A Call On The Mortgage Industry To Clean Up Its Act
I suggested a topic on the new Justice department arrests. “How about a topic on the new law enforcement actions this week?”
A reply, “You wonder how far it will go. It appears that millions of people lied on mortgage applications, and millions of brokers abetted this behavior. You wonder if it is a “go for the big fish” policy, or if they will start hauling in little fish to get them to flip.”
One asked. “The articles I’ve seen seem to involve people doing something a little more brazen than just overstating their income on a mortgage application. My supposition would be that if a borrower who overstated his/her income is actually performing effectively on his/her mortgage, there won’t be much scrutiny.”
“In that way, maybe the whole business is designed to keep those who lied on their loan applications from walking away when they’re underwater!”
Another posted, “I would like to see this topic - the Operation Malicious Mortgage program - discussed on here, too, and I’d especially like to see posters naming names. Six from the same company here in San Diego got busted yesterday. They were involved in several inflate-the-price to-get-a-larger-loan-amount deals in which the various parties split up the extra cash.”
One sees another implication, “And part of this topic could be to explore how this new level of fraud exposure reflects on what some legislators/politicoes want to do with bailouts. More and more light shed on the fraud to the general populace will make those bailout/relief actions more and more suspect.”
The Detroit News. “U.S. Attorney Stephen Murphy said at a news conference that since March, his office has charged or convicted 28 people with a variety of fraud and money laundering charges in 15 separate cases related to alleged mortgage fraud with losses exceeding $50 million.”
“In Washington, the U.S. Justice Department and the FBI on Thursday announced ‘a national takedown of mortgage fraud schemes,’ saying 404 defendants around the country were charged in 144 cases since March 1. ”
“Murphy denounced the criminals but called on the mortgage industry to ‘clean up its act’ and require more proof that borrowers can pay off loans. ‘If there is money and an ability to get it, criminals will take advantage of it,’ Murphy said.”
“Victims include not only lenders and title insurance companies but homeowners such as Patti and Marc Cammarata.”
“They say in 2002 and 2003, more than a dozen homes in their affluent northern Shelby Township neighborhood were purchased for well over the asking price by people who often didn’t keep up their property and were rarely seen. Prices, which ranged from $500,000 to $600,000, spiked to $700,000 and up.”
“Most are now in foreclosure; the unfinished landscaping and curtainless windows remain. ‘There was a lack of neighborhood or community because you never knew who was living here,’ Patti Cammarata said.”
The Macomb Daily. “One case, which has already come close to a resolution, shows the seriousness of mortgage fraud penalties. Shannon Ferguson, 36, of Canton Township, pleaded guilty June 13 to one count of wire fraud for two fraudulent mortgage loans handled by Select Mortgage that were secured by a residence in St. Clair Shores. The loans totaled $732,000. Under the terms of her plea agreement, she faces up to 46 months in prison, a $1 million fine, and $732,000 in restitution.”
“Co-defendants Tariq Hamad and Kalil Khalil pleaded guilty to broader mortgage fraud schemes encompassing loans totaling $21 million. Hamad was sentenced in September 2007 to 110 months in prison and ordered to pay $11.5 million in restitution. Khalil was sentenced in February 2008 to 60 months and ordered to pay $11.1 million in restitution.’
The Dallas News. “Federal agents arrested eight North Texas men Wednesday in connection with an alleged mortgage fraud operation involving at least 11 homes in the Dallas-Fort Worth area. In a 51-count indictment, the eight men and three other defendants stand accused of profiting by obtaining mortgages based on inflated sales prices.”
“Prosecutors alleged that the defendants recruited straw buyers to purchase the homes, then let the loans go into foreclosure after making just a few payments.”
“In one case from 2003, according to the indictment, Eric Farrington of Irving, a real estate investor, motivational speaker and convicted felon, and two associates recruited a straw buyer to purchase a home near the corner of Preston Road and Royal Lane for $630,000.”
“It’s unclear what the home’s market value was at the time, but the Dallas Central Appraisal District had it on the books at less than $400,000.”
The Palm Beach Post. “A local title agent and a chiropractor are among hundreds of alleged mortgage scammers captured nationwide in a federal crackdown on loan fraud announced Thursday. Evelyn Rivera, owner of Asset Title LLC of Wellington, and Wellington resident William Louisma, used bogus loan applications in an attempt to buy 55 units in a Fort Lauderdale condo.”
“Rivera, Louisma and an unnamed mortgage broker and appraiser planned to borrow $11.9 million to buy the units at $216,000 apiece, then use phony appraisals and trumped-up loan applications to resell the units for $400,000 each, or a total of $22 million, according to federal court documents.”
“Those named in the cases include housing developers, mortgage lenders and brokers, lawyers, real estate agents and appraisers, said Sharon Ormsby, section chief in charge of financial crimes for the FBI.”
“‘In many instances the fraud cannot occur without the title agent going along and collecting a fee,’ said Alexander Acosta, U.S. attorney for the Southern District of Florida.”
The Salt Lake Tribune. “State Rep. Paul Ray, who has worked in recent years to pass legislation aimed at reducing mortgage fraud in Utah, applauded the agency’s decision to announce the hundreds of cases at once. ‘The only way to send a message to the public that there’s a chance you’re going to get caught is to throw 400 indictments out there at one time,’ Ray said.”
“Authorities say Utahn Jerry C. Huff of Hurricane, lied to convince a bank to provide him with a $250,000 second mortgage on his home in Moab, a loan on which he has failed to make payments.”
“According to the indictment, Huff lied about the condition and value of his home, overstated his income and submitted false documents, such as a fake appraisal, so that his loan would be approved. The indictment also says Huff submitted copies of personal tax forms as part of his loan application when in reality he hadn’t filed tax returns for those years.”
“Huff faces one count of wire fraud, which carries a maximum penalty of up to 20 years in federal prison; two counts of money laundering, with a potential maximum penalty of 10 years in prison for each count; and two counts of failure to file a tax return, which carries a maximum penalty of one year in prison for each count.”
“The most common type of mortgage fraud was inflating income or assets to qualify for a loan, followed by forging documents, inflating appraisals and misrepresenting a buyer’s intent to occupy a property as a primary residence. Loans based on primary residences are looked at more favorably by lenders.”
The Sacramento Bee. “The region’s latest arrest came Monday, when authorities charged Melissa Villegas, 29, of Natomas with lying to federal agents. Authorities alleged that Villegas lied during an investigation into transactions that included paying money to a buyer suspected of defrauding a mortgage company.”
