Bits Bucket And Craigslist Finds For January 21, 2007
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
November 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
% of homes in foreclosure
anyone have the number for 1990 ?
Saturday Cape Coral Auction Results:
Single-family home, 777 Coral Drive, Cape Coral: Bid $525,000. Value $862,410
http://tinyurl.com/2al7y7
Hey, that should have been: Wish: $862,410 Value: $525,000
Guess those end users never showed up!
Some Greater Fools came:
Mary and Clarence Hilbert of Cape Coral don’t know what to expect now that they were successful bidders at $390,000 for a waterfront Cape Coral home on Northwest 41st Avenue.
“We believe it’s an investment property. It’s in a good location,” said Mary Hilbert, 68. But they might decide to live there, she noted.
What’s with this one?
Single-family home, 2706 SW 54th Terrace, Cape Coral: Bid $400,000. Value $255,810.
That is “assessors” value.
The “valued” figure seems a bit loose—its either the “wishing price”, previous list price, appraised value, or tax assessor’s value. Basically anything but the market value.
It says “appraised value” which probably means this “value” is most likely based on the tax appraisal. Since we have the equivalent to prop 13 in Florida, tax appraisals are limited to around 3% higher each year if owner occumpied. My guess is that this is a home which was occuppied.
A common trick by newspapers down here is to quote tax appraisals and simply call them appraisals. Note how the article showed one house auctioned way below the “appraisal” ..translation…the home is not owner occuppied and subject to updates in value. To understate the problem in realestate in this area, the articel then shows another “appraised” home which is owner occuppied and has a way undervalued appraisal.
Here in Naples in Port Royal, I know people whos homes are appraised by the tax collectors at $900,000. since they have lived there for thirty years. Next door another house may have just its land value at $4,000,000. This is due to the fact that they do not live in the house all year and are subject to periodic reevaluations….not 3% a year.
I suspect that many people are lying about their residence down here to avoid the higher taxes. There is an obvious problem as the old timers that bought in the 60’s, 70’s and even 80’s pass away and leave the property to their kids. These kids can not afford the property taxes and will want to sell out for what they can get.
I call it a “geriatric time bomb” over California and Florida realestate.
“I call it a “geriatric time bomb” over California and Florida realestate.”
No time bomb here in Cali the parents tax basis passes on to their kids.
1. don’t they pay something to list at the auction ???
hey folks if there’s 300 people there that’s top dollar……….take it
Estero residents Greg and Kim Seiss were there to sell their condominium in The Greens, but left disappointed. The condominium is valued at $163,000, but bidding stopped $120,000.
“We really didn’t expect too much,” said Greg Seiss, 25. The couple will keep the condominium on the market, Seiss said.
Geez, only about a 25% haircut off appraisal. Pretty good for Florida right now. These people will regret not taking that.
25 !! When I was 25, I was too busy partying let alone buying.
Btw: Their age just reminded me of UK property downturn in UK in early 90’s. I remember a recently married couple buying a 1 bed appartment. They had long period of negative equity where eventually, after they divorced, he took over the note. He finally sold it about 3 years ago for same price. He hated the place as it was dumpy.
I wonder if the financial issues of being tied to the place was a factor in the divorce. I remember them talking about “mailing in the keys” and walking…
Auction costs w/bid reserve….
I called my buddy who does auctions and he said there’s a % of the reserve sellers have to pay the auction company if it’s not met. Add that in to their carrying costs…….
If seller accepts high bid…..buyer pays the premium.
If seller rejects high bid…..seller pays the premium.
He does, from time to time, accept an item w/o a seller reserve premium if it draws a lot of attention and can boost attendance….rare, but it does happen.
“We have to think outside the box. We’ve got to make things happen,” said Jeff Miloff of Miloff Aubuchon Realty Group Inc.
If an auction is their idea of thinking outside the box they’re in trouble.
Outside the box? Hmm, night classes in something else other than real estate.
Roidy
Jeff really needs to start thinking inside the box, since his next job will be the fry station at Jack in the Box.
Single family home 5252 Nautilus Drive, Cape Coral: Bid $385,000. Value $690,000.
According to Zillow:
Sale History
08/25/2005: $569,900
02/01/1978: $75,000
That’s a $185k haircut in 18 months (not counting auction expenses). Doubt the FS will be afford to close the sale.
Sacramento Mortgage Fraud Update 1/20/07
Many of you have followed my frustrating pursuit of justice for a suspected mortgage fraud case where a flipper/Realtor got stuck with 6 houses and sold 2 of them at $300,000 over market value. The buyer (and probably the seller) received 100%, 80/20 sub prime financing from First Franklin and Long Beach Mortgage (aka Washington Mutual). This happened in October 2007 and these houses have been vacant and abandoned since the purchase. This all takes place in a little town of Lincoln, outside of California.
It has been a long struggle these last few months. I submitted the basic suspected mortgage fraud scheme to the FBI in writing on October 9th. Just for grins, I anonymously copied the Realtor on the cover letter, because she had 4 more houses on the same street. Within days, the Realtor disconnected her cell phone and her brokerage office claims they never heard of her. It is pretty hilarious. She also cancelled all the listings she had with herself and listed her properties with a Keller Williams agent in the neighboring town of Roseville.
Every now and then, I would call the FBI and try to follow up on the fraud case, which I identified as Hillwood Loop (you may see photos right here on Ben’s blog, slides #6 & 36). I was getting nowhere. Let me tell you, the FBI has some important priorities, but none of them involve customer service. The calls basically went like this:
FBI, “How may I help you?”
Paladin, “I want to follow up on my report of mortgage fraud”.
FBI, “How much money did you lose?”
Paladin, “None”
FBI, “Then how do you know there is a crime?”
Paladin, “Hey, if I saw a murder, I would not be dead, but I still would want to report it.”
FBI, “O.K., how may I help you?”
Paladin, “I want to report mortgage fraud.”
And this would go on for a few minutes until it was clear this ape on the other end of the phone was a receptionist and could not get his arms or brain cells around the concept of a third party reporting an observation of mortgage fraud. Finally, I asked him if I could speak with an agent. After the third request for an agent, he put me on hold for 7 minutes. Then an agent came on the phone. This did not go any better. The agent would not give me her name and could not comment on whether they had an open investigation on this incident of mortgage fraud. Oh! To the moon, Alice! Basically, she said I would have to come into the FBI office in person for an “interview”. Hello, Agent Alice, I am the good guy here. I hung up the phone feeling somewhat frustrated and angry, wondering if there was a Taliban club in Sacramento I might join (just kidding, folks).
That was in mid October. You will be interested to know that 12 more cases of suspected mortgage fraud have been committed on Hillwood Loop, totaling over $2,500,000, since that very day. That’s right, folks. While the Feds slept, the caseload grew to 14! In the 90 days it took me to get the posse to saddle up, TWELVE more suspected cases of mortgage fraud have been completed at The JTS Estates at Lincoln Crossing in Lincoln, CA, just outside of Sacramento.
In the meantime, some of you fellow bloggers suggested I contact the lenders. You will be pleased to know New Century (4 loans) and First Franklin have opened internal investigations and have been somewhat cooperative. However, getting a lender to voluntarily declare a $200,000 loss on their own loan is like getting a 5-year old to admit he took some taffy out of the grocery store bin. Even if you find the candy wrapper, there is not much you can make him do about the taffy.
New Century and I have actually established a cordial relationship. They “examined” their first loan and determined all was in order and closed the case. Now that I have prepared additional evidence and told them they have four loans and $800,000 in losses coming, the case has been reopened. First Franklin has given me some lip service, after my sixth e-mail to the president, Andrew Pollock. The other lenders, WAMU (aka Long Beach), Alliance, Axiom (4), Bear Stearns, Mortgage Investment Lending Associates (3) have all done nothing. There are 5 houses in foreclosure on Hillwood Loop and every one of these lenders loans exceed the average outstanding balance of the houses being foreclosed!
The fact I work 60 hours a week at a real job, have a family and employees and responsibilities was all put aside, while I took 3 hours during workday one week ago last Thursday to go down to the FBI. I was not going to be denied. I was just upset enough to invest 6 hours on the prior Saturday assembling a 25 page, 7 section book outlining the 8 cases of mortgage fraud (I was not aware of the next 6 at that time). I was also just lathered up enough to make 10-copies of that very report, because I was going to get justice, even if I had to stand naked on the steps of California State Capital and hand one report out to Arnold himself. Actually, I mailed a copy to the Placer County DA, the U.S. Attorney in Sacramento, and kept the extras in reserve (more on that later).
