July 15, 2015

Scams Exposed When The Market Has Slowed

The Dallas Morning News reports from Texas. “A nationwide mortgage scam with roots in the devastating U.S. housing market decline sent dozens of financial workers and builders to federal prison, cost banks millions and is still reverberating through the North Texas economy. The scheme, known as a builder bailout, happens when nervous builders with development loans coming due are ‘motivated to move excess inventories when the market has slowed and sales have begun to lag,’ Freddie Mac says. In such cases, the developers essentially pay for buyers and distort the sales prices to have money left over to pay those involved in the sham transaction.”

“Regardless of who was or wasn’t prosecuted, officials say the scams — which were widespread during the last North Texas housing boom — contributed to inflated home values in neighborhoods, leading others to pay more than they should have. And builder bailout mortgage fraud, with its distorted sales prices, ultimately harms the overall housing market and affects the legitimate homebuyer, experts say. ‘You can have whole neighborhoods that are economic wipeouts,’ said Richard Hagar, a national expert on mortgage fraud. ‘Who did it really help? The builder. He got his sale.’”

Real Estate Rama on Florida. “A Miami-area real estate developer and owner of a mortgage company, his business partner and a senior mortgage underwriter each pleaded guilty to a mortgage fraud scheme involving federally insured mortgages that caused losses of $64 million to the Federal Housing Administration (FHA). Including these defendants, 25 individuals have pleaded guilty to offenses related to this scheme to date.”

“Hector Hernandez’s mortgage company, Great Country Mortgage Bankers, specialized in mortgage loans that were insured by the FHA, a division of HUD. Under the program, HUD relies on lenders like Great Country to review and approve only those borrowers who meet the employment, income and other financial requirements needed to qualify for an FHA mortgage.”

“According to admissions made in connection with the guilty pleas, although most of Great Country’s potential borrowers did not qualify for the FHA-insured loans, Hector Hernandez and his business partner, Aleida Fontao, directed Great Country employees, including underwriter Olga Hernandez, to falsify important documents in the potential borrowers’ loan applications to make them appear qualified. In particular, Hector Hernandez and Fontao admitted to pressuring their employees to approve and close loans using earnings statements and verification of employment forms that made it appear as if the borrowers had higher incomes and more favorable work histories than they actually did, and documents falsely improving or explaining borrowers’ credit histories.”

“After Great Country closed the fraudulent loans, the company sold the loans to financial institutions for profit. In connection with their guilty pleas, the defendants admitted that they offered kickbacks to the borrowers in the form of cash back after closing.”

The Daily Democrat in California. “After a three-week jury trial, a federal jury found Peter Kuzmenko, 37, of West Sacramento; Olga Palamarchuk, 45, of Rancho Cordova; Pyotr Bondaruk, 44, of Sacramento; and Vera Zhiry, 35, of Sacramento; guilty of conspiracy to commit mail fraud, related to a mortgage fraud conspiracy. Palamarchuk and Bondaruk were also found guilty of making false statements to a financial institution and money laundering. Zhiry was also found guilty of money laundering.”

“According to evidence presented at trial, Palamarchuk, a loan officer at Capital Mortgage Lending Inc., recruited Bondaruk to purchase two houses using 100 percent financing and to refinance and obtain a home equity line of credit on one of the houses. In order to qualify for the loans, Palamarchuk and Bondaruk submitted fraudulent loan applications to lenders, falsely stating Bondaruk’s employment, income, assets, and intent to occupy the homes as his primary residence.”

“In addition, the defendants fraudulently inflated the value of the properties and diverted the excess funds to themselves.”

The Arizona Republic. “One Phoenix homebuyer thought he had found a great deal when Zavier Kay Hafiz of ZK Group sold him a house in 2012 and even provided the financing. The buyer was making regular monthly payments to Hafiz when another lender began foreclosure on the house. An FBI and Arizona Attorney General’s Office investigation found that Hafiz, also known as Xavier Hafiz DeAnda and Hafiz K. Sanad DeAnda, had taken out his own loan on the house. He wasn’t making payments on that loan, which the buyer knew nothing about.”

“The investigation found Hafiz, 31, misled almost 40 other homebuyers on similar real-estate deals in Arizona. In May, he pleaded guilty to fraud and was sentenced to six years in prison and ordered to pay $3.5 million in restitution. Thanks to bad deals like the ones perpetrated by Hafiz, Arizona ranks No. 4 nationally for mortgage fraud, according to a leading monitor of the crime.”