“‘She is part of a larger investigation,’ said First Assistant U.S. Attorney Larry Brown of the Eastern District of California office in Sacramento. ‘We have numerous open pending investigations. In weeks and months to come that number will continue to rise.’”
“Other Northern Californians in Solano County, Stockton, San Ramon and Dublin have been charged, indicted and sentenced for mortgage fraud. Brown said the U.S. attorney’s office for the Eastern District of California, which oversees investigations in 34 inland counties from Bakersfield to the Oregon border, has seen a ’significant uptick in referrals of mortgage fraud over the past 12 to 18 months.’”
The Union Tribune. “In San Diego, prosecutors have charged six people associated with downtown mortgage broker and real estate firm Creative Financial Solutions. The FBI analyzed 21 loans that CFS made from November 2005 to August 2006 and found that 18 of them have resulted in foreclosure or are in the process of foreclosur”
“CFS allegedly used methods common in fraud schemes during the housing boom, when lax lending standards and ever-escalating prices made the climate particularly friendly for potential schemes.”
“In one case, a condo in Park Loft downtown was listed for sale in May 2006 for $845,000 to $925,000. Later, the price was raised, and it sold for $1.1 million. The buyer got a $1.1 million loan. CFS handled the loan and represented the buyer. The seller paid $174,000 to two CFS agents.”
“Loan documents submitted by CFS said the buyer made $301,000 a year working for a company that prosecutors said ‘does not exist as a functioning entity.’ The buyer says her identity was stolen.”
“The lender foreclosed on the property in March 2007. It was purchased from the bank in February. The price: $591,000.”
The Honolulu Advertiser. “Lax lending standards and the high cost of housing caused an increase in mortgage fraud in Hawai’i during the past few years, outpacing the majority of Mainland markets dealing with similar schemes, according to the FBI.”
“‘Greedy people looking to make an easy buck found Hawai’i’s hot housing market to be a lucrative place to operate their scams,’ said Janet L. Kamerman, special agent in charge of the FBI’s Honolulu division. ‘The mortgage fraud schemes we have thus far identified in Hawai’i are as diverse as the individuals and groups running them.’”
“The ‘fraudulent activities’ of more than a dozen local mortgage brokerages are under investigation by the FBI and officials estimate losses from the schemes stretch into the millions of dollars.”
“‘This is one of those silent crimes that is so devastating to our community and so damaging to those families who are thrown out in the street,’ said Ed Kubo, U.S. attorney for the district of Hawai’i. ‘These are tough times. In this economy when we are seeing people losing their homes and losing their jobs, these types of crooks need to be called on the carpet and accounted for.’”
“To people who have committed fraud or are contemplating doing so, FBI Director Robert S. Mueller III said, ‘We will find you, you will be investigated and you will be prosecuted.’”
“‘The FBI will continue to direct investigative and analytic resources towards mortgage fraud and corporate securities fraud that threaten our nation’s economy,’ Mueller said in a news release.”
“Banks reported nearly 53,000 cases of suspected mortgage fraud last year, up from more than 37,000 a year earlier and about 10 times the level of reports in 2001 and 2002, according to the Treasury Department’s Financial Crimes Enforcement Network.”
From Bloomberg. “The risks of putting sensitive information in e-mails were disregarded by two ex-Bear Stearns Cos. hedge fund managers indicted for fraud who allegedly exchanged incriminating messages, former prosecutors said.”
“Ralph Cioffi, 52, and Matthew Tannin, 46, were charged June 19 with misleading investors by saying two funds were thriving while knowing subprime-mortgage investments threatened their collapse. Investors in the funds lost $1.6 billion.”
“The men were each charged in federal court in Brooklyn, New York, with conspiracy, securities fraud and wire fraud. Cioffi was also charged with insider trading. They face as long as 20 years in prison if convicted on the most serious counts. Both men denied the charges and vowed to win at trial.”
“The indictments brought to light e-mail conversations that allegedly took place between the two men and others about the health of the funds, including a March 15, 2007, message from Cioffi to a team economist with the subject line ‘Fear.’”
“‘As we discussed it may not be a meltdown for the general economy but in our world it will be,’ the indictment quotes Cioffi as writing. ‘Wall Street will be hammered with lawsuits. Dealers will lose millions and the CDO business will not be the same for years.’”
“Cioffi acknowledged in a private e-mail that certain types of CDOs, which included subprime debt rated AAA or AA, were ‘not really AAA’ because they were subject to heightened risk of defaults, according to the indictment.”
“In March 2007, Cioffi urged a Bear Stearns broker to put more money in the funds, telling him it was an ‘awesome opportunity,’ according to the indictment. The broker agreed, said Tannin, who later that month bragged in an e-mail that he had successfully lured more money into the funds, prosecutors alleged.”
“‘Believe it or not — I’ve been able to convince people to add more money,’ Tannin said in an e-mail, according to the indictment.”
Yes, just think of the fun he will provide to bored inmates. He probably doesn’t even have any tattoos yet. He’ll be like a soft, pale, screaming, Etch-a-Sketch.
And that could be the LEAST awful part. Assuming he goes to real prison and not to a fancy country-club type prison where they serve lemon wedges with the tea.
Actually, I read somewhere that thing is a bit of a myth. There are minimum-security prisons, of course, but the idea that they are cushy is kinda wrong.
It also pays to remember that as far as these people are concerned, fetching their own coffee constitutes a “hardship”.
It’s a harsh fall from grace.
‘There are minimum-security prisons, of course, but the idea that they are cushy is kinda wrong.’
Really?! No lemon wedges?
Shoots. I guess I’d better start obeying the law better.
Really?! No lemon wedges?
———————————————
they say he will be getting a butt wedgie instead.
Really?! No lemon wedges?
Immediately after release from prison, Martha Stewart was asked what she missed most. Her reply was something to the effect of: “Fresh lemons. Oh, and my family.”
(Jon Stewart was merciless.)
There you go, Oly!
No fresh lemons for you in Club Fed.
RE: the idea that they are cushy is kinda wrong.
One night in the Denton County Texas jail for a crummy PI bust after the Samsung 500 at the Texas Motor Speedway was enough to scare me straight.
I was put me in the holding tank with a bunch of other light-weights.
Next morning before I was given my walking papers they paraded the real “bad boys” by the door on their way to morning chow.
YIKES!
Incarceration for more than a second sucks.
Hmmmm….
Where I come from, “P.I.” is short-hand for “Public Indecency”.
“P.F.O.” is “Pissed and Fell Over”, and of course “D.I.P.P.” is “Druink in a Public Place”
Druink = Drunk.