Going to the FBI is not like picking up a deli sandwich. I pulled up the building and saw an armed guard in front of a huge vehicle barrier. Once again, the surrealistic exchange occurred.
FBI, “May I help you?”
Paladin, “Yes, I am here to report mortgage.”
FBI, “I am sorry, you will have to make that report over the telephone. I can not allow you to enter.”
Paladin, “I have already done that. They told me to come down here.”
FBI, “Oh, who are you meeting with?”
Paladin, “I don’t know, she won’t tell me her name”
FBI, “Very well go park over there and approach me without your phone, camera, recording devices, or weapons.”
This guard took me past the armored gates and into the lobby. There I walked thru a metal detector and was scanned with a body scanning device. I half expected him to pull on a surgical glove and ask me to bend over. I then asked the receptionist, seated behind bulletproof glass, if I could see the “Duty Agent” to report some mortgage fraud. He said fine and to have a seat. I did….for 25 minutes. The FBI is a pretty interesting place and the people who come and go make for good people watching.
However, I was freezing my toes off. I went over to the thermostat and read the temperature. It was 62 degrees. No wonder my feet were getting numb. I forgot to bring my cold weather gear to the FBI lobby. I asked the receptionist, in his cozy office behind the bulletproof glass if he could give me a little heat. He laughed (asshole) and said they could not figure out how to get heat to the lobby. Great, the agency that is charged with protecting the U.S. from terrorism, can not figure out how to work a thermostat (or does not care.). I tell him I am going to go stand outside, where it is warmer, but no, I am not to be allowed out on the grounds “unescorted”. As a compromise, he puts me in an interview room. Tick, tock, tick, tock, tick, tock, another 15 minutes goes by while I am in this little closed in room about the size of large desk. I am not happy and the steam is starting to escape out of my ears.
Finally, Duty Agent X (remember, he can not tell me his real name) enters a room on the other side of this tiny bulletproof glass window. I slide my 25-page report under the window and ask him to read it. A few minutes go by as he reads the report. The steam continues to leak out of my ears.
Then, I cannot help myself as I go off on a rant directly at him and the FBI. I tell him about my frustrations of trying to get this case opened, how I submitted the initial report in October, how all the people contributing to Ben’s blog are laughing at him, how the criminals are blatantly committing felonies at an alarming rate right in front if his eyes. I actually feel like an idiot and Duty Agent X is embarrassed, but I can tell right then, he gets it. For the love of God and country, it is a blissful moment of epiphany. This guy is on my side. He understands what I am saying. He gets it! He starts asking intelligent questions and the next half hour is intense. He is going to take personal responsibility to make sure I get an agent assigned to me and this case gets worked. Of course, I still don’t know with whom I talked and I have no way of following up with him.
In the meantime, because I had been getting nothing from the FBI, I called the Lincoln Police Department. The detective I called had never returned any of my calls for over 30 days. I kept trying. Finally, I reached him and we set an appointment for a Friday morning. Then he calls to reschedule, because he has to be in court that Friday. I leave him a message with some dates that work for me. Somehow, a Detective Sergeant for the unit calls me back and wants to know what I need with the detective. I explain I have developed a lot of information about mortgage fraud and we were going to review it. Now, if you have never dealt with a “Detective Sergeant” of a small town police department, let me tell you, it is very weird. I have never met a more self-important idiot in all my life. The “Detective Sergeant” would no longer let me talk to the sergeant and I could not talk with the “Detective Sergeant” either. He insisted I come in a file a report with an “officer on duty”. Wow, this is weird. Anyway, I was able to get into the police department and leave the 25-page, 7-section report. I waited around for 20 minutes for the “officer on duty”, who never showed up. I then left because I had an 8:00 AM appointment at my office.
The “officer on duty” calls me later that morning and takes down my information. I ask him if he has read the report. He says yes, and that he has discussed it with the “Detective Sergeant” and they see nothing unusual or illegal here. This is a civil matter, if it is anything at all.
Oh! To the moon Alice! How can this be happening? I am incredulous, but I can only lead the horse(s ass) to water, I cannot make him drink. I tell him thank you very much and hang up. I stewed on this for about 5 minutes and called the “officer on duty” back and start ranting at him! He started to see the light.
Paladin, “Can you tell me how a single woman living in an apartment in Fremont, 200 miles away, buys two homes on the same day for $785,000 each, paying $250,000 over market value? She now has them listed for rent, where the rental income will total $3390/month, yet her costs will exceed $11,500/month. That negative cash flow exceeds $90,000/year.”
Somewhere, a light bulb flashed in the back of a dim mind. The “officer on duty” agreed to go back and read the entire report. He calls me back in 30 minutes and tells me he understands the situation and they are opening a case. Wow, I am jubilant! After 90 days of trying, I have a confirmed case number at the local PD. The officer asks if I can develop some more information and provide some details. Yes, I am happy to help.
Ironically, 30 minutes later, Special Agent XX (he actually tells me his name this time, but I will not reveal it) with the FBI calls me and leaves a message to call him back about this case. Wow, the El Nino of criminal investigations is underway. A tsunami of crime fighters is now at my disposal.
Next, the Lincoln officer calls me back with more questions, telling me the whole police station is buzzing about this case. I am getting excited too. I tell him Special Agent XX at the FBI is working on this too. He asks me for the agents phone number, which I provide, assuming the Lincoln Police will want to work this case together. Unknown to me, the Detective Sergeant immediately calls the FBI Special Agent to tell him the Lincoln PD has opened a case file and the FBI is not to work on the case. Augh! To the moon Alice! By the time I return the call to Special Agent XX, around noon, he delivers the bad news to me. If the Lincoln Police claim the case, he will not work on it. I am again incredulous.
Now, it gets interesting. The Lincoln Police had asked me for more details, which I developed during lunch and wanted to e-mail to them that afternoon. I called the Detective Sergeant who sheepishly told me the Placer County District Attorney had kicked him off the case. What?
I had been submitting e-mails to the DA for several weeks, to which a deputy DA responded by sending me a victim’s consumer fraud complaint form to fill out. I was baffled, as they clearly were not reading their e-mails very closely. Never the less, I filled out the form and sent it into the DA, along with the 25-page, 7-section notebook. The book really made him sit up straight and take notice.
The DA called the State of California Department of Real Estate to inquire about my report. Keep in mind, I had submitted a copy of my initial fraud report to the DRE on October 9, but all my inquiries went unanswered. However, an inquiry from a DA gets a little attention and the DRE pulled rank on the Lincoln Police and took the whole investigation away from them.
So where are we today? The DRE and the FBI are going to work together. There are 19 mortgage fraud investigations ongoing in Sacramento as we speak. One of them is mine. The FBI agent and I are on a first name basis and we are proceeding to kick some ass and take some names. I have developed a program to identify more fraudulent loans and will be paying a college kid to work the program. I think I can provide 50 more cases within the next few days.
I also have a team in place and we are starting a web site to report mortgage fraud on a national basis. We have purchased 7 domain names and are building the site as you read this. Bloggers around the nation will be able to report mortgage and real estate fraud with a few simple keystrokes on this new web site. We will download this information directly to the FBI and other appropriate law enforcement agencies. We hope to stop mortgage fraud before it starts. We are going to notify lenders their loans are fraudulent, with a cc to the FBI!! The lenders will not be able to sell the bad loans into the secondary market. Bingo, game over. No lender is going to approve any more fraudulent loans if they know we will find them and expose them before they can off load it to some unsuspecting 401(k), pension fund or insurance company.
Within a few days, I will post the new web site address here and on other blogs. We are hoping you all will provide us with a boatload of information. We will also have a PayPal account and a snail mail address where you may send donations. It is all my seed money so far, but if we can raise 100 donations of $50 each, we will kick some more ass and take some more names and bring sub prime lenders and their destructive loan practices to their knees in very short order.
Paladin
“Wire Paladin, San Francisco”
Have Gun, Will Travel
Correction to paragraph one: October “2006″….and….outside “Sacramento” California.
