 15% drop Nationwide but they are makeing it look like a modest 5% drop by not disclosing the mortgage kickback /concession fraud regarding appraisals and loan amount .
The public doesn’t deserve this and I’m sick of it .
“The public doesn’t deserve this and I’m sick of it .”
There’s a sucker in every game and if you don’t know who the sucker is then most likely, it’s you.
There’s nothing going on in this market that can’t be figured out by someone who’s willing to apply some critical thinking and do some research. (yeah, yeah. I know that’s a vanished art in the US) If the public can’t be bothered to look after their own interests then they have to expect to be held down and sheared from time to time. The only tradgedy in this is that the prudent are going to get sheared right along with the sheep once the government bailouts are through.
“Merit did put loan officers through a 19-step program. ‘Loan Officer 101′ was 15 minutes long, as was ‘Mortgage Glossary.’ Thirty minutes were devoted to ‘10 Step Loan Flow.’”
Sounds like many of them are now ready to commence a 12-step program.
You can get your head out of there in just 12 steps? didn’t know that…
“Former employees also said Merit regularly provided a keg of beer for some staff meetings, but Greenlaw said that, no, it was actually two kegs, and employees were free to bring in six-packs on Fridays. Asked about rumors of drug use in the office, Greenlaw said, ‘We just never checked.’”
Don’t ask, don’t tell…
“Former employees also said Merit regularly provided a keg of beer for some staff meetings, but Greenlaw said that, no, it was actually two kegs, and employees were free to bring in six-packs on Fridays”
I see the problem, he should have had 3 kegs. Idiot!
Shades of Enron, except many more small players deserving of the same fate.
Ben, This party is still on going in many, many areas. On Dec. 1, you posted the Bloomberg link about New Century Financial and how the sub-prime bonds are going off at much higher pricing. This ties right in with my new hobby: Tracking mortgage fraud in Sacramento. I have seen five of the last ten sales at JTS Estates at Lincoln Crossing involve mortgage fraud. Guess what? Two of those loans were made by New Century Mortgage. These idiots are all looking the other way, collecting fees and offing the loans to third party investors, hoping the buyers make payments long enough to avoid the buybacks.
I just sent an e-mail to the CEO and SVP, loan production, at New Century, along with copies to the FBI, DRE, Placer County DA, and the Sacramento Bee. This stuff makes me ill. New Century lent $370,000 ABOVE the MARKET VALUES on these homes. The loans exceed 150% LTV. What are they doing, what are they thinking. We are all going to pay a price for this.
I have created a program to indentify more of this stuff in Sacramento and I am researching 14 more cases to bring to the light of day. I am going to e-mail you a spread sheet shortly on the 5 loans in Lincoln. Put it on your Photo Gallery, right next to the photo you have of all the vacant Flipper homes in the Estates at Lincoln Crossing. Sheesh, the new Flipper motto seems to be “If you can’t sell it, get New Century to give you a $200,000 loan”.
….the last line should be “…a $200,000 CASH OUT loan.” The total loan amounts are $770,000 (per house).
Wonder if New Century is involved in any of Casey’s bad deals. Wouldn’t surprise me.
Well done, Paladin. Far too many people find it too expedient to look the other way. Once the searchlight is turned on these scams, the responsible authorities might finally be galvanized into action.
Paladin
I admire your resolve and I agree with your motives but I shouldn’t spend too much time on this stuff. You’re probably just spinning your wheels. I’m sure we can expect to see government hearings aplenty in the future as this boom and bust unwinds concerning what’s be going on in the “free money” mortgage business and the “hyped” real estate business with their, “Don’t worry, Mr. Client. We can cook the books so that you can get as much money as you need to complete the deal.”
We can look forward to seeing stern faced sanctimonious politicians (watch Hilary Clinton in hearings for a perfect “I care,” look) questioning these scams artists in scores of b.s hearings as long lines of ex-employees take the stand and put the blame on their ex-employer. Then we’ll have the usual parade of those who were conned (in this case fb’s) tearfully telling our “concerned” politicians they just didn’t understand what they were getting into. All the usual Enron, Wcom type b.s.