Sheesh! I need a drink!
Here’s a post I did on March 20, 2005:
‘ Fraud Indistinguishable From The Bubble’
‘Mortgage fraud is increasing in a market where true values are becoming harder to discern. Could we be getting to a point where the con resembles the bubble itself? That would appear to be the case when the acts are no longer hidden.’
“W-FIVE found plenty of people involved in questionable real estate deals. One man who has raised some eyebrows is Gohar Pervez, a convicted cocaine and methamphetamine dealer, now into real estate. On a number of his deals, ownership of the houses passes through the same associates and the same numbered companies time and time again. At any time, if Pervez chose to mortgage the houses, he’d be making serious money.”
“The Bank of Montreal..claims it was defrauded of more than $1 million. Pervez maintains he’s done nothing wrong. Det. Mike Shorter..has been working exclusively on mortgage fraud. When asked how many charges he has laid, Shorter says ‘none.’”
‘The US has a problem as well. Chris Swecker, of the FBI said “We went from 4,000 complaints a year to 17,000. And we think that’s just the tip of the iceberg.”
The basic problem with this whole scenerio is that when reports started to escalate, vigorous measures should have been taken to get after what was obvious to all of us at the time.
I lay this as the feet of the Bush Administration for its laisse-faire approach to Everything. Borders over-run with illegals? No problem. Got Gangs? No problem, we just need some sensitivity training. Mortgage fraud? See if Greenie will lower rates some more to keep prices high.
It’s all been one big long discouraging mess. Lawlessness. So now, after the problems have become gargantuan, the Executive Branch decides that maybe we need to do something a little more aggressive.
Too late.
It reminds me of our moronic Mayor, Sandy Freedman, back in the early 90’s here in Tampa.
We had a couple of car crashes involving policing chasing fleeing suspects. She passed a new law that said the police could not exceed the speed limit when chasing criminals. Instead, 4 to 5 cruisers, using their radios would work to contain the fleeing vermin and try to cut them off.
End result? ANYONE could have figured that out. LOTS and LOTS of stolen cars by welfare trash teen -aged scumbags stealing car, after car, after car.
Everyday, dozens of cars stolen and the police run them down until the “bailout”>usually resulting in them ramming the car into another car or house.
Of course, they were all under 18, so they got a slap on the wrist.
Car Insurance in Hillsborough County went ballistic.
Easily, we knew the end result, but we all got to watch this insane policy unfold because the majority of perpetrators were black. Chasing them down was “racist”. Several had been injured when the cars they stole were hit while running red lights and bolting through intersections. The mayor was “sensitive”.
Bottom Line: NO LAW ENFORCEMENT leads to higher crime rates. Get a clue Executive Branch. You are WAY, WAY behind the curve here. Forget Iraq. Enforce the laws here. PROSECUTE. Thank you.
To people who have committed fraud or are contemplating doing so, FBI Director Robert S. Mueller III said, ‘We will find you, you will be investigated and you will be prosecuted
Bobby…I think you better hire MORE agents
I don’t know whether to laugh at Ed for his foolishness, or cry for him because of the pitifulness of his situation. For someone who handed out millions, and should be financially secure in the sunset years, this is I don’t know what to think. Definitely humiliating for Ed.
http://cosmos.bcst.yahoo.com/up/player/popup/?rn=4226712&cl=8416873&src=news
Stick it to the crooks in Utarr. They all deserve to go down with their boat on the Great Salt Lake.
But you float better in the Great Salt Lake!
Just put them out there, no need to sink ‘em. The stench is horrible.
There’s a weather phenomenon in Salt Lake, regularly referred to by the forecasters as “lake stink”. It happens in the first 15 minutes or so when a cold front moves through, the winds shift and air from the Salt Lake blows over the valley.
“‘Wall Street will be hammered with lawsuits. Dealers will lose millions and the CDO business will not be the same for years.’”
It’s amazing how accurate some of us were way back when.
Dealers will lose millions and the CDO business will not be the same for years.’”
That could have been a Thornburg quote.? Its that understated dry sense of humor he seems to have. However, coming from two CDO dealers its seen in a far less humorless light.
Interesting times ahead.
Got Popcorn?
Neil
Did anyone see Larry Kudblow & Co. (thurs or friday) giving his speech about his good friend Cioffi (”who is a family man by the way”) and how outrageous these allegations are…..I thought he was going to cry (like the little bee itch that he is)
“In March 2007, Cioffi urged a Bear Stearns broker to put more money in the funds, telling him it was an ‘awesome opportunity,’ according to the indictment. The broker agreed, said Tannin, who later that month bragged in an e-mail that he had successfully lured more money into the funds, prosecutors alleged.”
“‘Believe it or not — I’ve been able to convince people to add more money,’ Tannin said in an e-mail, according to the indictment.”
Cocaine Larry Kudlow knows no bounds in excusing Wall Street fraud and the Whitehouse CrimeSyndicate. Out of all the reaganomics criminals, I think Kudlow should be most afraid of a noose and lightpole.
U-m-m-m…you mean Clinton criminals as in March Rich. Oh, I forgot, he was pardoned on the last night in the Whitehouse…just before the silver disappeared.
Actually I meant the GW pardoned 4 time felon national security risk named Libby.
I did not give that woman any silver.
“I’m going to create an ownership society.”
Hows that going for ya?
good one!
” Hows that going for ya? ”
Pretty good for me , but not as good as Sen. Dodd or his buddy Angelo.
“In one case, a condo in Park Loft downtown was listed for sale in May 2006 for $845,000 to $925,000. Later, the price was raised, and it sold for $1.1 million. The buyer got a $1.1 million loan. CFS handled the loan and represented the buyer. The seller paid $174,000 to two CFS agents.”
The worst thing about this is that everyone in that condo complex thought his or her condo was “worth” 1.1 miilion. This number was used as a comp for the next happless sucker that bought.
The real worth is determined when the unit sells, it if ever does.
Not to mention the upward spiral of condo HOA costs, as each marginal player enters foreclosure putting greater pressure on the folks left behind.
Even in Manhattan, I wouldn’t buy a condo. If I were in the market, I’d buy a brownstone, or half of one.
“The worst thing about this is that everyone in that condo complex thought his or her condo was “worth” 1.1 miilion. This number was used as a comp for the next happless sucker that bought.”
Excellent point Curt.
And the image of the countless morons that refied and heloced into full recourse debt and blew it on buying worthless franchises (frozen yogurt shop, cookie store), keeping unprofitable self-employment businesses afloat, expensive vacations and toys currently plummeting in value.