“During the past year, federal and state regulators have cracked down on dozens of fraudulent real-estate deals in Arizona that have cost homebuyers and investors hundreds of millions of dollars. In May, former Phoenix contractor Paxton Jeffrey Anderson was sentenced in U.S. District Court to eight years in prison for mortgage fraud. His bookkeeper, Joseph John Plany, got a four-year term. Anderson and Plany would use the money from the construction loans for their own expenses, including trips to the Kentucky Derby and gambling, according to court documents. Many victims of the scheme lost homes to foreclosure and were forced into bankruptcy.”

“Arizona has ranked in the top five states for mortgage fraud on the LexisNexis Annual Mortgage Fraud Report since the housing boom, when cash-back deals became common. The deals, made possible by loose lending guidelines, revolved around speculators flipping houses among themselves every few months and taking cash out of each deal. At the time, I remember some, who thankfully aren’t in the real-estate industry anymore, questioning whether cash-back deals and other mortgage fraud really hurt anyone.”




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78 Comments »

Comment by Senior Housing Analyst
2015-07-15 03:21:30

Plano, TX Housing Prices Fall 21%

http://www.movoto.com/plano-tx/market-trends/

Comment by txchick57
2015-07-15 09:52:09

I wish. I don’t know where this guy is getting his data. Houses in that dump sell in days with multiple offers. After 30 years of not being able to give them away.

You want to see some real delusionals? Look at city-data.com under the Dallas forum.

This place is a true shithole now. Traffic is nightmarish. People from everywhere are pouring in.

Comment by Mafia Blocks
2015-07-15 10:20:47

Well not really. Not at all.

Inventory is up 121%, DOM is rising and demand is falling.

 
Comment by Jingle Male
2015-07-15 12:34:37

But Tex, he is a SENIOR Housing Analyst. Maybe he means a senior moment housing analyst!

He has been telling my for 6 years I am upside down and losing money, while my investments have tripled my equity and my cash flow is substantial.

HA! We just ignore him now.

Comment by Ben Jones
2015-07-15 12:43:31

‘tripled my equity’

Yeah, on one side it’s all up and away and the other there’s no fraud.

Not 7 or 5 years ago. It’s going on right now:

‘Mortgage Bankers Admit Defrauding FHA’

‘Great Country Mortgage executives plea guilty’

‘July 14, 2015′

‘By Mortgage Daily staff’

‘Three people at a mortgage banking firm in the Miami area have admitted their roles in a massive fraud scheme involving government-insured mortgages. Great Country Mortgage Bankers had an exceptional ability to obtain financing on Federal Housing Administration loans for borrowers who didn’t qualify, according to federal prosecutors.’

‘The Department of Housing and Urban Development relied on Great Country to review and approve only borrowers who meet FHA’s employment, income and other financial requirements.’

http://www.mortgagedaily.com/stories/FhaFraud071415LP.asp

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Comment by Jingle Male
2015-07-15 13:57:56

Ben, those were 2006-2008 transactions. Read the whole article.

According to the indictment, beginning in January 2006 and continuing through September 2008, Hernandez and others allegedly obtained mortgage loans insured by the Federal Housing Administration (FHA), a division of HUD, for unqualified borrowers by exaggerating the borrowers’ income and otherwise misrepresenting their financial condition.

 
Comment by Ben Jones
2015-07-15 14:17:53

I’m not a subscriber.

‘Thanks to bad deals like the ones perpetrated by Hafiz, Arizona ranks No. 4 nationally for mortgage fraud, according to a leading monitor of the crime.’

‘During the past year, federal and state regulators have cracked down on dozens of fraudulent real-estate deals in Arizona that have cost homebuyers and investors hundreds of millions of dollars.’

You may remember this lady:

http://mortgagefraudblog.com/

 
Comment by Ben Jones
2015-07-15 14:20:11

‘Usually when we think of mortgages that require a low down payment, the typical options are VA mortgages, conforming loans with 5% down and private mortgage insurance, or FHA loans with 3.5% down.’