So, what’s wrong with this picture. Well, for starters, if you and I and most of the people on Ben’s blog know what’s going on and have known what’s going on for months if not YEARS, then the scumbag politicians in Washington also know. I include BOTH parties in that statement but they were/are probably getting some nice fat war chest election contributions off these companies so they don’t give a flying f**k as long as they get their part of the money cake. Even if it’s corrupt. Yet what did they do or what have they done to curtail these scams. Nada. Zip. Zero.
Don’t waste your time because I can tell you the final outcome. A couple of poster boys for the real estate and mortgage industry might get 25 years jail time but will only serve a couple of years in some comfortable Camp Fed. Like Charles Keating in the Savings and Loan rip off, I doubt if they will do too much time because I’m sure they will find a politician they can pay off to get them a “Get Out Of Jail Free” card.
Truth is, we all bitch and moan about these rip offs and scams from Haliburton and Bechtel screwing the tax payers to banks ripping off customers to banks screwing credit card holders for 20% interest but nothing changes.
Welcome to America where, if you can afford it, you can buy ANYTHING.
From 2000-2006 in America even if you couldn’t afford it, you could buy anything.
Mike,
We will shut these lenders down by providing the markets with constructive knowledge their loans are over encumbered. When the lenders have to buy them back from the MBS pools, then they will pay a heavy economic price. Hitting them in the pocketbook is where it makes sense. This will stop “pronto”.
Last year, my credit cards were stolen from my locker at 24 Hour Fitness (by the way, the typical gym combo lock can be “shimied” open in .2 seconds. The cop showed me.) All my friends laughed when I said I would find the thief and get him arrested. Long story, short version: Got him identified in 18 days, tracked him to a Palm Springs Wal-Mart in real time thru current CC use, and the police killed him during the arrest.
Paladin (Have Gun Will Travel reads the card of a man…..) Wire Paladin, San Francisco
You go Paladin…. Cynicism is understandable, but courage and tenacity and truth are the all-too-rare traits that actually do pay off. Sad so few possess them.
Good post, Mike…ya got it nailed.
This stuff has been going on for years. Who do you think owns one of the largest chains of “quick/fast pay stores in the US. Wells Fargo Bank but you won’t see their names out front. It would hurt their great name but they’l be happy to take those 30% and up profits for people who need cash advance on their monthly pay checks. Also, how about all those universitys that have agreements with credit cards banks/ telephone charge cards and receive up to 2% kickbacks. No business can go on campuss without their knowledge. You don’t think all those free hand out hats and t shirts are going on without the admin. approval, do you?
My freshman son, being away from home got one of those telephone charge cards of $75.00 limit as he wanted to talk with his girlfriend out of state. He in a few months ran up a bill of 650.00 ” over his limit”. When he enrolled in another school, the university had put a hold on his transcript because his card balance was still out standing. By this time the old man found out and after several calls and weeks went by, I called the president of the university and spoke with his secretary saying unless my son’s records were not released, I was going to the press and telling them about this scam on students. With in 20 minutes I received a call telling me my son’s records would be mailed out that day. About a month later, my son received a statement showing his card had been canceled and there was no balnce due. One only knows how many others are out there that simply do not know. Only after reading “Credit card Games. etc was I aware of this. Not only our are youth but adults are being set up daily by the banks, lenders and many simple do not really understand. In a perfect world this would not happen but greed is with us. It is only after really understanding what credit is and there are rules we must learn should we take on debt. It seems our banks as well as others want to keep us in a fog. When will a good course in grade school and high school be taught about credit and basic math,debt etc. That is a dream but that doesn’t mean we should not try, otherwise our children will be at the hands of the money lenders.
Folk can lionize old Milton all they want, but all I see of his efforts is the Gordon Gekko world we’ve created today. More wealth? Oh yeah, for the players. Rational self-interest? There’s a reason our founding fathers wrote as they did. They acknowledged our all-too-human tendencies, and labored to limit the worst of them. Miltie and company have succeeded in loosing the demons and we’re in the balcony, watching the third act. Loathe as any sentient being can be to advocate government regulations, I remain convinced correct ones are the single method remaining to mitigate the effects of untrammelled corporate power.
Key Arena. Safeco Stadium. It nauseates me. Pepsi machines in schools. Kids shooting kids for jackets and shoes. We live in a corporate-created hell, and we’re living what we deserve. Whether our legislators toss the goodies to the great unwashed, to Exxon or Halliburton or big agriculture, our culture, and our nation, loses.