They can walk away, but collection agencies on steriods (think TCW Trust Co of the West) will be buying the almost worthless paper (recourse) for pennies on the dollar and hounding these FBs into bankruptcy court. 5 years of debt servitude as sentence for these greedy fools.
Patience fellow HBBers, I audit 401k plans, and I see a tremendous increase in loans in 2007 (thru 12/31/07) and hardship withdrawals, people tapping the max on loans (50% of acct balance). They’re hanging on by selling assets, 401k loans and credit cards, helocs (if not reduced or canceled) but more and more are letting go and dropping to the ground from the tower. In 5 years (2013) we should be back to 2001 prices (housing prices relative to commodity prices - whatever the commodity prices may be in 2013). That would celebrate the 6th anniversary of the beginning of the end - the abandonment of providing liquidity to the 2 Bear Stearns SIVs ~ June 19, 2007 and allow a full 5-6 years to squeeze the s**t out of the lending sewer. 7 years to complete new plants to expand Canadian tar sands output - I’m stocking up on oil and precious metals to trade for more land in 2013+. Eventually the government will have no choice but to create tremendous amounts of additional worthless federal reserve notes to further dilute the money supply.
Got diversified assets?
What’s worse is the PROPERTY APPRAISER used these bogus numbers to assess your taxes.
This has created a huge problem here in Florida.
Without Save-Our-Homes, a lot of us would be taxed to death by Flipper and Fraud appraisals.
I am hopeful that many of these crooks will be living in a cell, rather than some beachfront condo sipping champagne.
“What’s worse is the PROPERTY APPRAISER used these bogus numbers to assess your taxes.”
Were there any appraisers anywhere that questioned the inflated prices when setting appraised values? In contrast, the San Diego County Assessor is now scrutinizing values of properties that sell for “too little”.
Or as a comp for a HELOC. Prices for the entire complex were then based on fraud.
A key question is: What areas and prices aren’t based on fraud?
“A key question is: What areas and prices aren’t based on fraud?”
You’ve asked the question I’ve wondered about for awhile now. I think the answer is virtually none. At this point I’m more interested as to how much or what degree prices were inflated due to fraud. My guess is there’s quite a range of amounts and quite a difference in amounts from one location to the next.
“The worst thing about this is that everyone in that condo complex thought his or her condo was “worth” 1.1 million. This number was used as a comp for the next happless sucker that bought.”
We’re beginning to get some numbers on the direct loss dues to fraud and those seem greatly understated as is the amount of fraud. How much larger might be the indirect losses as those that unwittingly overpaid due to inflated comps begin to default, starting another cascade of losses.
RE: This number was used as a comp for the next happless sucker that bought.
The tentacles of the real estate fraud cesspool reaches everyone in this country who owns property simply via the dramatic escalation of property taxes attendant to the run-up in purchase values based on corrupted and misleading marketing conditions.
The Syndicate has nothing on Wall Street as far as the looting of the masses go.
San Diego residents, especially those downtown, are finally coming to terms with the fact that bubble prices were the result of fraud and speculation, and there were no REAL buyers out there. . .our building is proof of that - 70% rentals - most owned by speculators who are slowly jumping ship and giving the keys back to the bank. When I moved in (as a renter) a one bedroom was selling for 479K, now a two bedroom is selling at that price, and one bedrooms are in the mid 200K range and going down.
Went with my family to the Padre’s game last night. I was awestruck with the number of ongoing high rise luxury condo projects still under construction, straight into the headwinds of the bust. Many had signs out front indicating completion dates in 2010 or later. Just amazing!!!
Come to Manhattan, PB.
Will make SD look like a walk in the park. There are condos going up everywhere, literally everywhere.
I could take a cabride from one end of the city to the other along just about any route, and there would absolutely NO point in time I would not see a new condo going up.
You don’t understand the oversupply until you see it out here.
Must have been too much of a distraction for those danged Tigers too.
The real question is why were all these crimes/frauds allowed to go on for so long? I remember having a discussion back in ‘03/’04 with friends/coworkers/anyone who would listen that there had to be a piece missing. Incomes weren’t going up yet everyone could afford the outrageous prices. While a consultant at Freddie Mac I asked my supervisor where all the money was coming from to buy up all these loans? He shrugged and vaguely referred to the huge money tree the governement picks from.
The backlash from such reckless indifference is just beginning. How about charging the authorities that were supposed to enforcing the law?
I have ranted on this topic countless times.
In answer to your question, I think the answer is fairly simple. We had an executive in the White House that was focused on Peace and Prosperity in The Middle East, in Iraq, in Afghanistan, and brokering a treaty between Israel and the Palistinians.
He simply forgot that he was supposed to be President of the UNITED STATES.
Everything here would take care of itself with the able people, like Hank Paulson, Alan Greenspan, Ben Bernanke, Michael Brown, etc., etc. that he appointed to run the show back home.
Now’s he’s flying around Europe to show some kind of Statemanship before leaving office.
The man has been a dismal failure.
Unfortunately, looking at the slate, the next in line will be WORSE, no matter which side wins the Office.
“The real question is why were all these crimes/frauds allowed to go on for so long?”
Not sure, not an expert, not even financially savvy; but a “soggy secret” from my golden retriever [he's pretty smart] revealed the possibility that more debt is required to service that debt which already exists–otherwise, implosion. Answer–necessity.
“This is not even the tip of the iceberg that sank the Titanic,” said Warren real estate agent Ralph Roberts, who has written books about mortgage fraud and gives lectures around the country on how to detect and avoid it. “I believe that mortgage fraud has trashed the economy of the whole country.”
I’ve thought him a bit of an oddball, but at our REIA group and others around here a few years ago he was telling people to knock off the straw buying, that the feds were gonna come and get you.
As usual, the politicians are jumping on the “Justice For The American People,” bandwagon. End result will be the same as happens in all these situations (why anyone even bothers listening to ANY of these politicians beats me). This is what will happen:
A few heads will roll. A couple of the top offenders will get jail time. Quality of jail time depending on who they know - what they know. A whole bunch of lower end people will get charged. Great photo-op publicity for the politicians like Senator Dodd who now portrays himself as the White Knight fighting for Mortgage Fraud Justice, when he himself was elbow deep in the mortgage fraud scams getting sweetheart deals of off Angelo Mozillo of CountryWide.
Then once the mortgage fraud period is over, it’s onto the next scam - the next bubble - the next crash - then out come the scumbag politicians again, “Seeking Justice For The American People.” Nothings going to change.