‘However, in 2015 there will be a new choice in the mix: Both Fannie Mae and Freddie Mac have been authorized by government regulators to purchase loans with a 97% loan-to-value ratio (LTV), meaning just 3% down. Previously, conforming loans required at least 5% upfront — so the new standard represents a considerable reduction in the amount of cash needed at closing for many borrowers.’

http://www.thesimpledollar.com/the-very-new-deal-how-fha-mortgages-are-changing-in-2015/

 
 
Comment by Professor Bear
2015-07-15 17:33:19

Is the FHA aiding and abetting fraud?

 
Comment by Professor Bear
2015-07-15 17:34:38

“3 Pleas in $64 Millon FHA Mortgage Fraud
July 15, 2015 — Leave a comment”

Hmmmmmm…

 
 
Comment by Mafia Blocks
2015-07-15 12:46:01

Houses depreciate my friend.

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Comment by txchick57
2015-07-15 12:56:25

Dude, you sound like the taxi driving daytrader of 1999. Your equity can vanish in a heartbeat. I wouldn’t buy a house in the DFW area under any circumstances.

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Comment by Jingle Male
2015-07-15 14:02:19

I wouldn’t buy a house in DFW either. I bought all my houses in 2008-2010. They all cash flow nicely. The tripling of equity has value unless I sell. Sold one in 2013 for a 90% return in the 3 years I owned it.

BTW, it’s good to see you back on this blog. It’s been a while.

 
Comment by Mafia Blocks
2015-07-15 14:09:24

You’re underwater Jingle_Fraud.

 
 
 
 
 
Comment by Mafia Blocks
2015-07-15 03:30:04

Realtor Politician Steered Public Money Real Estate Sale To Himself; Indicted On 10 Criminal Counts

http://www.cibolabeacon.com/news/vinson-and-gallegos-indicted-for-misuse-of-funds/article_455c6d94-2a14-11e5-bffb-4fc333b04d20.html

 
Comment by 2banana
2015-07-15 04:49:05

Yet John Corzine and every wall street banker walks free with huge bonuses…

Comment by Dale
2015-07-15 10:22:03

…..and where is Eric Holder these days?

After 6-Year Tenure Not Prosecuting Banks, Eric Holder Returns ‘Home’ to Defend Them. Critics say new position of former attorney general, known for protecting big banks, is a dramatic example of the revolving door

http://www.commondreams.org/news/2015/07/07/after-6-year-tenure-not-prosecuting-banks-eric-holder-returns-home-defend-them

Comment by In Colorado
2015-07-15 13:20:51

If they aren’t being prosecuted, then why do they need to be defended?

And yes, I know, this is a very lucrative “do nothing” job for Holder. His reward for playing along when he could prosecute.

 
 
Comment by Dale
2015-07-15 10:36:06

Sorry if this is a double post.

After 6-Year Tenure Not Prosecuting Banks, Eric Holder Returns ‘Home’ to Defend Them
Critics say new position of former attorney general, known for protecting big banks, is a dramatic example of the revolving door

http://www.commondreams.org/news/2015/07/07/after-6-year-tenure-not-prosecuting-banks-eric-holder-returns-home-defend-them

 
 
Comment by Jingle Male
2015-07-15 05:34:38

I helped the FBI bust Kuzmenko and his lackey Aaron New. They cost our HOA over $25,000. Many innocent buyers in our neighborhood paid several $100,000 over true market value because these fraudsters inflated the market with fraudulent sales between themselves.

It is good to see they will be doing some hard time!

Comment by Combotechie
2015-07-15 05:48:38

“Many innocent buyers in our neighborhood paid several $100,000 over true market value because these fraudsters inflated the market with fraudulent sales between themselves.”

“True market value” - now there’s an interesting term.

Comment by Jingle Male
2015-07-15 07:31:07

True market value is not so mysterious….

It is the average of a combination of three things:

1) Reproduction cost
2) Income capitalization
3) Market comparables

I always try to by when the price goes below #1, due to factors influenced by #2 & #3.

Unfortunately, that has not been the case since 2011, when the market comps started rising as the hedge funds jumped into the fray.

Comment by Mafia Blocks
2015-07-15 09:06:06

But instead you paid 3x construction costs….. at your own peril.

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Comment by Professor Bear
2015-07-15 17:36:28

4) Fraud premium

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Comment by Professor Bear
2015-07-15 17:37:28

P.S. This one is destined to disappear in the next housing price crash.

 
 
 
 
Comment by Pangolin
2015-07-15 05:58:40

This all happened last bubble and it’s all happening again now. And no one cares. Worse it is being actively encouraged. People want their property values as high as possible.