My appologies.
Sounds like those bureaucrats where trying to throw you into a Catch-22 box! Good job and congrats!
Paladin, that is awesome. This is exactly what citizens need to be doing and what you have proven is that it takes enormous amounts of persistence to get through to government entities, but it can be done if one is willing to persist.
My hat is off as I bow in deference to…. Paladin.
Paladin for California State Attorney General (on the working hypothesis that you are not the Calfifornia State Attorney General
)
you’re the bomb
fax it in to the lender w an FBI header- that should get them interested
CC: FBI
CC: DA
CC: OHEOA
CC: Local news
CC: local paper
Fire up that copy machine!!!
Send a copy to Michael Moore! You never know…he could take an interest in this kind of expose’.
cc: Congressional representative
“That’s right, folks. While the Feds slept, the caseload grew to 14! In the 90 days it took me to get the posse to saddle up, TWELVE more suspected cases of mortgage fraud have been completed at The JTS Estates at Lincoln Crossing in Lincoln, CA, just outside of Sacramento.”
How far is that from the California State Capitol? And BTW, does our state government turn a blind eye to mortgage fraud, on the assumption that it is somehow “good” for the real estate market, and what is good for real estate is good for California? Or are they completely clueless?
Stucco,
Lincoln is about 30 miles east on I-80 from downtown Sacramento.
I don’t think the state government or anyone in the government believes mortgage fraud is anything but a terrible crime and bad for the real estate market. The biggest problem is that it is a “seasonal crime” and only takes hold in a rapidly appreciating real estate market, which occurs every 15 years or so. It is a crime du jour, so it goes under the radar.
I know for a fact the FBI and the DRE are getting very serious about it now and they are going to make some real examples out of some homebuilders, Realtors, mortgage brokers and appraisers. They are all collaborating to enact the crime and they will all go down together. The only problem is that the red lights and sirens have to go off before the regulating agencies awake to the magnitude of the problem.
You also have the government mentality at work. I asked the FBI to fund this new mortgage fraud web site, noting the power of the blog-o-sphere will do more in 6 weeks than 20 FBI Special Agents can do in a lifetime. I need less than $5,000. The response was “Well, that is not really what we are supposed to be doing.”
So I we will do it on the web, just for sh!ts and grins and a little entertainment to go with our popcorn. It is going to be some serious fun. I can’t wait to write the registered letters to the top 25 sub prime lenders with a list of their over encumbered fraudlent loans. The best part will be CC’ing the FBI, Fitch, Moody’s, & S&P.
Then the lenders GetStucco. Ye Haw.
Paladin
I am encouraged by your opinion. I voted for Arnold twice already, in part because I believe that he is more principled than the average politician.
What Arnold is doing with the tens of billions in bonds amonts the the same kind of mortgage fraud, just on a grander scale and with public property. All of the conservatives in office today hate to tax but love to spend and that will be their undoing.
To try to keep this on point: Remember that Arnold went house shopping in Sacto and couldn’t find one. Then he talked tough about the budget while starting and endless process of state borrowing. Then he came up with a reorganization plan that is completely unintelligible and going nowhere. He tried to take on the prison guard kickback system, but found education easier to cut back leaving the state still paying more for prisons than for schools.
leaving the state still paying more for prisons than for schools
Your premise for this statement is that schools need more funding than prisons. Can you prove that? How many students are there vs. prisoners? What about the fact that schools run for
oops, nuked by html.
…run for less than 8 hours per day and 9 months per year, vs. 24/7/365 for prisons. That just sounds like a talking point somebody found by blinding comparing X to Y, without consideration of other factors.
“What Arnold is doing with the tens of billions in bonds amonts the the same kind of mortgage fraud, just on a grander scale and with public property. All of the conservatives in office today hate to tax but love to spend and that will be their undoing.”
It looks to me like Arnold is anticipating higher future inflation, otherwise I don’t know how he thinks we could pay for all that additional borrowing.
That said, there is a huge difference between deficit financing of public infrastructure (which potentially pays big public benefits — try to picture California without a higher education system exporting education services to hordes of Asians if this concept is murky for you) and private financing of subprime mortgages (which pay big negative dividends of a high rate of future foreclosures).
The government beaurocracy is a big, slow moving beast, you have to hit it over the head with a 2×4 to get it to pay attention. I think that you will find that once it gets moving, it will ferret out alot of of info and be very difficult to sway. There is to some extant a preconceived reluctance to get involved in a case where the victim isn’t complaining. It’s the “If they don’t care, why should we?” idea. Good job getting them interested. I suspect that it’s all about persuading people that they can make bid money convictions without alot of effort. The more usual way to get them interested is by using the leverage of the media. They’re likely to pay attention to front page exposees or 60 minutes segments. Interviewer: “So what are you doing about thist terrible thing.” Official to interviewer: “We can’t coment on current investigations.” Offical to subordinate “Start an investigation on this and backdate it to cover my ass.”
“The government beaurocracy is a big, slow moving beast, you have to hit it over the head with a 2×4 to get it to pay attention.”
Very astute remark!
“The more usual way to get them interested is by using the leverage of the media.”
Good thing we have blogs, because the degree of market concentration in the media these days is extremely adverse to the kind of competitive climate needed to allow breaking exposes of discreditable activities to rise to the surface. For instance, suppose the money guys behind the scene had their dough invested in hedge funds which were pumping in cash for subprime loans; why would they want to kill the goose which was laying golden eggs for them?
Arrgh! That’s supposed to be “big money” convictions, not “bid money” convictions.
And you should have some sympathy for them. After all the first person you talk to has the job of “crank filter.” Their job is to smile and nod while people tell them about everyting from aliens are stealing our precious bodily fluids, the please prosecute Mr. Bernake because the federal reserve is unconstitutionally claiming that our currency is money, to my neighbor is using a mailbox that HASN”T been approved by the postmaster general. It wouldn’t take too many days of that before your eyes glazed over too.
Ah yes. The mistake a lot of us make is wearing our tinfoil hats to walk-in appointments with the FBI. Believing the State Psychiatrist is our friend is also generally unwise….
One guy walking into an FBI office probably cannot make a difference, unless he is pretty far up the chain. That is why Palladin’s plan to build consensus through the blogosphere is a good one (in the proud tradition of the Ben Jones model).
Any hope of a soft landing is gone. Paladin IS THE MAN!
Amazing how reporting a crime gets you nowhere unless you persist the way you did. Most people would have given up. The great thing is that none of these banks, realtors, law enforcement agencies (now or as a result of reports from your future web site) will be able to say they didn’t know, because your paper trail will point right back to them and their lackadaisical attitude. They will have to act.
I wonder if the RE agent implicated in your investigation is considering moving to another country.
“It has been a long struggle these last few months. I submitted the basic suspected mortgage fraud scheme to the FBI in writing on October 9th. Just for grins, I anonymously copied the Realtor on the cover letter, because she had 4 more houses on the same street. Within days, the Realtor disconnected her cell phone and her brokerage office claims they never heard of her. It is pretty hilarious. She also cancelled all the listings she had with herself and listed her properties with a Keller Williams agent in the neighboring town of Roseville.”
You bring back fond memories of sharing a place with three male housemates back during my college days. None of us were very gifted in the housekeeping department. If you went into our kitchen in the middle of the night and turned on the light, the cockroaches would scurry off in every direction.
That was so well written, it felt like a thriller of sorts. What is your “real” job? Just curious because you could be a superhero. I wouldn’t know where to begin with something like that. If I call the Sheriff’s dept, I usually get an annoyed clerk, with her “sigh, yes ma’am, can I help you?” I understand law enforcement types deal with scum and probably get jaded, but the people REPORTING the crimes are the good guys, right?
Patricia, such kind words from you. Thanks. I am just a regular guy who lives life with a lot of passion and tenacity. I hate liars and cheaters. You can thank my mother. She is one of the “uppity woman” who insists in changing the world when she sees a wrong.
Paladin
Paladin,
You rock brother.I really hope you get somewhere with all this.I’m stiing here in amazement this kind of fraud is going on.
Wow, your persistence is amazing. The website is a great idea. Once you get some media attention for your cause lenders and law enforcement agencies will not be able to ignore it.