Here’s the bottom line on all of this: This blog (Ben Jones blog) has been hammering away at the fraud and deception taking place for AT LEAST 3 or 4 years. Other blogs were doing the same. Where were these, “Justice For All”, politicians when it was obvious to anyone but a total idiot that, “If it looks too good to be true - It probably is too good to be true.” (And buying $500,000 houses with an income of $20,000 and you didn’t need to fog a mirror WAS too good to be true.)
Were the politicians on a trip to Mars? Were they in a coma? No, they were in on the scams via special interests, lobbyists, etc. In fact, the ones who should be charged with deception and fraud (and if anyone thinks Barack Obama is going to be any different if he becomes President they need to wake up) are the politicians of the USA. Those that inhabit that cesspool of corruption called Washington.
BTW, guess who’s going to end up paying for this mess one way or another - YOU. The banks and Wall Street will get bailed out via various means. Dollar devaluation, hidden taxes, lower standard of living, etc, but when this scam is over the same pile of dog sh*t (politicians) will still be there.
Sorry for the rant but at my age I’ve seen all this before, heard all the b.s before, seen all the photo-op crap before, heard all the spin before, seen the masses get sucked in by slick talking politicians (who NEVER live up to their rhetoric once elected).
I agree with everything your saying Mike , but this crime way of corruption and fraud just went a little bigger than the normal run-of the mill corruption that is peppered into life . The losses usually aren’t this huge and the potential losses in the future are mind-blowing . This mess is big . Never before has a need for proper solutions to a mess like this been necessary . The politicians do not have the luxury of doing the same old BS this time IMHO .
RE: Great photo-op publicity for the politicians like Senator Dodd who now portrays himself as the White Knight fighting for Mortgage Fraud Justice, when he himself was elbow deep in the mortgage fraud scams getting sweetheart deals of off Angelo Mozillo of CountryWide.
Nah, this POS will be exposed for the racketeer he is.
If you read the history, pundits often note how quickly the French Revolution went from an idea of moderates to the berserko frenzies of an enraged mob who freely and enthusastically employed the ramp-up of a sharp and heavy guillotine blade to accommodate the denoucements of those who were enemies of the cause of liberty.
The talk radio dudes will be gettin’ the message out.
I definitely agree with your overall view of the political system. I would point out though that opposition to subprime, liar loans, Alt-A would have been political suicide until recently. Remember that these products were largely promoted as a path to home ownership for poorer (often minority) buyers. Any attempt to reign in lax lending would have been attacked as elitist, racist, etc. Not because it was truly elitist or racist, but because that’s just what our “gotcha” political mentality amounts to. To do the right thing would mean that a politician actually cared about our country more than his/her job. Not likely.
Mike
My sentiments exactly. Thanks for saying what I think but can’t write.
Bravo!
If “investors” did a modicum of due diligence on the mortgage vehicles they were buying, if they paid a modicum amount of attention to the classic signs of a bubble being blown in housing, if they paid a modicum amount of attention to the way financing was go ape…..
Would there be a need for “reform”? It amazes me that huge investors swallowed these “investments” continuously without (apparently) any scrutiny of the ongoing market conditions.
Its astounding when you consider the fact that these investors have had better research access, broader, deeper and faster than at any other time in history. Yet they made possibly the worst relative investment decision in history. Amazing.
“It amazes me that huge investors swallowed these ‘investments’ continously without (apparantly) any scrutiny of the ongoing market conditions.”
After the 1929 stock market crash the loud complaint was there was no full disclosure from companies that allowed investors to fully inquire into a company’s finances. So the SEC was sprung into being to fix the full disclosure problem.
The result? The result is: INVESTORS DON’T CARE; All investors (and I use that term with great latitude) care about is whether the stock is going up or not.
(Which allows the few of who do care to cash in on some great opportunities when they are presented.)
You have to remember that although the Press refers to these people as “investors”, most were NOT.
The were Speculators. There is No return on investment in real estate at bubble prices. The goal was a higher selling price.
But the Big Thing is the money was “free”.
There was no ‘investment’. It was the lenders money, given freely for any reason to anybody at any time for a roll of the dice on the property ladder game.
If the lending had been restrained, this would have Stopped, immediately.
But it did not. It was the Greenspan (Maestro)’s legacy.
A Booming Economy!!! Courtesy of Cheap Finance!
“Eric Farrington of Irving, a real estate investor, motivational speaker and convicted felon”
LOL. They just go together, don’t they?
The sad part is the convicted felon label makes me cringe the least.
Hahaha!
Jeeze, there’ve been some great comments here, and it’s not even noon yet.
No kidding.
Yep that part, convicted felon, didn’t irk me as much as the motivational speaker part did.
The sad part is the convicted felon label makes me cringe the least.
ROTFLMAO
It is the easiest to forgive.
Thankfully the coffee that went into my nose was only luke warm.
Got Popcorn?
Neil
Oh my word…. Felon/Real estate/publicSpeaker…. Its fawwkin sweet harmony!!!! Classic!!!
How fake purchases and inflated appraisals raised the real estate value to the unheard of heights they went to ,is the real elephant under the carpet . It wasn’t simply a speculation bubble ,but rather a market were comps were based on fraudulent prior sales and Ponzi- schemes. Once all the fraudulent cash back purchases get in the appraisal comp based ,than the values are distorted ,based on crime.
The old housing Wizard has been bitching for a long time about the crime wave aspect of this housing boom . When the lenders and regulators saw that prices were going up as fast as they were ,with seemingly no grounds for it ,that should of been the big red flag.
Since real estate values are suppose to be based on a arms length willing and able buyer ,who qualifies for the loan ,where no perks or cash back is involved and no sales appraisal inflated ,even a small amount of fraudulent comps can change the comps for the entire neighborhood.
Yep, people have crashing values ,vacant houses and brown lawns in their neighborhoods because of loan fraud ,not because of poor borrowers who have been deprived of the American Dream . The lenders in the past have always been the watch dogs for the industry to prevent
this sort of fraud ,but the system corrupted into “anything goes .”
I think that it is inept on the part of the politicians to ignore this very potent grounds for a great deal of the reason behind the housing crash .
Developers with their special lenders selling out tracks to unqualified speculators ,based not on rental values ,but based on the” own to flip mentality “was also a breach of lenders and regulators to stop that practice ,which is also a form of fraud .