Apologies. Rant off.
Well said, Madam.
And here here.
The only problem is that what a lot of these mortgage brokers are doing is already illegal, the government just isn’t doing anything about it. Bailing out the dupes that fell for the scam just means that they’ll get right back in it again without thinking the next time.
I spoke with one of the newly elected members of congress shortly before the election. I mentioned that I expected one of the big issues this coming year would be mortgage fraud, suicide loans and foreclosures. She did not let on that she knew what I was talking about. Apparently it had not come up much during the campaign.
I assume the veterans have at least some idea that this is going on. They held a couple low profile hearings last year. Actually, I suspect the democratic leadership is well aware of the issue and is planning to spring this once the blame game gets going.
I have been following entitled land deals in the greater Sacramento area (along with other area’s) for all of 06….Their are some very nervous land speculators right now….With both house and material prices in what appears to be a free fall the “real” value of the land is very difficult to determine…I have spoken with some pretty desperate people recently….Next item in the equation that will fall will be “Labor” prices IMO….IF that happens in any significant way, the down turn could accelerate….
track some lot sales on ebay = cheap !
scdave: I for one would be very interested in what you have found and will find regarding land deals. Since the builders aren’t really developers they will almost always prefer land already entitled. I have read and heard about ridiculous prices being paid in ‘05 and ‘06. Seven figures per acre on dirt that was going for next to nothing 5 years ago. The builders didn’t care about price when they could raise their unit prices every month, but now that is reversing. How will these guys off load this land going forward? Obviously they will cancel options they hold, but what about those that closed? Write downs and stick it to the shareholders?
cool- how long is the buy back period for most sub prime ?
flatffplan, I thought the borrower only had to make 1 payment and the originator is off the hook. However, the originator putting the loan into the bond pool must make some representations and warranties, such as solid due diligence, value, inspections, etc. So if the first lauch tranch wants to kick the loan out anytime and has the “goods”, I think these loans may be able to be forced back on the lenders almost anytime. What do others know about this?
How do you “force back” a note if the orginator is dead and gone?
Most loan originators need an entity rated single A or higher to guarantee the buy back option, if the loan is tossed from the pool. That is why Deutsche and HSBC are listed on a lot of the buy backs and foreclosures. They go on the hook for these shady originators. It worked well in an ever appreciating market. It will eat up a lot of earnings now and in the next few years.
usually the buybacks are required when the the first payment is missed or it goes into foreclosure within the first 12 months. Almost all subprime loans being produced now are 2/28s, so the payments don’t adjust until after the first two years.
So is it any surprise that lenders are doing 12 months no payments (where they tack on twelve payments to the debt and pay themselves the first year)? Sure Mr. MBS buyer, we *guarantee* that these loans will perform the first year!
Two separate classes of forced buybacks. NFP (No first payment) loans, and EPD (Early payment defaults) which are loans that go sour within the first six/twelve months.
Buybacks will quickly kill a mortgage brokerage, cause most of them can’t afford to eat the loans they write.
Paladin,
I’m all for what you are doing. Perhaps we need more and more people to start bitching about this, so that it’s “common knowledge”. By doing so, we may be able to make it hard for the politicos et al to ignore the situation.
Hmmm… grass roots campaign… could work.
If I can finish my day to day responsibilities, I may take up this cause as well…
thanks!
Inspector, Thank you for your support and your offer to toss in with my lot. Scoot forward in this blog to “Sellers Feel Like They’re Giving Their Money Away” and search for Paladin. Big news…..and we are making a difference.
Paladin
Have Pen, Will Travel…reads the card of a man, knight without armor in a savage land…fast gun for hire heads the calling wind, Paladin, Paladin, where do you roam….
I have spoken with quite a few brokers over the last month that have started to realize the liabililty in what went on over the past two years. With investors hawking 80/20, bad fico, stated income, interest only investment loans, the money to be made was huge. The wholesale reps would show up in the office with white-out and scissors and the games would begin. I implored my loan officers to remember that there were two signatures on the application, the borrower and the loan officer. The wholesale rep, his/her branch manager, the underwriter would be long gone when this piece of $%## hit the fan. It appears that these loans are coming home to roost, as I have heard the word “deposition” used in alot of conversations over the past few months.
