[Ex-SD]

This is one of those suits where the builder may lose. It could go either way. The plaintiff is suing because the builder is substantially and intentionally changing the value of the homes in the neighborhood by building much smaller & cheaper homes………………….not selling the same home that the plaintiff bought for a cheaper price.
It will be interesting to see who prevails.

[Ex-SD]

This is one of those suits where the builder may lose. It could go either way. The plaintiff is suing because the builder is substantially and intentionally changing the value of the homes in the neighborhood by building much smaller & cheaper homes………………….not selling the same home that the plaintiff bought for a cheaper price.
It will be interesting to see who prevails.

[Ex-SD]

This is one of those suits where the builder may lose. It could go either way. The plaintiff is suing because the builder is substantially and intentionally changing the value of the homes in the neighborhood by building much smaller & cheaper homes………………….not selling the same home that the plaintiff bought for a cheaper price.
It will be interesting to see who prevails.

[Ex-SD]

This is one of those suits where the builder may lose. It could go either way. The plaintiff is suing because the builder is substantially and intentionally changing the value of the homes in the neighborhood by building much smaller & cheaper homes………………….not selling the same home that the plaintiff bought for a cheaper price.
It will be interesting to see who prevails.

[Ex-SD]

This is one of those suits where the builder may lose. It could go either way. The plaintiff is suing because the builder is substantially and intentionally changing the value of the homes in the neighborhood by building much smaller & cheaper homes………………….not selling the same home that the plaintiff bought for a cheaper price.
It will be interesting to see who prevails.

[Ex-SD]

HLS: I remember you saying that several times…………………..and you were right on the money. JWM has also been a consistent voice that is often criticized when he tells people the news that they don’t want to hear. Too many people want to stick their head in the sand and pretend that whomever tells them the bad news is full of it when they hear the truth about housing & mortgage rates so they dismiss the messenger as a kook or the boy who cried wolf.

I never thought that raising the limits would make much of a difference because the fundamental problem of qualifying, down payments and affordability were going to continue to be too large an obstacle at the present, CA prices. I don’t believe that the government will be able to do anything that is going to make any appreciable difference to halt the ongoing and future price corrections that will eat away at housing prices in the bubble markets for at least 3-4 more years. (at a minimum)

[Ex-SD]

HLS: I remember you saying that several times…………………..and you were right on the money. JWM has also been a consistent voice that is often criticized when he tells people the news that they don’t want to hear. Too many people want to stick their head in the sand and pretend that whomever tells them the bad news is full of it when they hear the truth about housing & mortgage rates so they dismiss the messenger as a kook or the boy who cried wolf.

I never thought that raising the limits would make much of a difference because the fundamental problem of qualifying, down payments and affordability were going to continue to be too large an obstacle at the present, CA prices. I don’t believe that the government will be able to do anything that is going to make any appreciable difference to halt the ongoing and future price corrections that will eat away at housing prices in the bubble markets for at least 3-4 more years. (at a minimum)

[Ex-SD]

HLS: I remember you saying that several times…………………..and you were right on the money. JWM has also been a consistent voice that is often criticized when he tells people the news that they don’t want to hear. Too many people want to stick their head in the sand and pretend that whomever tells them the bad news is full of it when they hear the truth about housing & mortgage rates so they dismiss the messenger as a kook or the boy who cried wolf.

I never thought that raising the limits would make much of a difference because the fundamental problem of qualifying, down payments and affordability were going to continue to be too large an obstacle at the present, CA prices. I don’t believe that the government will be able to do anything that is going to make any appreciable difference to halt the ongoing and future price corrections that will eat away at housing prices in the bubble markets for at least 3-4 more years. (at a minimum)

[Ex-SD]

HLS: I remember you saying that several times…………………..and you were right on the money. JWM has also been a consistent voice that is often criticized when he tells people the news that they don’t want to hear. Too many people want to stick their head in the sand and pretend that whomever tells them the bad news is full of it when they hear the truth about housing & mortgage rates so they dismiss the messenger as a kook or the boy who cried wolf.