There will always be fraudsters, but going after these roaches when the people that enable and allow thousands and thousands of such roaches to flourish is window dressing.

Comment by Jingle Male
2015-07-15 07:38:18

I don’t see the wholesale mortgage fraud today that happened in 2006 & 2007. The lenders are much more diligent in their underwriting now. The days of “fog a mirror, get a loan” are long gone. That doesn’t mean they won’t come back, but it is not happening in this market.

Comment by Ben Jones
2015-07-15 07:50:07

Aug 14, 2014
Stated income loans make comeback as mortgage lenders seek clients

‘It’s been six years, but stated income loans and subprime lending are finally making a comeback!’

‘For those unfamiliar with these financial terms, here’s a quick definition of each.’

‘Stated Income Loans: loans in which a lender does not verify the borrower’s income. Instead, the borrower simply lists their income on the loan application with no supplemental documentation necessary.’

‘Subprime loans: A type of loan offered at a rate above prime to individuals who do not qualify for a traditional loan due to a bad credit score or low income.’

‘Due to the burst of the housing bubble in 2007, stated income and subprime loans temporarily disappeared, but now they’re back and better than ever. Out of all the private lenders in Phoenix, Hanson Capital Group is one of the only ones that currently offers these types of loans.’

‘Related: Big NEWS….100% Financing Available’

‘For several years now, mortgage lenders have been enforcing strict rules and regulations on borrowing, making it nearly impossible for aspiring home owners to acquire the necessary loans to purchase a home.’

‘Here at Hanson Capital Group, we want everyone to reach their financial dreams and that’s why we’re bringing back these types of loans. We know that not everyone is an “ideal borrower” in the eyes of corporate banks, but that doesn’t mean that they aren’t an appropriate candidate for a mortgage loan. It just means that they haven’t found the right type of lender yet for their unique financial circumstances.’

‘Related: When other banks say no, we say yes!’

It took me about 10 seconds to find these.

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Comment by Mafia Blocks
2015-07-15 09:07:16

Mortgage, realtor and appraisal fraud is bigger today than it ever was.

 
Comment by Jingle Male
2015-07-15 12:38:32

I understand Ben, but this is not the pervasive sub-prime lending of 2006-2007.

I believe lending will continue to loosen and more of this will be done in the future. The cycles ebb and flow, come and go. That is the danger and part of what makes life interesting.

 
Comment by Mafia Blocks
2015-07-15 15:18:03

Paying 250% premiums for a depreciating asset and then doubling down on the losses by financing is the very definition of Subprime Jingle_Fraud.

 
Comment by Professor Bear
2015-07-15 17:43:22

‘It’s been six years, but stated income loans and subprime lending are finally making a comeback!’

Woo-hoo! Subprime is back! Great day in the morning!!!

 
Comment by Professor Bear
2015-07-15 17:44:22

“I understand Ben, but this is not the pervasive sub-prime lending of 2006-2007.”

It’s different this time.

 
 
Comment by Wang6Pack
2015-07-15 15:24:14

You tell ‘em Jingles!

For example, I had to put 40% down (my entire families life savings) on the apt. I bought in Ordos. Millions of us all over the country have done the same. So we are all in baby, but no worries here. :) Rock solid mortgage practices mean nothing can go wrong!

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Comment by Professor Bear
2015-07-15 17:41:55

I care, but I am no longer amazed to the degree I was during the last housing mania upswing. The lessons of Galbraith’s tour de force are gradually sinking in over time:

A Short History of Financial Euphoria
(Penguin business) Paperback – July 1, 1994
by John Kenneth Galbraith (Author)

P.S. Galbraith was the first economist I ever heard give a public talk. I was hooked.

It was much later when I learned that many members of the economics profession didn’t much care for his perspective.

 
 
 
Comment by taxpayers
2015-07-15 06:29:31

smelly Mel Watts just getting started w 3% and 0 down
doin it fo the chillins and the folks

Comment by Professor Bear
2015-07-15 09:17:26

Next up: Another foreclosure crisis with myriad black victims of predatory lenders…

 
 
Comment by Professor Bear
2015-07-15 06:34:25

“In such cases, the developers essentially pay for buyers and distort the sales prices to have money left over to pay those involved in the sham transaction.”

So cash back at closing is a no-no.