Wait until felony, fines, and Folsom start making their appearence. New “F” words for the F’d Loan Officer…..who now gets to join the F’d Borrower….hmmm.
Paladin, I disagree that you are just spinning your wheels here. You are putting these guys on notice that someone is tracking their actions and that they “may” be held accountable. Unless the offenders know with absolute certainty that they will not be pursued for criminal misconduct I believe they will modify their actions going forward. I hope you are putting “cc fbi, etc” on the letters you are sending the lenders so they know how far you are going with these allegations! Keep up the good work!
I agree, auger. If you have the evidence then go for it. This is the only way we can see some justice done, even if they don’t take down everyone, at least some of these bafoons will see cell time.
Auger and CA Guy, scoot forward to “Sellers Feel Like They’re Giving Their Money Away” and search Paladin. First contact made with lender, 3 more to go. Imagine their surprise when they figure out they lost $250,000, instead of creating $37,500. Hmmmm. Paladin
I love depositions. Easy 16 billable hours and well worth it to the client if done properly.
I hope more of these guys start signing. The easy money is gone. Back to McDonalds for these a$$-clown fraudsters.
During this whole time did we not discuss this crap going on? Meanwhile the FED and MSM claimed all the easy $$$ was being used wisely.
Why do we keep denigrating burger flipper jobs at McDonald’s? At least a McDonald’s fry cook is doing something productive and isn’t committing fraud on a daily basis. It also takes a degree of skill to assemble a hamburger.
LOL. True. I know someone (a mktg exec) who atteneded the McDonalds School in Ill. I think it was 3 days - which is a lot longer than this stories 15 minute training.
That’s a seminar; not “the school”…..
To complete what’s referred to “HU”, they have to complete extensive training just to get there and “HU” much more complex than you can ever imagine. Before anyone cops a superior attitude, most beginning grads make in excess of $50k in salary, bonus, and benefits. Supervisors at $70k and Operations Directors base at $100k.
The owner of the franchise also can make $250k plus per store.
“Before anyone cops a superior attitude”
So we can’t criticize anyone anymore. I am no PC - never have been and NEVER WILL BE!
McDonald’s Hamburger U is very tough and I believe 6 months long. Only longtime managers and franchisees go to Hamburger U it is literally taken as seriously as Crotonville at GE.
Lou, bless you. You are absolutely correct. Burger flipppers provide 10xs the value to society of any house flipper, who is just a parasite. The fraud creating loan officers probably aspire to work in congress…..a slight upgrade from felone?
Or hedge fund/private equity sleazeball. Talk about obscene amounts of money made for nothing except taking risk with OPM. Hopefully, this will also see the light of day shortly.
AMEN! Our society seems to over reward producing nothing.
Give credit where it is due. These guys did produce something: A trail of bankruptcies and broken lives which US taxpayers will eventually get to help clean up.
yeah, besides, the bush administration reclassified those burger flipping jobs as manufacturing jobs.
You don’t consider spending money on drugs, booze and hookers to be wisely spent money?
I’m getting sick of this crap. Ready to pack up and move before TSHTF
Me too;……
The only trouble is, move to where ? My husband wanted to move to New Zealand. I told him no, I was born here, I stay here. We have to clean up our own messes, straighten up our own-screwed up, OC-emulating society, and pay the piper(s) for letting things get to this point, I think. I’m looking at some bankrupt, foreclosed property around Detroit come January’s next major auction — I want to go to one and see what happens, even though I don’t want to buy anything right now.
This is my home too and I love it. However, I am only one out of 300 million people. The majority of people are more interested in the idiotic TV shows and sports than the fact that our country is being stolen out from under us while DC is too busy stealing all they can before our economy implodes. I am planning to move to Australia after I finish my graduate degree.
The US doesn’t have a market lock on idiots. Stupid people are a cheap, global commodity.
I am planning to move to Australia after I finish my graduate degree.
Australia rated #6th Best Country to Live In.
US @ #16th.
No muh NUMBA #1, GI!!!!!!!!!!!!!!!!!
That is why I am in So Cal.
People are ice skating in hell….I was at a party last night talking to a mortgage broker (30 something and just started her own company) and she admitted to me that the market was “CRASHING”….in CA. But she could not bring herself to equate Seattle/WA with CA because (all together now)…”we are different”.