Paladin, if you want to, and I am sure you do, to blow this case wide open than send a copy of your report, along with the details to a good local, young, hungry investigative journalist at say… the SacBee. This could be a front page story, than the idiots would HAVE to sit up and take notice. Good Work!
Your mom sounds like mine did “when you lie, you cheat, and when you cheat, you steal” I never forgot those words. You are definately one of the good guys
Dukes, I have copied a reporter at the Sac Bee for months, including the 5 e-mails I sent to lenders and the DA. I also sent him my writings today on this blog along with the link to the AZ Republic. I am not sure why this is not a front page story in Sacramento…..yet.
That one I can answer. The RE industry contributes a lot more to the bottom line of newspapers than maybe anyone else.
A serious report on this type of fraud would rattle the public’s confidence in industry so much that property values would collapse and transactions would simply stop (for a while).
Most likely your perky young reporters go to the RE people for their comment and the next thing you know David Learer (sp.) is on the phone with the SacBee president telling him that all ads will be pulled if the story runs - so it’s spiked.
In defense of the FBI and others, they do have a LOT of black helicopter kooks that come in from the street, so they are very defensive. It’s kind of like when my wife told my son’s 2rd grade teacher that he was the smart kid that the teacher will ever see (I taught him reading and math long before the ‘experts’ could get their hands on him), so give him some other work to keep him challenged (and, at that time, he was many years above the rest). The request seemed reasonable to my wife, yet the teacher was not very friendly. I later told my wife that EVERY mother HAS the SMARTEST kid in the world and teachers get sick of hearing it – the reaction, was totally expected.
What’s ingenious here is that real victims (i.e., 401k, future/present pensioners, and-later taxpayers) don’t even know that they’re being robbed – so it’s really tough for anyone to get worked up about the crime. The MBS system is brilliant in this regard.
You are on a mission!! I bet you get on the news as this type of Mortgage fraud starts to take apart some Big banks. I bet that realitor had no idea a person like you was out there. No problem pulling fraud on a bank but who would have thought a John Q citizen would go to the trouble you went to? Stupid lenders. Its like they get their money for free, and maybe they do?
Great work. I look forward to more of it and your web site.
Paladin,
This is a landmark effort sir! You have personally put the wheels in motion and I applaud you with humble awe.
Eagerly waiting for the new website and chance to donate to the cause.
Count me in, I have got a few candidates in Huntington Beach, CA.
I will donate to the cause.
You guys here at Ben’s site will be the first to know the IP address. I am counting on you to help me impress the FBI & DRE. And while we are at it today, please remember NONE of this would be possible without this blog and Lander at http://www.sacramentolanding.blogspot.com/ and Max at
http://flippersintrouble.blogspot.com/ .
I am following their leads. Put a little jingle in their PayPal accounts today.
Thank you, Paladin
We are behind you 100%. Go get em. I keep finding more evidence of fraud here at Indian Palms Country Club, Indio CA. The fraud is so obvious, and so out in the open, it is mind-boggling. The missing links were the buyer, seller, and lender which you have access to.
Lex, I have been trying to find you! You gave me two addresses of fraud at $585,000, which lead to some apartment renter buying a second place for $900,000. Your response was to give me 4 addresses, but I lost them in the fog of this blog. Can you repeat any address you suspect are fraud? Thank you, Paladin
Hello again. I have done some further research in this area. I am blown away at the extent of this, just in this one area. There have been several more highly suspicious sales. This company, according to the Riverside County assessor, address listed at:
69730 HWY 111 STE 18
Rancho Mirage, CA 92270
was owner of all but one of the following properties:
(sales price/date listed at Zillow.com)
$585,000 12-8-06 48909 Heifitz Dr, Indio CA 92201
$585,000 12-06-06 48877 Heifitz Dr, Indio CA 92201
$585,000 01-02-07 48829 Heifitz Dr, Indio CA 92201
$585,000 11-29 -06 49814 Wayne St, Indio CA 92201
$585,000 11-14-06 49454 Wayne St, Indio CA 92201
$570,000 01-05-07 49670 Wayne St, Indio CA 92201
$585,000 12-20-06 49868 Wayne St, Indio CA 92201
$585,000 12-14-06 49742 Wayne St, Indio CA 92201
$585,000 01-04-07 82551 Yeager Way, Indio CA 92201
$585,000 12-13-06 82530 Yeager Way, Indio CA 92201
$585,000 12-21-06 49267 Biery Street, Indio CA 92201
If that isn’t suspicous I don’t know what is. Nearly ALL the recent sales are fraudulent. Nearly nothing else is moving. I think they are going to make hay and leave as fast as possible. This is just unbelievable.
My apologies, all but two (not one) of the properties listed above were owned by the same realtor company.
I should elaborate that most of the comps for the properties hover right around upper 300s low 400s. It is possible that location/upgrades could push something up into the mid/higher 400s. Anything above that is laughable as these are all cookie-cutter mid-level country club homes. I have toured many in this area and they are all the same and definitely, indisputably, not worth anywhere near $585,00. Look at the comps for other sales not involving this company.
Question: If realtors of large companies - like remax - are found guilty of committing fraud, offering these ‘deals’ as not just something done via their individual sales but ones offered through their company, will their managers or heaven forbid, the president of their office or region be tried as well?
How big a group could be pulled in beside the individual players of a transaction? This is mind boggling!
Lex, Thank you for checking back and adding this data. I am going to enter it as a beta test on the new web site. With any luck, it will be up and operating on Tuesday.
Polestar, The broker for the company is just as liable as the agents perpetrating the fraud. They all have licenses at the pleasure of the DRE. They can all serve jail time at the pleasure of the FBI and the DRE…..and all of Ben’s blogging army.
I am anxious to find out what their game is. If it isn’t fraud I will be shocked.
Another correction. The proper address of the company was Suite 118, not 18. Excellence is in the details, as they say.
The Brokers are liable for anything their agents do. Whe you sign a RE contract the agent is not a party to the contract, the borker is. Agents are not allowed to do deals in their names, they must stand behind a broker.
WOW!
Do you mind if I post this story on my blog and send a copy to my local newspaper?
I have been debating whether to forward my fraud information to the local newspaper and tv stations. I wonder if that would help put a stop to this sooner, or if they would shrug it off. However, it is shamefully obvious the local bought and paid for newspaper has no interest in reporting anything damaging to the real estate industry, or at least paints it in the best light possible. That leaves the TV stations.
I am very excited to have access to this new fraud database. I admire Paladin’s tenacity.
Have at it Crispy. I just want to be careful my identity is not common knowledge.
I will hold off then.
I will link to your new blog.
Great work!
I hope everyone who thinks “government” is the answer reads your post Paladin.
I admire your efforts. I know, from personal experience, that your journey through the bureaucratic abyss is accurate. Once in a while you’ll find g-men who “care” but, more often than not, its an incredibly difficult undertaking. Why? What’s the incentive for them to “get involved”? Nothing. They’ll only respond when there’s a huge public outcry.
The solution in these instances (as with many other problems) is transparency. Accurate and complete details of these transactions have to be posted to protect buyers of property and investors in mortgage backed securities. Real estate “professionals” should welcome this development (if not encourage and facilitate it). Why? Because the more reliable the information is on which these critical financial decisions are made, the more sound will be the long term outcome for home buyers (the lifeblood of the industry). For crying out loud, if you can find out if the car you’re buying has ever been in an accident you should be able to find out all the relevent details of a home and its comparable area of real estate history….without mounting a major private investigation.
The sooner the real estate industry “gets this” the sooner their credibility will be restored. Instead, idiots like Lireah want to continue a regime of phony platitudes and obfuscation, a regime which may end in a disaster for all parties concerned.
Within a few days, I will post the new web site address here and on other blogs. We are hoping you all will provide us with a boatload of information.
I can hardly wait. Great job Paladin. I cannot give you enough praise.
Paladin, you honor your name. Those missed hours of work and family just bought you a nice piece of paid off real estate in heaven.
Paladin, in times like these when so many turn a blind eye to injustice and wrongdoing out of a sense of helplessness or apathy, it is inspiring to see an ordinary individual making extraordinary efforts to set things right. Keep up the good work!
“Inspiring” is exactly what came to my mind.
Paladin, you are superhuman. Godspeed!