By contrast, offering an expensive car in the garage as a ‘deal sweetener’ was perfectly legal, right?

 
Comment by Ben Jones
2015-07-15 06:38:49

‘Callier, meanwhile, went down for his role with Top Dog-Oak Cliff LP, developers of Lake Cliff Tower. The DeSoto man recruited someone to buy a condo there for the “purported price” of $199,900, court records said. The condo was valued at $135,370 for tax purposes at the time. A sales contract was drawn up and other conspirators put false information about the buyer’s income, employment and assets in loan documents, records show.’

‘A loan for $196,278 was approved for the condo. When the sale closed, $38,857 of Top Dog’s proceeds was wired to Callier’s company, All Around Relocation, “as a kickback for recruiting the buyer,” court documents said.’

‘Stephen Everbach was a partner in Top Dog-Oak Cliff, which converted the former hotel into condos with the help of a $4 million subsidy from Dallas taxpayers.’

‘Everbach, 52, said he didn’t know anything about fraud connected to the sales. He declined to comment further, but his attorney, Greg C. Noschese, issued a statement.’

“My client was shocked by the fraudulent conduct uncovered by federal investigators,” Noschese said. “He was never a target of the investigation and was never a defendant in the case.”

‘In 2011, the lender foreclosed on the condo, which is currently valued at $120,830 by the appraisal district. At least seven other Lake Cliff Tower condos were sold by Top Dog in a similar manner, according to federal court documents. Callier, 34, was sentenced to 2 1/2 years in prison, but his cousin, Rickey Callier, said he isn’t sure that’s entirely fair.’

“There were some people who made a whole lot more money than he did,” said Rickey Callier, who was not involved in the scam. “For some reason, the feds zeroed in on the people on the bottom. As usual.”

http://www.dallasnews.com/news/metro/20150713-recession-era-federal-mortgage-scams-still-echo-in-dallas-area.ece

This is just one condo in one city.

Comment by rms
2015-07-15 23:09:13

“My client was shocked by the fraudulent conduct uncovered by federal investigators,” Noschese said. “He was never a target of the investigation and was never a defendant in the case.”

I’m shocked… shocked I say. Hehe.

 
 
Comment by Ben Jones
2015-07-15 06:40:45

‘Four people were found guilty of conspiracy related to mortgage fraud Monday after a three-week trial in federal court in Sacramento.’

‘The four were originally arrested in October 2011. They are Olga Palamarchuk, 45, of Rancho Cordova, Peter Kuzmenko, 37, of West Sacramento; and Pyotr Bondaruk, 44, and Vera Zhiry, 35, both of Sacramento.’

‘Court documents say Palamarchuk, who was a loan officer at Capital Mortgage Lending Inc., recruited Bondaruk to buy two homes using 100 percent financing, and then to get a home equity loan on one of the houses.’

‘To qualify for the loans, Palamarchuk and Bondaruk allegedly submitted fraudulent loan applications to lenders, falsely stating Bondaruk’s income, employment and his plan to live in the homes as his main residence.’

Comment by Professor Bear
2015-07-15 09:18:58

It’s great to see these fraud artists were able to obtain 100% financed loans to fraudulently buy homes, even as many American families are priced out of the housing market.

Comment by Jingle Male
2015-07-15 12:39:55

They are all tenants now PB. Guess who pays their room and board?

Comment by Mafia Blocks
2015-07-15 15:19:50

lol. Speaking of fraud artists.

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Comment by Professor Bear
2015-07-15 19:59:38

Rent-free living and 3 squares a day is where it is at for former real estate fraudsters.

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Comment by Ben Jones
2015-07-15 06:44:09

‘A trio of Miami real estate developers were sentenced to prison time Wednesday for their roles in a $27.8 million mortgage fraud scheme, according to the U.S. Attorney’s Office for the Southern District of Florida.’

‘In total, 11 others have been convicted of fraud in connection with the mortgage fraud scheme, according to the U.S. Attorney’s Office. The three members of the Mendez family owned and controlled condo developments throughout Miami-Dade. The trio, along with their co-conspirators, would facilitate payments to straw buyers and submit fraudulent loan applications on behalf of the buyers to get mortgages, according to trial evidence.’

‘The scheme fell apart when eventually, the trio and their co-conspirators couldn’t make mortgage payments and dozens of units went into foreclosure, causing a combined $27.8 million in losses to the Federal Housing Administration, Freddie Mac, Fannie Mae and private lenders, according to the U.S. Attorney’s Office.’