I asked her about suicide loans and she objected to the term “suicide”. Her case in point was a retired guy whose home is worth 2 million who just took out an interest only loan of 500K. Her point was that this allowed a man on a fixed income (but with tons of equity) to minimize his payments even though he is eating up his equity. I call this case VERY off nominal but didn’t want to make a scene. I guess you look hard enough you can put a rosy spin on anything…..
She also admitted that as a mortgage broker she makes a lot more money off subprimes but tries to steer her clients towards traditional loans when possible (but lack of downpayment makes this more and more difficult). When I asked her about “no qual” loans she said that in the last 6 months there has been a “crackdown” on shady loan practices (e.g. qualifying dead people, loan payment higher than gross income, etc.).
At least she admitted the market is headed down and the runup was “outrageous”. I saw last night how hard it is for people who make their living in the “industry” to face the truth….they canont grasp that the “light at the end of the tunnel” is actually an oncoming train.
‘I asked her about suicide loans and she objected to the term “suicide”. Her case in point was a retired guy whose home is worth 2 million who just took out an interest only loan of 500K.’
The proverbial retired guy with two million in accumulated equity is probably as valuable to the mortgage lending schysters as the 90-year-old lifetime smoker in perfectly good health is to the cigarette companies.
Upton Sinclair said…
“It is difficult to get a man to understand something when his salary depends upon his not understanding it.”
and the next best is…
“You will find the truth is often unpopular and the contest between agreeable fancy and disagreeable fact is unequal. For in the vernacular, we Americans are suckers for good news.” Adlai Stevenson
Perhaps it is something about living in sight of that big volcano causes for most people all sense of proportional risk to eventually just fall away.
“Merit was great fun for five years, but now it’s time to move on and give it another shot,” Greenlaw said. “I’m looking forward to the challenge of coming back and proving to people who Scott Greenlaw really is.”
Please don’t. We already know who you are - a slimy bastard!
Is there any question in our minds that this POS is a Republican?
No, he’s a democrat, did you miss the part where they found 90K in frozen bills in his freezer?
LOL. Doubt it very much. And the 90k is chump change compared to the looting the CONS have done.
Both of you are the type of morons that let this country get to this point. Your idiotic blind allegiance to The Party over your country will lead the USA down the sewer. Try growing a brain and coming up with your own ideas and opinions instead of going straight to the daily talking points flyer that your corrupt party sends to you
Amen Jerry. This isn’t a political blog, if you want to spew that trash go elsewhere, kthx.
I nominate Jerry for Post of the Year
I second the nomination. Even in here, where we would expect a lower lemming quotient than among the sheeple at large, partisan toolboxes continue their blind allegiance to the Republicrats. Hey dipshits, these two parties have had a stranglehold on the levers of power for generations now, and where has it gotten us? They BOTH suck, and there’s not a dime’s worth of real difference between them.
He is worse than a Republican or a Democrate, he’s a Husky!
And, more importantly, Scott, we don’t care….
Easy come, easy go…
Paladin,
Good work.
This is a lot of money these creeps are dealing with, make sure to watch you back.
Good point. If this was Rubles and it was President Putin, I could relax a bit…..
““Former loan officer Nick Barry Barry”
Brings new meaning to the term “toxic loans.”
I think this story is a plant.
Thank god regulation isn’t the answer. Can’t let a little control get in the way of profits, right?
You can thank Milton Friedman for this. His basic premise that profit is the only thing that matters, even above ethics, has poisoned the minds of many Americans. They have absolutely no problem screwing over their “fellow” Americans for a buck.
Nice patriotism, by the way.
In Ol’ Milt’s defense he said you shouldn’t break any laws and there were plenty that were broken.
There is some valuable info regarding appraisal standards in the Sichelman piece. It seems doubtful to me that very many of the loans funding new home purchases these days meet the standards.
I become very skeptical when reading about appraisers “inadvertently missing a few things.” It seems like all of the incentives in the current environment are aligned to favor those appraisers who are willing to deliberately inflate valuations.
———————————————————————————————-
In September, three out of every four builders were offering some sort of stimulus, according to the National Association of Home Builders. For the most part, they were offering options and upgrades like landscaping and granite countertops. But some were offering all-expenses-paid holiday trips, spa memberships, new cars and the always reliable help with financing and closing costs.