Paladin-
You, my friend, are awesome. I was getting a headache just *reading* what you had to go through to get to where you are now in the process. There’s got to be one heck of a big reward somewhere down the line for you, much much bigger than all of us congratulating and thanking you for a job well done. Awesome stick-to-it-tiveness.
(Formerly known as ‘Auction Heaven in ‘07)
Paladin, you need to talk to some kids from your local university film school and get them to follow you around with video cameras for this.
Reality show style.
I say that in all seriousness, as your passion and the discoveries you are about to bring to light may literally shock the entire nation.
Get it on video. Make it into a show. Get it on TV.
Seriously.
And nice job, you crazyperson.
You just made The Hall of Fame.
Paladin,
I think Auction makes a good point about the film crew (and it would be relatively cheap/free!).
Been waiting for you to get this new site up. Can’t wait for it. Please post multiple times (over a few days) for those of us who cannot read every post on every thread at this point — so many new posters!
You are AWESOME!!!! Thanks for all your hard work!
Wow!!
I know that JTS got into some trouble several years ago with paying contractors under the table. They confiscated their pc’s and such. Some did jail time. JTS won’t allow sale signs on their properties if they’re still trying to sell.
Another fraud item is all the illegals that are getting paid under the table for cheap labor.
There are too many elephants in the room!!!
Lou Dobbs might like this report. Barack Obama might like it too
Gudos to you Paladin.
Looks like the NAR campaign has raised its ugly head in the Pensacola News Journal. In addition to the usual tactics covered in the article which have been documented at HBB, the REIC has pulled one out of their collective butt late in the game–a hideous new Florida specific tactic: HB’s are offering one year of “wind coverage” insurance as an incentive. Obviously this incentive dove tails nicely into the mortgage originator’s loan buyback obligation. I This is the first time I have come across this incentive which is sure to be a winner in roping in a few more GF’s in Florida. Have any of you guys from SF come across this one before?
http://tinyurl.com/yofdj8
P’cola, that “wind coverage” should included protection from the hot air the realtors and HBs are blowing around.
On a more serious note, I have long felt that the HBs ought to be subsidizing our insurance here in Florida, since their rabid development is one of the main reasons insurance is sky high. That would have been the solution to the insurance mess. Here’s a better incentive: wind coverage for as long as you live in the home, or no dice.
Just like the mortgage industry likes to use “teaser interest rates” to make loans, HB’s are adopting “teasure insurance premiums” to dump housing stock in Florida. Great short term tactic.
We very well may see a life time policy offered by the HBs in the future (or at least as long as they are solvent). What do they have to lose?
Arizona Republic is all over this same fraud scheme on the front page today!
Buy physical silver and gold and wait.
You forgot ammo. Don’t be such a tool.
http://www.azcentral.com/news/articles/0120mortgagefraud0121.html
Excellent find. Here is the link to the Arizona Republic:
http://tinyurl.com/2j84a5
One blurb from the AZ Rep article:
“Arizona was like a housing gold rush for speculators from California, Florida and Texas a few years ago,” said Detroit real estate agent and fraud activist Ralph Roberts, author of the book Flipping Houses for Dummies. “But home prices stopped climbing, and speculators got greedy. Now the cash-back scam is going to make the savings and loan crisis of the 1980s look like a soft landing.”
I don’t know if this is fraud but this person just paid 30K more than he should have.
http://tinyurl.com/267tem
This came from the reporter lurking here and seeing Paladin’s good work.
Only Ben can confirm but I bet that there have been some hits from the AZ Rep on the HBB.
The number of times “cash-back” appears in this morning”s craigslist for Phoenix. I wonder how many it will be in a couple days after the story gets around:
“Found: 532 Displaying: 1 - 100 “
When the true extent of this is known, we may discover that almost all of the tail end “appreciaition” in 2006 was cash-back baloney. Sellers would be very antsy at the true top of the market, and more willing to engage in the fraud.
Mazo, This is an excellent point. Think about all the 14 suspected mortgage fraud deals on Hillwood Loop in Lincoln. I believe there were 7 propeties sold at market prices, averaging $578,000 and even those had a lot of “builder incentives, so the TRUE market is $530,000. However, there were 14 “cash back” sales averaging $786,000, which is 48% ABOVE market. So the builder logs 14 sales that would not have occured and the value of the 21 sales is $175,000 over where the real market is happening. Put that fact in your Zestimate and smoke it. I bet the mortgage fraud numbers in Phoenix are really distorting the overall market value by 10-20%!
Mazo has an excleent point indeed!
How many of those 7 properties “at market price” would have sold for $25 to $50k less is there weren’t these 14 “suspected” mortgage fraud cases. 10% to 20% distortion… A good first estimate, but it could be even more (not much, but 25% overpriced is quite possible).
Thanks for the great work Paladin.
Neil
YAAAAAAYYYYYYY!!!!!
I have been seeing fishy deals for months here in Hawaii and wished I knew some way to report or investigate them.
This makes me so happy. Thanks Paladin.
To Jas, if you’re out there:
I mentioned a SV charmless box for $1.5M that I visited 2 weekends ago. You asked for the listing, but with schedules and tech problems on the blog, I never got back to it.
If you’re still interested: Eastwood Ave, Los Altos
http://tinyurl.com/2eks97
The listing says 1.7M, but they had already dropped to 1.5M when I saw it.
FYI: The yahoo url is only good for a few days, yahoo will shuffle their listings…
–
Thanks, JP.
I am working on The Silly.con Valley — NO BULL! — Housing Report. I will post the URL when ready.
Jas
there was a thread at Fatwallet yesterday about how someone knows this company that is trading at $180 and supposedly when the 1Q 2007 numbers come out they will drop to $120 or so. Stock screener shows Sears and CBOT as the only candidates.
The OP PM’d me back and said it was Sears. Wonder if the appliance business is going to blow up or if being a real estate play like Cramer said the value of the land is going to drop and there will be a huge write off
The new majority shareholder at Sears is running the surplus cash like a hedge fund. Be careful!
So is Chelsea Clinton. More precisely a bond fund specialized in junk bonds. Goes well with Papa and Mama Clinton. This family knows a lot about the junk stuff.
Hillary has just handed the White House to the Republicans in ‘08, provided they find a decent candidate who is not associated with the current regime. It’s quite diabolical really. And I think the housing bubble and bailout options will be a major issue.
“… find a decent candidate who is not associated with the current regime”.
First, that’s redundant. More important, right now it looks very unlikely that this will happen. I’m afraid the majority view of the people that will decide the Republican candidate is that the current administration isn’t “pure” enough so the solution is to nominate someone who is more “pure” i.e. extreem.
Actually, I was referring to a Giuliani type if not the man himself.
As a very conservative Republican I can assure you, there will be no “extreem” presidential candidate. Why? Because none are running. I don’t even think any EXIST anymore that embrace conservative principles.
So relax.
I welcome Hillary running. If that’s what America wants, so be it. I don’t think she’ll be any good but if America decides giving a socialist (who won’t admit being socialist) a try, fine.
“Hillary has just handed the White House to the Republicans in ‘08, provided they find a decent candidate who is not associated with the current regime.”
Agreed. This time is no different — the Democrats are still the champions of political self-immolation.
And the Republicans have at least one potential candidate who fits your discription…
http://blog.electromneyin2008.com/
(Not meant as a political statement — simply responding to TxChick’s point).
And there is this guy –
http://www.exploremccain.com/?sid=google
Oh lord, Stucco. My husband would hang himself from the pecan tree in the back yard if a Mormon were ever elected president.
There is one decent person running for the Republican nomination. Of course, he doesn’t stand a chance, but I will support him anyway.
http://blog.lewrockwell.com/lewrw/archives/012065.html
“Oh lord, Stucco. My husband would hang himself from the pecan tree in the back yard if a Mormon were ever elected president.”
If married gay couples in Mass managed to get over having him as their governor, then I suspect your husband will also find a way to cope.
Doesn’t make sense. SHLD already guided higher for the quarter.
Here is a copy of the Arizona Republic article talking about how the mortgage fraud Paladin has described in detail is all over Phoenix:
http://tinyurl.com/23ezrg
“Arizona was like a housing gold rush for speculators from California, Florida and Texas a few years ago,” said Detroit real estate agent and fraud activist Ralph Roberts, author of the book Flipping Houses for Dummies. “But home prices stopped climbing, and speculators got greedy. Now the cash-back scam is going to make the savings and loan crisis of the 1980s look like a soft landing.”