 
Comment by Ben Jones
2015-07-15 06:56:32

‘I remember some, who thankfully aren’t in the real-estate industry anymore, questioning whether cash-back deals and other mortgage fraud really hurt anyone’

This is an important point. If it’s all going to the moon, what does it matter how it gets there? And nobody’s going to notice fraud when it’s all boom-boom. They look like geniuses.

Wasn’t it over a year ago that we read about appraisers allowing higher numbers for bidding wars? Subprime is back. Interest only is back, no-doc. Are there only angels left in the mortgage business? I’d say go find me one angel.

In early 2005, I didn’t post much about Michigan or Ohio because I thought their housing problems were not bubble related. Then I started to see that enormous subprime lending went on there, dug a little deeper and sure enough, there was just as big a bubble in Michigan as Florida.

I said then; it’s hard to distinguish fraud from the other mania activity. That’s why it’s inevitable.

Comment by localandlord
2015-07-15 19:59:31

I think I engaged in mortgage fraud in 2001 and not even known it.

Since I hate the process of taking out loans (a good thing, IMO) I did a double refinancing of my home and a rental property (the beloved “crack alley house”) at the same time.

There was a point where the bank tried to steer me to finance a different rental property but I said the magic word CRA and they got really helpful in a hurry.

Fast forward a few years and I pulled my credit report to discover I’d supposedly inhabited the rental property and that loan was sold to fannie mae. I guess the bank couldn’t wait to get rid of it.

I’m not sure what happened to the loan on my home - I wonder if they kept it in house. At one point I inquired if it was assumable and the bank said it was and mailed me a sheaf of papers for potential buyers. That wouldn’t be possible if it were fannie mae, would it?

 
Comment by Professor Bear
2015-07-15 20:00:49

“That’s why it’s inevitable.”

And ubiquitous.

Comment by Mafia Blocks
2015-07-16 04:15:56

And on a global scale making the collapse broader and deeper.

 
 
 
Comment by Ben Jones
2015-07-15 07:00:43

Speaking of scams:

SSE Composite Index -Shanghai

3,805.70 Down 118.78(3.03%)

http://finance.yahoo.com/q?s=000001.ss

‘Revive the A shares, benefit the people; revive the A shares, benefit the people!’

Comment by Ben Jones
2015-07-15 07:25:18

‘For the second quarter, China reported gross domestic product (GDP) grew 7.0 percent on-year, beating a Reuters poll forecast for 6.9 percent. A spokesperson for China’s National Bureau of Statistics said GDP figures weren’t inflated and the improvement was “hard won,” according to a Reuters report.’

“The stronger-than-expected figure will inevitably spark renewed questions over the veracity of the official data,” Julian Evans-Pritchard, a China economist at Capital Economics, said in a note Wednesday. But he added, “While actual growth is almost certainly a percentage point or two slower than the official figures show, there are good reasons to think that the latest figures are mirroring a genuine stabilization of conditions on the ground.”

‘That’s a sentiment mirrored by Louis Kuijs, a China economist at RBS. “We’re always struggling” with China’s data releases due to the country’s quirks, including only publishing some components annually, said Kuijs, noting that some figures suggest growth should have slowed in the second quarter.’

That’s not crow you’re eating Sir, it’s veal. I swear.

Comment by Ben Jones
2015-07-15 07:40:53

‘Macau: Things Can’t Get Any Worse, Sands China Upgraded’

 
Comment by redmondjp
2015-07-15 09:19:23

Wow, so China’s GDP came in at exactly the same number, right down to the tenth, that they said it would.

Who woulda thunk it?

These people have learned something from us, I tell you. We done traned ‘em rawght!

 
Comment by Professor Bear
2015-07-15 09:20:37

A spokesperson for China’s National Bureau of Statistics said GDP figures weren’t inflated and the improvement was “hard won,” according to a Reuters report.’

Too bad Mr. Market no longer believes those numbers.

 
 
 
Comment by Ben Jones
2015-07-15 07:28:24

‘Federal Reserve Chairwoman Janet Yellen urged lawmakers to tread lightly when it comes to overhauling the central bank, warning that proposed changes could undermine its ability to support the economy.’