One particularly imaginative New York condo builder struck a deal that gives his buyers access to a fleet of luxury vehicles – including a Rolls Royce – owned by the Manhattan Classic Car Club.
But some sellers are fraudulently jacking up their prices and then returning the difference in cash to their buyers at closing. That is, they are selling a $200,000 house for $220,000 and handing the excess $20,000 to the buyer at closing. Those kinds of shenanigans could land both the buyer and seller in hot water.
According to the Uniform Residential Appraisal Report that most housing valuation experts are required to use, market value is defined as “the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus.”
The price, the form commands, should represent the “normal considerations … unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.”
It is incumbent upon the appraiser to read the sales contract and be familiar enough with what’s going on in the marketplace with regard to concessions to make the proper adjustments in his valuation. If he inadvertently misses some things, he won’t be getting many more assignments. If he overlooks them, it borders on fraud. And if any party to the transaction puts pressure on him or otherwise tries to coerce the appraiser into looking the other way, they become a party to an illegal act.
“Providing an accurate valuation is always difficult in a changing market, and the use of non-real property sales incentives adds to the challenge,” says DeAnna McCann, chief marketing officer of eAppraiseIT, a Poway-based appraisal management company. “The question appraisers have to ask is, ‘Is this condo really worth $250,000, or is it worth $250,000 because it comes with a new car in the driveway?’”
Oh well , in this day and age we just pay buyers thousand of dollars to sign on the line to buy a house . No more down payments but rather concessions and kickback fraud to make a sale . Anything to keep the party going .
Where would the market be right now if not for the kickback/concession fraud ?
I propose that the only reason the market didn’t crash in a more brutal/fast manner this year is because of the fraud /kickbacks .
It”s not hard to find some unqualified buyer that will buy a house for nothing down ,no move in cost ,if you also give him 20K in his pocket . Remember when the realtors were mining for renters ?
“I propose that the only reason the market didn’t crash in a more brutal/fast manner this year is because of the fraud /kickbacks.”
It is scary to think that our top economic policymakers are facing a situation where in order to avoid a complete real estate meltdown, they have to turn a blind eye to rampant fraud, or possibly even act to aid and abet its continuation.
It is scary to think that our top economic policymakers are facing a situation where in order to avoid a complete real estate meltdown, they have to turn a blind eye to rampant fraud, or possibly even act to aid and abet its continuation.
Well put and that is exactly what is going on. If this country was serious about mortgage fraud, enforcement would be way up. It is pretty disgusting.
One loan officer had come to work fresh from being a Hooters Girl
And guess who was doing all the appraisal’s on her originations?
Why of course it was a former Hooter’s workmate duly licensed by the good state of Washington’s appraisal standards licensing board.
Wonder if she wore her Hooter hot-pants on her home inspections?
RE: eAppraiseIT
Dirtbag appraisal managment company owned by Wells-Fargo, who hires low-ball fee appraiser’s who promised to deliver work in a 24 turnaround period for their own originators.
No conflict of interest here.
I saw a guy today who was driving a Hummer. Brand New H2. I said, “How bad is that on gas?” He said, “It’s a company car and I’m a nanny.” “A nanny?” I said. He said the kids were in their teens and the parents in their 30’s. The mom owns a real estate company and they take a lot of vacations. I wonder what will become of them? They sell Title Insurance, Mortgages etc in all 50 states.
Ideas anyone?
How old were they when they had kids? (Please, no one who had a child out of wedlock or as a teen get offended by these comments)
Easy come easy go, here is the REIC prayer.
“Dear God, Please let RE boom again, I promise I won’t piss away all of the money.”
After the 80’s bust in Texas, there were bumper stickers to that effect.
I said it a long time ago ….. As the market goes south people will do desperate thing and it’s already apparent in the way that people are putting together purchase contracts .
“It’s a company car and I’m a nanny.”
It’s a four-ton tax writeoff.
They sell Title Insurance,
These f*ckers and E&O underwriters for appraisers will be going down big time.
Hopped up on goofballs, and making loans!
Hate to say it, but I can easily foresee stories of FB’s going postal in mortgage brokerage offices in ‘07.
Just like daytrader offices a few years ago.
We should get in touch with these people and find out where they’re employed next so we can spot the next bubble. Commodity brokerages perhaps?
I had the same idea! Maybe they’ll all immigrate to China.