Believe me when I say this. This is going on in the large cities of Texas too to the same extent. You know, those place with no bubble, cheap housing, etc. Everything is bigger in Texas, including the fraud. It will be as bad as Florida, California or Arizona.
I wasn’t paying attention, but it appears that Austin had a short, sudden rise last year. It looks as if the get-rich-quick seminar scammers descended on Austin and jacked up the prices. I’ll wager there is a HUGE amount of mortgage fraud committed in Austin last year.
The Nigerians were all over Frisco, Texas, NW of Dallas last year and it was written up in the Morning Snooze. I await the fallout with relish.
Do you have a link? Thanks.
I posted that article in one of the Bits Buckets threads many months ago - it is on this website if you want to look for it. What txchick is saying is exactly correct - it was on the FRONT page of the Sunday edition of the Dallas Morning News in Oct or Nov of 2006.
That was the hot place to “invest” among my co-workers.
Why does this blog often beat the “experts?”
http://en.wikipedia.org/wiki/The_Wisdom_of_Crowds
Because “experts” are paid happy hookers. That’s why. Paid prostitutes.
That is one of Surowiecki’s points…
I know. I was just making a summary.
Interesting, GS. There is mob madness, which brings about undesirable mania and then there is group sanity, which comes about when sane thinkers of like mind gather together.
Here on the blog, I like to think we have group sanity.
…which comes about when sane thinkers of like mind gather together.
Here on the blog, I like to think we have group sanity.
I tend to disagree. Mob wisdom occurs when you have all of the opposing viewpoints in one place. (like the NYSE, for example). I love ben’s blog as much as the next guy, but it is definitely an echo chamber in here. We’d need more RE/stock bulls in order to get balance.
“We’d need more RE/stock bulls in order to get balance.”
Wrong. We need more RE/stock bulls who are willing to confront their natural tendency irrationally exuberant optimism with data.
…tendency towards irrational…
Do you think there’s zero irrational pessimism here?
And that’s my point: That the irrational elements on both sides get hammered out in the crowd.
Point taken.
I have yet to see a bull with a well reasoned argument supported with data.
The conclusion that I have reached is that it just isn’t there.
irrationally lax lending is the root cause.
Sunsetbeachguy –
In the spirit of debate, I will argue that lax lending is indeed the root cause, but that it may in fact be highly rational, given the secondary market which repackages MBS and sells them as investments with risk insurance provided by derivatives. As
as the loans can be resold and repackaged as MBS which ultimately trickles down to pension assets and taxpayer-insured hedge funds like Fannie Mae, there seems to be nothing irrational whatever about relaxing lending standards. Everybody gets to share the cost of providing risk protection, and the money guys in the subprime MBS supply chain all get a cut.
P.S. JP — I apologize if I came off as harsh, because I actually agree with you to a point. One should not construe the objective of this blog to be that of “getting balance.” Rather, it should be interpreted as a countervailing weight against the extremely narrow, onesided and uncritical voice of the MSM on the real estate situation. If it were not for this blog, the media would have no peer review.
No need for apology. I took your comment in the spirit of good argument. (My internet skin is thicker than that anyway.) And OT: I’m an avid reader of your comments when I read this blog.
If it were not for this blog, the media would have no peer review.
Couldn’t agree more, which is why I keep coming back here every so often, just to get my head straightened out . I don’t post too much cuz most of what I would say is already captured by other’s comments.
As the link points out, the title is an allusion to Charles Mackay’s Extraordinary Popular Delusions and the Madness of Crowds, published in 1841. One of the author’s points is that depending on the underlying rules governing collective behavior, group think can work for you or it can work against you. My personal view is that blogs tend to make the whole look smarter than the sum of the parts, by offering instant peer review and open discussion. Of course,
this could not happen without Ben Jones pulling levers behind the scene to keep trolls from hijacking the discussion.
A very high level example of a mechanism to foster favorable collective behavior is the US First Amendment right to free speech. There is a tendency for narrow political interests to act in opposition to First Amendment rights, and blogs provide a natural degree of protection for free speech.
I like your point about instant peer review in blogs. I’d never thougt about it that way. And of course, you sharpen a knife or an argument by rubbing it against something hard. It’s why I like the fact that lance still posts over at bubblemeter. As the token bull he’s handy (if sometimes irritating) to have around. It is difficult to have a forum that is both open enough to dissenting viewpoints to get that effect, but not easily subject to hijack by trolls and “Nazi” shouters.
As sacreligious as this may sound, I would go so far as to conjecture that blog peer review is potentially more effective at getting to underlying truths than academic peer review. The latter is prone to the group think of a cartel of experts with heavily invested interests in their own narrowly self-important world views.
I WELCOME opposing thought. The brighter the better. Either my ideas make sense and I can defend them reasonably or maybe I should reconsider them.
I’m here because I see a lot of facts, ideas and questions being raised by supporting data and logic. The more the better, the better reasoning, the better. I’ve been around long enough to know issues concerning pricing (in any asset category) are incredibly complex and dynamic YET often yield in one direction on the basis of ONE overwhelming factor.
Looking at all the factors raised by this blog that are grossly negative for real estate makes me very concerned with the economy at large. Could I be wrong? Certainly but I’m looking as much for the “good stuff” as the bad and what really concerns me is that the “Goldilocks” people out there either ignore or dismiss the RE factor completely. Either they don’t see it at all or they are disinterested in examining it. That’s my concern….are they right to dismiss it? Am I wrongly over estimating the implications of this RE mortgage debacle?
My 2c. I think what happens is that the people who post here have discovered one “truth” based on real evidence, and there is a lot of back and forth discussion reinforcing that perception. We really need that because that “truth” is not perceived as such in the mainstream. I guess that is what JP means by “echo”. However, if you read closely, the opinions on how this will play out are very varied, and that is when the discussion gets more interesting and invigorating. I think most of the frequent posters would welcome a bull with a good argument (and a very thick skin).
GS, regarding your comment on freedom of speech. Yes, it is awful when it is hijacked by people with an agenda. Throughout history, the best achievements have come through discussion (think of Greek philosophers and medieval professors). Every time the debate was hijacked, the society as a whole lost out.
“I like to think we have group sanity.”
And I am happy that all the articles and data that Ben posts are gleaned from the MSM and official sources, which helps keep our collective tendency towards group insanity in check.
Insanity is the rare exception in individuals - but in groups, parties, nations and epochs, it is the rule.
– Friedrich Nietzsche–
Because everyone is happy and nobody complains as long as “everyone” is benefitting, whether in actual dollars banked or confidence that their asset is now worth multiples of its former price. Once that is called into doubt and actual money begins to be lost, then things change in a big way.
Thats right. This piece has a peculiar explaination I find interesting. Rational bubble and irrational Bubble.
http://www.safehaven.com/article-6725.htm
Why do I get the impression the WSJ is in the business these days of helping last year’s real estate investers find GFs on whom to dump their depreciating assets? My off-the-Wall-Street comments are italicized.
————————————————————————————————
Investment opportunity is out there; just be picky
By David Crook
THE WALL STREET JOURNAL
January 21, 2007
The real-estate bubble has burst. Get over it. In areas that saw big home-price run-ups in the first half of the decade, prices are stagnant, or worse. New-home inventories are up; new-home builder stocks are down.
A kind of real-estate weariness has set in. Who’s the cocktail-party boor? The guy still talking about making a killing on Miami Beach condos.
Smells like a buying opportunity. Smells like Nirvana.
http://video.google.com/videoplay?docid=7197824358776485966
Probably not right away, because there’s still plenty of froth in the markets that saw the biggest price increases. But soon, you’ll see the real-estate investors – property vultures who buy when prices are low and then ride property manias to their crest – entering the market again. Would five years from now qualify as “soon?”
Even in today’s uncertain climate, novice real-estate investors can make money, especially in smaller properties that are easy to acquire and manage. Caveat emptor. Anyone who takes their investment advice from a fellow named Crook deserves to get reamed.
http://www.signonsandiego.com/uniontrib/20070121/news_1h21invest.html
how about the fundamental need for “hard money” before buying
even w negative sentiment you need credit tightening to get to reality in asset prices- I’m not seeing that
I’m seeing that, except progress is glacially slow. I don’t believe we will fully restore reality until 2010 or later. And I would go so far as to speculate that this is a political objective, as rapid corrections can spin out of control (compare controlled nuclear fission to the meltdown at Chernobyl, for a good metaphor).