‘In prepared testimony, Yellen will tout the Fed’s own efforts to boost its transparency as a way to discourage lawmakers from pushing their own proposals to bring the Fed under stricter oversight.’

“Efforts to further increase transparency, no matter how well intentioned, must avoid unintended consequences that could undermine the Federal Reserve’s ability to make policy in the long-run best interest of American families and businesses,” she said.’

Comment by Ben Jones
2015-07-15 07:39:34

‘The Federal Reserve on Wednesday said it sees signs that investors in credit markets have shown “some signs of reach-for-yield” behavior, alluding to stronger sales of private debt that offers higher interest rates but also pose more risk. Still, the Fed also said the financial sector is also more “resilient” to systemic breakdowns because of higher capital reserves.’

Comment by Ben Jones
2015-07-15 08:19:18

How low can they go? Central bank policy easing in 2015

Indonesia’s central bank became the 18th to ease monetary policy this year, surprising markets on Tuesday by cutting interest rates in the face of tame inflationary pressures only three months after raising them.

Below is a chronological list of central bank actions taken to counter deflationary pressures stemming largely from collapsing oil prices, or to boost flagging growth.

http://finance.yahoo.com/news/low-central-bank-policy-easing-153533318.html

 
 
Comment by Professor Bear
2015-07-15 09:21:57

One thing is for certain: If lawmakers don’t tread lightly when it comes to overhauling the central bank, a Wall Street stock market crash is baked in the cake.

 
 
Comment by Ben Jones
2015-07-15 07:31:18

I just got this email:

‘Hope this message finds you well.’

‘New York City is notorious for its luxurious real estate and its difficult real estate market. As a result, investors are turning to experts like XXX for help, when it comes to buying their perfect Manhattan home.’

‘XXX is a New York City real estate authority on how to buy in New York’s competitive market and would be a great resource for topics on how much to pay or overpay for the property you’re after.’

 
Comment by Ben Jones
2015-07-15 07:33:55

‘Most people think that the big bank bailout was the $700 billion that the treasury department used to save the banks during the financial crash in September of 2008. But this is a long way from the truth because the bailout is still ongoing.’

‘The Special Inspector General for TARP summary of the bailout says that the total commitment of government is $16.8 trillion dollars with the $4.6 trillion already paid out. Yes, it was trillions not billions and the banks are now larger and still too big to fail. But it isn’t just the government bailout money that tells the story of the bailout. This is a story about lies, cheating, and a multi-faceted corruption which was often criminal.’

Comment by Professor Bear
2015-07-15 09:23:25

‘The Special Inspector General for TARP summary of the bailout says that the total commitment of government is $16.8 trillion dollars with the $4.6 trillion already paid out.’

Isn’t $16.8 trillion dollars roughly equal to a year’s worth of U.S. GDP?

Comment by Professor Bear
2015-07-15 09:24:26
 
 
Comment by rj chicago
2015-07-15 11:12:59

Ben - there was a document put out some 5 years ago that showed dozens of bailouts following the crash - many none of us are fully aware of - TANF, TALF the acronyms go on and on - utterly shameless plunder.

 
 
Comment by Ben Jones
2015-07-15 07:44:21

‘Google’s stock rose more than 3% Tuesday following a Wall Street Journal story about the company’s recent spending and hiring curbs. As Google becomes more complex, it’s trying to find ways to make itself more efficient, specifically by being increasingly judicious about hiring in areas that don’t have clear business objectives.’

‘This is something analysts and investors have been barking about on recent earnings calls: As Google’s profit margins have slimmed down, they want proof that the company isn’t pouring too much money into its so-called “moonshot” projects, instead of finding ways to grow its core business.’

‘Former CFO Patrick Pichette tried to calm these fears on multiple earnings calls, referencing the company’s discipline and willingness to “throttle back” when it needs to.’

Moonshot? I wonder if some of those “scruffy tech kids” plunking down a million for a box of air might be out of a job?

Comment by redmondjp
2015-07-15 09:23:00

And what is Google’s core business, anyways . . .

Harvesting data for the NSA?

Directing you to their preferred Ebay sellers?

Burning through excess liquidity in the Tech 2.0 bubble?

Comment by Professor Bear
2015-07-15 09:28:05

“Harvesting data for the NSA?”

Same question for FB…

 
Comment by In Colorado
2015-07-15 13:24:23

And what is Google’s core business, anyways . .