Where the honest American people were screwed because of this loan fraud crime wave is so insidious and complex that it is mind-blowing ,just mind-blowing. Crime is always destructive , but the results of a widespread crime wave of loan fraud of major money amounts is about the most destruction thing I have ever seen in a real estate cycle. Even borrower lying on their loan applications to get into real estate creates a false demand and drives up prices .
I hope that the fraud aspect of this real estate boom is explored more and more and the proper determinations are made . When you look at lenders that have a 37% default rate currently ,you have to say this goes beyond homeowners being stressed because of adjustable loans IMHO.
“The lenders in the past have always been the watch dogs for the industry to prevent this sort of fraud, but the system corrupted into ‘anything goes’.”
Yep. Disconnect risk from reward and this is what you get.
“I hope that the fraud aspect of this real estate boom is explored more and more and the proper determinations are made.”
Sub-prime has gotten lots of coverage, but I think the fraud aspect is a much bigger story. How hard would it be to sell any bailout proposals if the impact of the fraud was widely understood? There’s a lot of misplaced sympathy and anger based on lack of understanding of the fraud aspect.
Yes ,and bail-outs for some lenders/borrowers are really just a Obstruction of Justice . I mean if your going to bail out some financial systems because of loss because of fraud ,than call it what it and purge the system and bring the responsible parties to Justice .Than and only than can you also come up with any kind of new regulations that would be necessary for the system to prevent this from happening again .
RE: How fake purchases and inflated appraisals raised the real estate value to the unheard of heights they went to ,is the real elephant under the carpet . It wasn’t simply a speculation bubble ,but rather a market were comps were based on fraudulent prior sales and Ponzi- schemes. Once all the fraudulent cash back purchases get in the appraisal comp based ,than the values are distorted ,based on crime.
The old housing Wizard has been bitching for a long time about the crime wave aspect of this housing boom . When the lenders and regulators saw that prices were going up as fast as they were ,with seemingly no grounds for it ,that should of been the big red flag.
You are absolutely 100% correct, WIZ.
The “BIG LIE” upon which all else was based from the underwriting, to the sale of the bogus cornucopia of alphabet soup of mortgage backed financial instruments to unwitting investors all over the world…is simply the QUEERED (the use of bogus comps) and COMPROMISED (lender black-mail-give us the value we want or no more work) estimate of FAIR MARKET VALUE contained at the bottom of standard FNMA 1004 appraisal form.
With a straight and square appraisal function-aided by a simple law that would make the coercion and influencing of a reported residential value a federal felony 90% of the bad deals would have never gone.
But in all the hue and cry do notice the continued failure of lawmakers to address this issue.
Remember-FHA/HUD appraiser’s
are still chosen by the lender-which is why Dodd’s $300 billion
bail-out changes nothing.
Wiz
Great insight.
San Diego Home > News
Commentary -
Bank of America PAC money behind Dodd’s Countrywide loan
Jun 19, 2008 10:37 AM (1 day ago) by Timothy P. Carney, The Examiner
WASHINGTON (Map, News) - “We call it the ‘Bank of America bill on steroids.’” A House staffer told me that, demanding anonymity, but speaking on behalf of aides to GOP members of the House Financial Services Committee.
He was talking about the bill whose Senate version has been brought to the floor this week by Sen. Chris Dodd, D-CN, and Sen. Richard Shelby, R-AL. Dodd-Shelby would let mortgage lenders off the hook for bad loans, shifting the burden ultimately to taxpayers. Dodd has received approximately $70,000 in campaign contributions from Bank of America in the last year-and-a-half.
i want to take the time to thank you Professor Bear for all the articles you post on a daily basis .
Ditto.
De nada.
If Mr. Obama is for “change” he should jump on Sen. Dodd Sen. Shelby and this bill with both feet. If he did that he would get my vote.
Me too — I am absolutely certain of it!
I just wrote my congressman about Dodd, Shelby and this bill. Won`t do any good but what the heck.
REVIEW & OUTLOOK
The FHA Time Bomb
June 21, 2008; Page A8
Well, this certainly is embarrassing. The Federal Housing Administration – the very agency the Bush Administration and Congress trumpet as the solution to the mortgage crisis – has announced that it suffered a $4.6 billion loss last year. This is one of the worst financial performances ever for the government’s multibillion-dollar mortgage insurer.
We’d hope this news might cause Congress to reconsider its plans to turn over some $300 billion of troubled loans to an agency already in financial distress. No such luck. A bill passed by the House and now being debated on the Senate floor would expand the FHA portfolio to about 1.5 million mostly high-risk subprime mortgages. So at the very time private lenders and investors are fleeing subprime markets, Congress wants taxpayers to dive in.
35 percent of $300 bn is $105 bn.
“The most reckless provision now on the Senate floor would allow the FHA to take over risky subprime loans from private banks. When FHA Commissioner Brian Montgomery announced the agency’s losses last week, he warned that Congress’s subprime loan bailout could plunge FHA deeper into the red. Senate Banking staffers tell us that lenders have all but admitted that, if the bailout becomes law, they will dump their worst loans onto the FHA.
Among the likely dumpers: Countrywide Financial, which gave Senate Banking Chairman Chris Dodd a bargain mortgage. The Congressional Budget Office predicted this month that 35% of these loans could go sour.
Yet Congress is putting the political imperative of “doing something” about housing above the risks of tens of billions of dollars in taxpayer losses.”
Should be tattooed on every baby born, “You can’t cheat an honest man” by, I believe, W.C. Fields.
A constant reminder throughout life, you may be ignorant or dumb and it will cost you, but greed will kill you (or at least put you in jail).
lol
In fact, you can only cheat honest men.
They are foolish because they think their sense of ethics and morals extends to others who have no scruples whatsoever.
This is the stupidest quote I’ve ever seen.
I disagree.
I true honest individual doesn’t pursue returns that can only be achieved by cheating/screwing someone else.
Its one of my favorite quotes.
I plan to rub it in the face of quite a few real estate
mogulspaupers.Got Popcorn?
Neil
This is the stupidest quote I’ve ever seen.
It definitely falls into the Top Ten, if not number one.
It’s the quote of a crook, making his victim a “dishonest” man, so as to justify the thievery. I’ve heard it used when bad people sell bad stuff under spurious terms and conditions.
That too.
But most people miss the rather insidious comedy of the late 30’s in response to the Hays code. They have conventional “happy” endings because they had to. There was no choice.
How anybody can take that title literally is beyond me?
The main character is called “Larson E. Whipsnade”.
Hello?!? Anybody home in the upstairs attic?