You see, GS, if we have to wait until 2010, we will all need this blog to keep us sane.
Old story, but still pertinent; just in case it was missed:
Detroit foreclosures lead nation
Nationally, foreclosures are way ahead of last year.
By Les Christie, CNNMoney.com staff writer
November 13 2006: 6:49 AM EST
NEW YORK (CNNMoney.com) — Detroit led all U.S. metro areas in the percentage of homes entering foreclosure during the third quarter, at more than four times the national average, according to a report released Friday.
The report, by RealtyTrac, an online marketplace for foreclosure properties, also said that the foreclosure rate has spiked, up 17 percent from the previous quarter and 43 percent from a year earlier.
Blood in the water
The 10 cities with the highest foreclosure rates
City State Foreclosures Percentage
Detroit MI 10,316 1.25%
Ft. Lauderdale FL 8,431 1.14%
Denver CO 9,825 1.11%
Miami FL 9,380 1.10%
Dallas TX 13,422 1.01%
Indianapolis IN 6,383 1.00%
Ft. Worth TX 6,854 0.99%
Atlanta GA 13,562 0.94%
Las Vegas NV 5,215 0.87%
Memphis TN 3,929 0.70%
Source: RealtyTrac
James Saccacio, chief executive officer of RealtyTrac, attributed the increase to the broad slowdown in home sales and price growth and to the higher monthly payments on adjustable-rate mortgages that are resetting.
The three cities with the highest foreclosure rates were a wildly disparate bunch; the Motor City, where auto industry woes have taken a huge toll on homeowners, was followed by Ft. Lauderdale in the Sun Belt, and Denver, the first city of the Rockies.
Of the 100 largest U.S. metropolitan areas, the Bethesda/Frederick/Gaithersburg area of Maryland had the lowest foreclosure rate, just one for every 5,505 households, about 1/68th the rate reported for Detroit.
Of the cities with the 10 highest foreclosure rates, only Indianapolis showed some recovery during the quarter, with 2.5 percent fewer homes entering foreclosure than in the second quarter.
The other nine cities recorded increases that ranged from 2 percent (Memphis) to 97 percent (Miami). The Chicago area, ranked 19th, led in terms of sheer numbers: 16,155 homes entered into foreclosure there during the third quarter.
http://money.cnn.com/2006/11/10/real_estate/Top_ten_cities_for_foreclosures/index.htm?postversion=2006111306
Is Detroit in a recession already? What about the rest of the country?
Just curious…
An oldie but goodie on Detroit. An excellent series that profiles the long, slow decline of a single block.
http://detnews.com/specialreports/2001/elmhurst/
And what about the cesspool of sh-t at these fine fine fine institutions ?
Marcy Gordon
ASSOCIATED PRESS
2:30 p.m. January 18, 2007
WASHINGTON – Fannie Mae and Freddie Mac have made progress toward correcting financial weaknesses, but tight government supervision is needed as the mortgage giants emerge from accounting scandals, a federal regulator said Thursday.
James B. Lockhart, director of the Office of Federal Housing Enterprise Oversight, also disclosed that Fannie Mae, which just last month announced a restatement of $6.3 billion in profit for 2001 through mid-2004, had a loss in the third quarter of 2006. He did not specify the amount of the loss.
Advertisement“They unfortunately have very, very large problems,” Lockhart said in a meeting with reporters, referring to the government-sponsored companies that are the two biggest financiers in the $8 trillion home-mortgage market in the United States. “They have a long way to go; there are still significant worries.”
The problems “are massive and they’re ongoing,” he said.
Lockhart noted that the companies’ financial results continue to be volatile from quarter to quarter, saying that both lost money in the July-September period last year. Freddie Mac, the smaller of the two, recently forecast a loss of about $550 million for the quarter due mainly to declines in interest rates, compared with a profit of $880 million in the third quarter of 2005.
Fannie Mae has not reported or forecast its results beyond June 2004. The company, which is the second-largest U.S. financial institution after Citigroup Inc., is not expected to return to timely financial reporting until early next year.
Fannie Mae spokesman Brian Faith declined to comment on the third-quarter results.
With the Democrats now in control of Congress, prospects have improved for compromise legislation tightening the government’s reins on Fannie Mae and Freddie Mac. The accounting scandals that roiled both companies in recent years brought demands by Republicans in Congress and the Bush administration for cuts in their massive mortgage holdings – a move vehemently opposed by Fannie Mae and Freddie Mac.
Rep. Barney Frank, D-Mass., the new chairman of the House Financial Services Committee, is proposing legislation that wouldn’t mandate such reductions but would give the OFHEO director discretion to limit or reduce the holdings.
Fannie Mae and Freddie Mac were created by Congress to pump money into the mortgage market by buying home loans from banks and other lenders, in order to keep interest rates low and make home ownership affordable for low- and moderate-income people. They bundle the mortgages into securities for sale on Wall Street.
Critics of the companies have pointed to the recent accounting breakdowns to bolster their case that the mortgage portfolios – totaling more than $1 trillion – are improperly managed and pose a risk to the financial system.
“We have to prevent these companies from growing out of control again,” Lockhart said Thursday. He said legislation is definitely needed to bolster the supervisory authority and independence of OFHEO.
The agency in 2004 accused Washington-based Fannie Mae of serious accounting problems and earnings manipulation to meet Wall Street targets, and the Securities and Exchange Commission ordered the company to restate earnings back to 2001. Fannie Mae ousted top executives in 2004 and paid a record $400 million civil fine in a settlement with OFHEO and the SEC last May.
McLean, Va.-based Freddie Mac disclosed in June 2003 that it had misstated earnings – mostly underreported – by some $5 billion for 2000-2002 to smooth out volatility in profits and uphold its image on Wall Street as a steady performer.
–
Yes, what a fine “Free” Market we have — government sponsered agencies as publicly traded private companies.
Us American taxpayers are suckers for sure.
Jas
Paladin: if you get some volunteers, you should have them answer ads like these pretending to be potential investors. Run a sting operation of sorts:
http://dallas.craigslist.org/rfs/266026931.html
Amazing the blatantcy of all this. By the way TxChick, I plan to bring up your boyfriend at my next visit to the FBI. You know….Casey. Casey Serin. Mr. http://www.Iamfacingforeclosure.com . I know how fond your are of him, but you may have to put your relationship on hold while he does his hard time. LOL
Paladin
Why are these Craigslist links always flagged down by the time I go look at them? I’m too slow…
It is a big spam ad. Go to most any major metro city and put in ‘cash back’ in the search line in the rfs section and you’ll find the ad pop up.
Here are 2 from Colorado Springs. Though they are only for 10K each, the second one looks a little more concerning….
http://cosprings.craigslist.org/rfs/262456593.html
http://cosprings.craigslist.org/rfs/260406675.html
That remax realtor Cerene is so young, she foolishly believes putting her business card in the ad is a good thing. She thinks she is being savvy, not stupid and potentially fraudulent. She may not be an agent for long with this gimmick, and her striped blouse will be of a different color and fabric indistinguishable from the others in her cell block.
That’s a Florida phone number on her card!
Question? Last week this blog linked to a front page NY Times article on condo’s in the greater Washington DC area reporting:
At the end of 2006, 24,200 units were on the market in the Washington area, up from 13,000 at the start of 2005. Sales have slowed to 663 in the fourth quarter of 2006 from 3,520 in the first quarter of 2005, according to Delta Associates.
How is it that the Greater Capital Association of Realtors reports only 1,203 active condo listings at the end of Dec. 2006? Link ~~
http://www.gcaar.com/statistics/2006/dccc1206.pdf
That is just a huge difference even assuming a different regional sample size, seasonal & other removals from MRIS, up for rent etc.
Curious about readers thoughts?
“Greater Washington DC area” != GCAR’s stomping grounds. It’s much bigger. It includes Northern Virginia (which is completely condorrific — WAY more condos per capita than in DC proper) and huge chunks of Maryland.
Can’t compare apples and oranges.