I thought it was advertising, placing ads on websites … like the HBB.

 
 
 
Comment by txchick57
2015-07-15 09:55:37

PS: I made a great amount of $$$$ in 2009 - 2011 on the MERS/recording scams and had so much fun doing it. I took mortgages from homeowner attorneys and “foreclosure rescue” shops and ripped them apart, even to the securitization fraud, then wrote scripts for the attorneys to tell the judges. DFW went from being a place where you couldn’t ever get a break as a homeowner fighting foreclosure to one where you had a 75% shot if you had the right people working with you. It was a riot. They always paid too, on time.

Comment by Professor Bear
2015-07-15 10:49:35

That’s great!

ProfessorBear / GetStucco / CantankerousIntellectualBombThrower

P.S. Are you in DFW or SD?

Comment by txchick57
2015-07-15 11:30:40

Depends on what day you ask. SF some days, DFW some days, Austin… looking to retire soon. Waiting for the right moment to lay in a big market short and walk away for a year or two.

Comment by Professor Bear
2015-07-15 20:03:53

You ought to come work here:

North County Gymnastics

(Comments wont nest below this level)
 
 
 
 
Comment by Senior Housing Analyst
2015-07-15 10:47:15

Irving, TX Housing Prices Fall 15%

http://www.movoto.com/irving-tx/market-trends/

 
Comment by toast on the coast
2015-07-15 11:45:59

There were 6 people convicted of fraud along Ocean Blvd, Long Beach, Ca.
The 2 agents involved were found not guilty.

 
Comment by Ben Jones
2015-07-15 13:49:26

‘The Federal Housing Administration endorsed 102,800 loans in May, the second month in a row that endorsements passed 100,000. The elevated FHA activity suggests continued interest in the government-backed market since the federal mortgage insurer reduced its annual mortgage insurance premium by 50 basis points in late January.’

‘By contrast, the FHA endorsed just 66,300 single-family loans in January and 67,700 loans in December.’

‘The latest FHA Production Report released earlier this month also shows that the agency received a total of 686,800 loan applications in February through May compared to 346,600 in the same period last year.’

“At its present rate, FHA should endorse $190 billion of single-family loans or 50% more than projected in latest year’s audit,” said Brian Chappelle, a co-founder of Potomac Partners, in an update to clients. Meanwhile, the rate of FHA loans that are seriously delinquent fell to 6.24% in May. “It is now at the lowest level since September 2008,” Chappelle said. “Particularly encouraging is the decline in the foreclosure rate to 2.04%. That is the lowest foreclosure rate since August 2009.”

http://www.nationalmortgagenews.com/news/origination/premium-reduction-continues-to-bolster-fha-loan-production-1056105-1.html

‘The recent decline in the housing market was preceded by strong growth for over a decade. From the fourth quarter of 1995 to the fourth quarter of 2005, homeownership rates increased from 65.1 percent to 69.0 percent.1 In the 1990s and early 2000s, mortgage originations grew six-fold, from $459 billion in 1990 to $2.9 trillion in 2005. Over this same period, mortgage delinquency rates (around 4.5 percent) and foreclosure rates (around 1.2 percent) remained low between 2000 and 2005.’

http://www.bls.gov/opub/btn/volume-2/patterns-of-homeownership.htm

 
Comment by rj chicago
Comment by Ben Jones
2015-07-15 14:41:13

‘Bill Ashmore, the president of Irvine, Calif.-based Impac, revamped the company’s guidelines last week. Impac now has a product that allows borrowers to qualify based on their bank statements, assets or a combination of both. That flexibility helps qualify borrowers who might have high debt-to-income but strong cash flow.
Impac also loosened restrictions around credit. A borrower now must have a minimum of five credit lines, either open or closed, though one must have at least a $5,000 credit limit and another must have been open for at least for 24 months. Previously, a borrower had to have at least five open credit lines in order to qualify for a mortgage.’

‘Ashmore said that the lender’s guidelines were so tight that it was only closing three out of 10 loans, “when I need to close six.” The company recently bought the home loan division of Cash Call, a call center that originates loans in roughly 40 states, and Ashmore said it needed to revamp its guidelines to meet the recent surge in demand.’

“I did an analysis of all these loans that were turned down, and all of them were good loans. I said, ‘if we tweak it here and there, we can capture more good loans,’” he said. “We don’t think this increases our risk at all.”

 
 
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