[quote=carlsbadworker]Overleveraged bum-losers are actually doing great and could be the seed of the next RE bubble.
Bruce Norris recently told a story happening in Moreno Valley, a person owed $250K on a 2-bedroom house. It went for $57K to one of the Norris Group’s investors, and the owner was given $25,000 to agree to the transaction. After closing costs, the lender netted $23 grand. But the owner who was current on the payment had $25 grand and was able to go buy another house right away since he was just given the money.
And then Bruce gave an example of someone who bought a house back in February for $205,000. This same house has already gone up to $285,000. When they tell this story to their friends who did not receive an $80 grand increase for anything and they began thinking they need to buy something, eventually that’s how the CA RE cycle runs. It almost never stays in a fair value because you will get people migrate into the state when the RE price is rising rather than the other way around. As a rational person, I cannot understand this but that’s how the process goes.[/quote]
The MO of the “Norris Group” sounds “strangely similar” to the one a (well-connected) Chula Vista family used last year, which I described here:
These “enterprising homedebtors” managed to successfully strip ~400K of debt (incl late chgs) from their (prime) property and “squat” for 28 mos by getting a RE agent (relative) to “find” a “straw buyer” (other relative, lol) to purchase their property deeply short and then “rent” it back to them.
And they never even had to move or file for BK!
The ongoing “lender malaise” we have been seeing in the last 5+ yrs is fueled by GOV payments to them for sitting on their hands. This IS the cause of all the SS fraud being perpetuated on taxpayers and surrounding homeowners, IMO. And the fact that many of these lenders and 2nd TD “investors” are located out-of-state makes it easy for local agents and their “sellers” to perpetrate these kinds of fraud undetected.
