After reading all the articles on Ben’s blog, it’s becoming apparent to me that real estate fraud was prevalent during the boom. Here are some that I can think of. Of course a rising market will hide all of that.
1. Liar loans.
2. Cash back and flip.
3. Primary residence fraud.
4. Appraisal fraud.
What will the downturn bring?
1. Fake short sales.
2. Cash back and default.
3. Appraisal fraud.
4. MLS manipulation.
Can you think of anything else the Real Estate Industrial Complex will come up with?
“Silicon Valley gossip rag Valleywag is carrying a story about Second Life being a new spin on the old pyramid scheme. The article, which consists mostly of selections from the report of financial consultant Randolph Harrison, suggests that not only are most people deceived about the amount of money they can make in Second Life, but also about how easily they can withdraw it. It says ‘Like the paid promotion infomercials that run on CNBC, sadly SecondLife is a giant magnet for the desperate, uninformed, easily victimized. Its promises of wealth readily ensnare those who can least afford to lose their money or lives to such scam in exactly the same way that real estate investor seminars convince divorcees with low FICO scores to buy houses sight unseen with no money down.'”
“Of course a rising market will hide all of that.”
I take it you are referring to the formerly rising market that did hide all of that, and not one to come.
I’m curious. I hear about the selling of securities by mortgage companies, to holding companies, and investment insurances and all that stuff the lenders do to minimize or eliminate their risk in these liberal lending practices.
How that will all play out? I can’t imagine it benefits the home owner, but what will the effects be as the market continues to tank?
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