The problem with blatantly committing fraud even if you initially pull it off is actually qualifying for the bailout, particularly in California.
Everything I read about Paulson’s plan and now this FDIC pre-re-negotiated loan terms basically makes them sound like window dressing.
For the Paulson plan a lender has to agree to lose 10% off of today’s price of your home. Under the IndyMAC FDIC plan you have to prove you qualified for the loan in the first place.
I know a guy who worked at IndyMAC and a conversation with a potential borrower would go like this:
IndyMAC broker: What’s your income?
Alt-A borrower: Uh, around $50k
IndyMAC broker: Yeah, can you get that a little higher?
Alt-A borrower: Well, I guess I could say $100k
IndyMAC broker: Yeah, how about 200k?
Alt-A borrower: Uh, well, yeah, I guess.
I sure hope it puts more downard pressure, because I’m only seeing high teen price drops where I’m looking.
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