The Hays code said nothing about happy endings. That was (and to a large extent still is) Hollywood formula, fulfilling audience expectations. The Hays code dealt mainly with sex and, to a lesser extent, the portrayal of violence and crime.
Pussycat,
I was being humorous! However, whether it was the title of 1920-1930’s movie does not detract from the fact that the greed in America and the globe was instigated by people looking for a good deal. Some would say that there greed for unrealistic profits caused the housing bubble.
Know, if someone offered a AAA bond/credit product paying a higher interest rate that US treasury and you did not ask yourself how is this possible, was not truly honest to themselves.
Any homeowner who hocked themselves to the hilt on a NiJA loan for an over priced house was also greedy. They, without thinking about it, believed house prices would go up forever and that they could sell out if they could not cover the payments.
This whole mess for whatever the reason/myth was based on greed. There is just no other way to explain it.
The realtors(tm), the mortgage brokers, the appraisers, and the Ibanks were the facilitators. They were paid on a fixed fee basis and not on the likelihood of the completion of the contract in exchange for the asset.
I still think its a good creed to live by. If you are not trying to cheat someone, good chance you will not become a sucker or john. Don’t you know, every con requires a patsy who is sucked in by his or her own greed?
lol
How anybody can take that title literally is beyond me? (sounds like it)
–what title? — the rather insidious comedy of the late 30’s?
The main character is called “Larson E. Whipsnade”.
– main character in what?
Hello?!? Anybody home in the upstairs attic?
– your superior attitude would come off better if your comments made sense : )
This is the stupidest comment I’ve ever seen.
Just kidding, pussycat! : )
tongue in cheek, don’t scratch me
Good points lostcontrol and everybody . I would just like to add that if someone just tries to make a profit by engaging in a legal investment ,without committing some fraud or misrepresentation ,even if the motive is profits or greed ,it’s OK in terms of the law at least . But the major problem with this housing boom is that it required a whole lot of cheating to make it happen . Human nature is such that seeking profit has always been around . How the fraudulent borrowers could of bragged about how much they were ahead of the game ,while all the while they knew they had to commit fraud and cheat in order to do it ,likewise the lenders touting big profits when they knew they were closing their eyes to making bad loans or preventing fraud is a joke . The real estate industry could of had a hand in stopping the fraud also ,but instead the majority just took the profits and even some joined in on the fraud and help set up the fraudulent deals . If Wall Street had just rated the loan paper “high risk “,than the money would of dried up .
The advertisers /Corporations and the main stream media were not about to object to prices skyrocketing ,and somehow the NAR was allowed to spin BS to the public like , “Real Estate always goes up .”
All the good people on the block I use to live on were question -ing the prices and everybody was saying ,”Who are these people who have the kind of incomes who can afford these prices ?” Sometimes i thank God that the person who bought my house paid cash for it and wasn’t involved in some kind of liar loan .I wish at that time that i knew what was really happening ,but I was already retired and didn’t know.
Housing Wizard,
I hate to say it, but the way things work in this country now:
1. let the buyer beware!
2. Let the devil take the hindmost!
3. You are a fool to trust anyone!
4. I got mine, jack!
5. He who dies with the most toys, wins!
6. etc, etc, etc.
This attitude is not a solid basis upon which to build a community or a society. I believe the Greeks and the Romans lost it when they lost their fear of their gods who suppressed the individual’s desires to those of the community. If you have an opportunity to read Greek plays, you notice some basic sayings that were moral lessons.
One of those that I recall, ?The Gods make one proud before the fall, or something like that or a more recent version of the pride before the fall. Sorry, its been a while.
Things or going to have to change or we better all start learning to snap to the demands of our slave masters.
“The Gods make one proud before the fall, or something like that or a more recent version of the pride before the fall.”
Rev 3:17 because thou sayest–I am rich, and have grown rich, and have need of nothing, and hast not known that thou art the wretched, and miserable, and poor, and blind, and naked,
Luk 1:51 He did powerfully with His arm, He scattered abroad the proud in the thought of their heart,
Luk 1:52 He brought down the mighty from thrones, And He exalted the lowly,
Seems to be the way it is these days lostcontrol ,and if the majority is the way you outlined ,than I can’t imagine a society that will function very well. But I think you are right that greed for making easy money drove the market up,along with the fraud .I remember talking to a friend during the boom that was all thrilled about real estate prices going up .I asked the friend,
“What is going to happen when your kids can’t buy real estate
because it’s so expensive ?” The friend said ,”They will just have to get better jobs.” I mean ,how blind and selfish can people get !
The depression the US will face in the coming years is just getting started. As banks fail and perp walks continue, more people will realize how housing speculation has destroyed the US economy. Why do you think the FDIC is taking out full-page ads in major newspapers to reassure people?
The reality is that there are three main parts of the private-sector economy in the US: finance, health care, and housing. Note that all three require abundant amounts of cheap debt. Where there are certainly US companies active in other parts–energy, materials, technology–most of their footprint is offshore, and only the profits flow back to the US.
We all know what is happening to finance and housing. The real question is what will happen to the US economy when the only viable sector left is health care? I submit that major reductions in living standards are on the way. It is impossible to build a world class economy on health care.
Keep the popcorn popping,
Red Baron
Right ,so what are the answers Red Barron .What is American going to build their economy on ? I ask myself this question almost everyday .
I had a nightmare or a dream and I possed a solution in today’s bits and buckets thread. Its not well thought out, but consideration it may be what ends up happening!
Just thinking outside the box.
lol
And as usual, my language is garbled. Please someone shoot me!!!
lol
Bang!
Dude,
Thank you for putting me out of my misery!
Good night Gracie.
I always AIM to please.
Does history repeat? Not exactly but it can sometimes rhyme.
The Great Depression and some parallels to events of today.
Florida land bubble. Everybody and their brother speculated on Florida. (It’s the entire USA now).
ARMS–Adjustable rate Mortgages were heavily used. (Widespread use again in the 2000’s).
Floods and droughts affected the food supply. (Sound familiar).
Banks seized up and would not loan money to each other. (Deja vu all over again).
People (borrowed) leveraged themselves into stocks. (Happening with commodities).
The roaring 20’s (The roaring 2000’s ?).
They had deflation, we have inflation because of the money pumping by the Fed. At least for now, that is the huge difference
Things that make you go hmmm.
The Fed has altered the “natural course of things” but has not changed the destination, I don’t believe.
Call me skeptical…
“To people who have committed fraud or are contemplating doing so, FBI Director Robert S. Mueller III said, ‘We will find you, you will be investigated and you will be prosecuted.’”