Lasner has a good article and couple of great graphics in todays OC Register.
http://tinyurl.com/3xpw5f
His bottom line that sellers need to cut prices or suffer more pain.
Lansner, not Lasner. My bad. I suspect John reads this blog, so my apologies John.
Jon
http://www.larouchepub.com/other/2007/3403sterling_v_dollar.html
Watch out for City of London banking machinations against the US dollar. The British Pound’s sharp rise against the greenback is unwarranted and unsustainable.
No, the Russians are investing all their oil money in Euros and Pounds. I won’t be surprised to see a further divergence. See http://www.pimco.com/LeftNav/Global+Markets/Capital+Perspectives/2007/Capital+Perspectives-+January+2007.htm
My new blog on the Madison, WI housing bubble is now online:
http://madisonhousingbubble.blogspot.com/
Thanks
Paladin, I’m willing to help your effort to the extent I have time. I’m a crackerjack researcher. Feel free to let me know if I can do anything.
gymnastgal32 at yahoo dot com
I also have contacts of my own in law enforcement and state and national government. My husband went to law school with several Congressmen and federal judges.
I will probably need some help getting the data squared away on the TX comps. Thank you so much. We will be in touch soon. This is going to be huge undertaking. In fact, it already has been.
Craigslist posting from San Diego County.
http://sandiego.craigslist.org/rfs/266032616.html
Guy claims that “I spent 7 years here and a fortune on upgrades, Including a new main electrical 200 amp panel, and all new switches and outlets throughout the house, custom textured ceilings, and nice ceiling fans. New Stucco.
This home appraised for 490 June 2005, If you would like a copy of the appraisal Please E-Mail me, I will provide it for you if you give me your direct email. ”
Something about this guy’s sales pitch just stinks to me.
Sales dates from Zillow.
04/27/2005: $650,000
07/14/2003: $230,000
Yours today for the low price of only $399999. Uh huh.
http://cosprings.craigslist.org/rfs/260406675.html
$200000 4 Yrs No Mortgage Pmts 4 Yrs NO Prop Taxes Investors 500% Return $25K Cash Back
Yeah, this one doesn’t quite pass the smell test, either.
The listings from this group are also kinda stinky.
http://sandiego.craigslist.org/rfs/266086349.html
Advertising 100K cash to you with 100% financing and no closing costs if you buy one of their lovely resale listings in Murietta. Yes, the same city with ~5000 homes currently involved in a busted fraud ring.
Paladin,
Yours was the best birthday present I received today. When you get your website up, perhaps as a token for donations you can provide the “book” of fraud in PDF form. I’d buy a copy for the purposes of digital nostalgia. You should write up your experiences (perhaps simply copying what is already in this thread) as a cover for it.
B
Thanks, I did start saving my blog threads when I realized where it was all going. And I could PDF the book pretty easily. You would not believe the stupid idiots in that subdivision. Paying $785,000 for a new home, when the exact same model across the street sold for $585,000 a month earlier. And then to just leave it vacant. These people deserve jail just for their blatant stupidity!!
I doubt they even move in. Shill buyers taking the cash back and then disappearing.
Local new home show in Phoenix offers a free $20 gas card if you visit one of the communities. I saw it advertised during the showing of a Maricopa area development. For those not in Phoenix, $20 is about how much gas you’ll use driving out there.
Sure, I’ll take one, if you pay my gas for life…
http://www.hotonphoenix.com/index.cfm
Why do I need a free $20 gas card, when I can just siphon a realtor’s car at an open house?
Careful, the realtor is only there for as long as the buyers want to be. Hope you’re fast.
What buyers?
Paladin
Impressive work. Not surprised about the local FBI as they don’t understand white collar crime as they are now focused on terrorism etc.
Some other resources readers might consider:
The Federal Trade Commission’s Consumer Sentinel
http://www.consumer.gov/sentinel/
Unlike your experience at the FBI from a bottom up complaint. These start at the top and filter down to all relevant Consumer Protection Agencies. It also establishes a national pattern of complaint that the FTC’s Bureau of Consumer Protection, FBI, Attorneys General et all use to plan enforcement action moving forward.
Buyers with issue about an individual Realtor or agency should complain to the CBBB link: https://odr.bbb.org/odrweb/public/GetStarted.aspx
This also creates a pattern of behavior discussed in Consumer Protection circles and develops a public record about the company or agent. Additionally, complaints are publicly available for 3 years. Many consumers use this resource to make decisions about who to do business with.
Finally, a complaint that would have a more far reaching and immediate return would be to the National Advertising Review Council (NAD division) about the NAR’s national advertising campaign. Link: http://www.narcpartners.org/about/contact.asp
They are the body that self-regulates national advertising. The kicker is that only a few complaints should trigger a case as they are hyper-sensitive to consumer complaints as most of their volume is from competitive challenge. If opened, it would be incumbent upon NAR to prove or pull advertising claims found to be problematic. A press release is then issued to the national media with findings.
I would suggest that anyone interested - be specific on the advertisement and claim and when possible provide data that contradicts the claim. For example:
Know How to Buy
1. If you have a family it is always a good time to buy.
2. It is a great move up market.
3. It doesn’t make sense for us to spend the same amount of money renting something when we could own it. (Implied claim that the market always goes up.)
4. If we didn’t buy now we would have missed the opportunity on this home.
Know How to Sell
1. More buyers are in the market for a home like yours.
Code of Ethics
1. Realtors adhere to a strict code of ethics so you know you will be treated honestly. (Examples of Realtors who haven’t followed the code of ethics would be important)
Don’t try this at home
1. Realtors have the experience to price your home so it can sell up to 16% more than selling it yourself.
Home Builders Association of Metro Orlando Engages in Scare Tactics, Self Contradictions, and Lies To Sell Homes:
http://tinyurl.com/2t7cka
Bubble Meter Blog
Domestic migration
Dreams of Californication
Jan 18th 2007 | DENVER AND SALT LAKE CITY
From The Economist print edition
How a wave of migrants from the west has transformed the Rocky Mountains
“THEY are all right in the metropolitan areas. But if I sell a rural property to one, I would never disclose where he comes from.” So says Cody Burns, an estate agent, of the single biggest group of migrants to Utah. Mexican immigrants get most of the attention in Washington, DC. In the American West, though, they are less numerous and, in some areas, less unpopular than arrivals from California.
Complaining about Californians is an old tradition in the Rockies; but it is reaching a new intensity. Five million people who were born in California now live outside the state. They are America’s second-biggest domestic diaspora, after New Yorkers, and the most noticeable. California is by far the most populous state in the West—and still growing rapidly. It has become a demographic machine, drawing in foreigners while disgorging its own population across the deserts and mountains. In the process, it transforms those areas.
http://economist.com/world/na/displaystory.cfm?story_id=8570280
What impact would it potentially have if builders,bank foreclosure sales and reale estate sites advertised housing in monthly payments instead of the houses actual cost? Car dealers have been successfully deploying this method for some time now. It appears that people look only for the payment they think they can afford and what they want with little regard for the whole cost. Does anyone else think this may occur, and would this increase/decrease or not influence sales? Example buyers would look up monthly payments on sites to get all listings in that payment range.
Have California flippers spread their liberated equity all the way to Bucharest?
————————————————————————————————–
Associated Press
New Balkan EU Members See Housing Boom
By ALISON MUTLER 01.21.07, 2:23 PM ET
Buzesti Street used to be one of the shabbiest parts of Bucharest with crumbling, Communist-era structures and one of the city’s roughest markets.
Now, gleaming multistory buildings have turned the area into one of the capital’s new business centers - testimony to a property boom sweeping Romania and Bulgaria, the newest members of the European Union.
“It used to be hell here,” said Toader Grigoras, a 55-year-old priest who has lived in the neighborhood for more than a decade. “It’s good now that all the mountains of garbage have gone, but there’s a lot of noise.”
It’s the sound of unprecedented demand for real estate: In Romania and Bulgaria, some property prices have more than doubled in the last three years. And analysts say there’s no end in sight to a boom fueled by domestic demand, increased tourism and foreign investors.
http://www.forbes.com/feeds/ap/2007/01/21/ap3346830.html
Tax Lients on foreclosure.com.
While searching http://www.foreclosure.com I went to LA county and it showed over 80k tax liens, I looked at various areas I have have, so far, not seen as many tax liens as LA county.