“Banks reported nearly 53,000 cases of suspected mortgage fraud last year, up from more than 37,000 a year earlier and about 10 times the level of reports in 2001 and 2002, according to the Treasury Department’s Financial Crimes Enforcement Network.”
“In Washington, the U.S. Justice Department and the FBI on Thursday announced ‘a national takedown of mortgage fraud schemes,’ saying 404 defendants around the country were charged in 144 cases since March 1. ”
Also skeptical.
What occurred to me when reading all this was the caseload. This costs money. Lots of money.
What about local, state and Fed budget cutting??
Aren’t we having shortfalls in tax revenues?
How is this going to be funded??
Maybe these actions will fall to budget cuts, also.
“How is this going to be funded??”
There could be lots of taxes owed, depending on the details of each fraud case. Even if only a modest portion of taxes owed is collected, there should be enough to pay for related FBI and IRS enforcement activities.
Given the number of fraud cases, I’d think you’d need more than just FBI agents to prosecute all of the cases. The current caseloads must be staggering.
Prosecuting 400 cases might have been useful from a deterrence aspect if done 4 or 5 years ago. Now the money’s gone, there’s less left to deter, and a mammoth number of potential cases to investigate and prosecute. Does Congress care enough about this problem to provide the FBI and IRS the necessary funding?
I don’t think Congress cares about anything but getting re-elected. The “people” don’t care about all the fraud. They were part and parcel of it.
The “people” want bailouts and free stuff.
So, let’s see……….take all the bad loans and provide debt forgiveness to millions of “voters” and their neighbors (remember this is about restoring neighborhoods and providing a floor to the housing crisis), OR………..give money to the FBI to prosecute bankrupt fraudsters??
You think there is any money to get from people who are upside down on their loans and have had a really good time spending on frivolous fancies the past 5 years??
I vote Bailout of the Home-stealers. After all, they are victims of the marketplace. Everything would have worked out just fine if this damned market turn-around hadn’t occurred.
Spread the pain around and print some more money to pass around to everyone except the people who actually provide the sustenance this country creates. That’s the way I see it going.
Well Fairfax County VA is already making huge cuts in their school budget. Summer school was cancelled this year. All because of the housing situation. Yet housing is still unaffordable for most teachers in the county. ???!!! The COLA was reduced to 2% this year for teachers. The county is screaming that next year is going to be even worse! They did increase the class size by about .5 or something but no teachers as of yet have been fired.
What worries me is that this teacher friendly county has a policy of automatically deducting a huge chunk of a teacher’s paycheck for investment in the “retirement fund”. A fund that I believe has invested in this housing debacle. How is this going to affect a teacher’s retirement?
Florida Tidbit from personal experience:
This is the second time I win and Auction, and I get a counter offer. First house I bid and won 200k, now I bid and won 190k on another house. I get this counter offers as if I didn’t already stretched myself to win the bid. Both times I have been tempted to say a lower number as a counter (theres no provision for this in the first 7-days, after that I can do what I want) but I just say no more. Ill tell you, in both auction I beat several flippers and contractors, they want the houses, but at much lower prices than me a FTHB. I dont think theres much dumb money left, execpt mine, which is just ‘kind of dumb’ I just want to afford it and Ill outlive the price overshoot down anyway.
What?
Okay now that I have had coffee i get it.
You are a Full Time Home Builder and you are trying to buy houses at auction. You win the auction and the bank(FB or HB) is coming back with a counter offer for more than your winning bid(curse)?
You are right to come back with a lower counter offer to the bank(FB or HB) because you are now investing more time into the transaction. Until the dumb money has learned this, the banks(FB orHB) will keep trying to get some of their dumb money back.
Sorry I meant to say I win AN auction among other corrections
… FTHB= First Time Home Buyer. I’m just angry at these wacko banks.. By the way the first house which I won the bid for 200k went on another auction (ushomeauction) a couple of months later and went for LESS than the 200k I would have given, its been 2 months since this last auction and I still haven’t seen it transferred so I guess they didn’t sell it once more.
I feel for you and the many people like you that just want your one place to live and have a stable life.
Anyone believe these fines and restitution will be paid?
“One case, which has already come close to a resolution, shows the seriousness of mortgage fraud penalties. Shannon Ferguson, 36, of Canton Township…The loans totaled $732,000. Under the terms of her plea agreement, she faces up to 46 months in prison, a $1 million fine, and $732,000 in restitution.”
“Co-defendants Tariq Hamad and Kalil Khalil pleaded guilty to broader mortgage fraud schemes encompassing loans totaling $21 million. Hamad was sentenced in September 2007 to 110 months in prison and ordered to pay $11.5 million in restitution. Khalil was sentenced in February 2008 to 60 months and ordered to pay $11.1 million in restitution.’
The only way they can pay it back is to commit another fraud.
Lock em all up and throw away the key. I’m sick of the amount of dishonesty and indecency that went on.
It seems like the cash-back deals should be the easiest crimes to detect. Where was the FBI before 2008????
As usual the Government is busy pursing its own agenda, performing on a token effort when the little people get a little too loud.
Not clear why you even need the FBI on this. Can’t the local Clerk of Courts and County Sheriff read and count? Tendency seems to be to blame Washington for everything. Isn’t fraud a state or local crime?
Crazy housing Bill requires online sales to be reported to Feds
Fri Jun 20, 2008 5:27PM EDT
It’s true what they say about observing the creation of sausage and lawmaking.
Deep in the bowels of Senator Chris Dodd’s new 630-page housing Bill, which is an attempt to address the housing crisis by refinancing and buying out subprime mortgages, lies a provision that will require a variety of companies to report electronic sales to the government. According to FreedomWorks, the Bill features a new addition (slipped in last week with no debate) that will require every credit card company and online payment system (including eBay’s Paypal) to report transactions to a government-managed database. In other words: The government may soon be able to know every book, movie, piece of clothing, and, really, anything else you purchase unless you pay for it with cash.
Scary? You better believe it.
There are more layers than an onion in the Dallas fraud indictments, and they involve local elected officials.
If you think for one minute that the feds were proactive in making these arrests, think again. It took over 3 years of whistleblowing, screaming, and fighting like mad to get them to even look at the documents that were handed over on a silver platter. Until the housing market crumbled, feds had no interest in pursuing mortgage fraud criminals.
Operation Malicious Mortgage was a dog and pony show. And take the blinders off, the sellers and straw buyers of these homes go in with eyes wide open and make a profit. They should be prosecuted along with the other gangsters.