I never thought that raising the limits would make much of a difference because the fundamental problem of qualifying, down payments and affordability were going to continue to be too large an obstacle at the present, CA prices. I don’t believe that the government will be able to do anything that is going to make any appreciable difference to halt the ongoing and future price corrections that will eat away at housing prices in the bubble markets for at least 3-4 more years. (at a minimum)

[Ex-SD]

HLS: I remember you saying that several times…………………..and you were right on the money. JWM has also been a consistent voice that is often criticized when he tells people the news that they don’t want to hear. Too many people want to stick their head in the sand and pretend that whomever tells them the bad news is full of it when they hear the truth about housing & mortgage rates so they dismiss the messenger as a kook or the boy who cried wolf.

I never thought that raising the limits would make much of a difference because the fundamental problem of qualifying, down payments and affordability were going to continue to be too large an obstacle at the present, CA prices. I don’t believe that the government will be able to do anything that is going to make any appreciable difference to halt the ongoing and future price corrections that will eat away at housing prices in the bubble markets for at least 3-4 more years. (at a minimum)

[Ex-SD]

The story continues in the L.A. Times:
by Peter Viles

Yesterday’s post about the possible loss of $6 trillion in housing wealth brought me a small flood of e-mail. One of the most provocative notes came from an old friend in suburban Phoenix who poses the question: How much of that $6-trillion bubble was created by outright fraud?

He writes, “I haven’t seen articles surrounding the common fraudulent scheme where mortgage brokers worked with a home appraiser to overvalue homes, then direct owner to sell home to a pre-identified buyer at hundreds of thousands over market value with large kick-back from seller to buyer at closing.

“This happened with great frequency in my former neighborhood just north of Phoenix. In fact, three homes out of six homes on my former street are in foreclosure due to this scheme. An example: I sold my house in Dec. of 06 for $815K (legitimate sale and value at the time at height of price boom). Five months later the same house sold for $1.2 million. The people who bought it from me sold it to an “investor” at the $1.2MM price.

“We bought from builder in ’03 for $493K then sold in Dec. ’06 for $815K. My buyers never moved in but did remove expensive window coverings, outside landscaping fountain and custom-made iron entrance gate then did the kick-back sale scheme for $1.2MM. Their buyer never moved in either.

“The house is now in foreclosure but was recently listed (while in foreclosure) for $534K. It is now set to go to auction. What I wonder is, do the banks who hold the mortgages know the last buyer received the kick-back? Are they going after the money and prosecuting? This happened all over our community. The buyers would never even move in to the properties. They’ve been sitting empty for a year and a half with no landscaping and other maintenance being done on these upscale, gated golf community homes. Much of the sky-high valuations in the Phoenix and Scottsdale areas were an illusion as this scheme was rampant.”

“What angers me most is that innocent buyers in the neighborhood would have been shown these phony sales as ‘comparables’ by their Realtor and may have overpaid for a home in a legitimate sale but have now lost a great deal of value as these ‘comps’ weren’t real. I would imagine it took place in California and Nevada as well.”

Fascinating note — and frustrating, too. I’ve seen no evidence that prosecutors are going after this kind of fraud in any meaningful, systematic way.

[Ex-SD]

The story continues in the L.A. Times:
by Peter Viles

Yesterday’s post about the possible loss of $6 trillion in housing wealth brought me a small flood of e-mail. One of the most provocative notes came from an old friend in suburban Phoenix who poses the question: How much of that $6-trillion bubble was created by outright fraud?

He writes, “I haven’t seen articles surrounding the common fraudulent scheme where mortgage brokers worked with a home appraiser to overvalue homes, then direct owner to sell home to a pre-identified buyer at hundreds of thousands over market value with large kick-back from seller to buyer at closing.

“This happened with great frequency in my former neighborhood just north of Phoenix. In fact, three homes out of six homes on my former street are in foreclosure due to this scheme. An example: I sold my house in Dec. of 06 for $815K (legitimate sale and value at the time at height of price boom). Five months later the same house sold for $1.2 million. The people who bought it from me sold it to an “investor” at the $1.2MM price.

“We bought from builder in ’03 for $493K then sold in Dec. ’06 for $815K. My buyers never moved in but did remove expensive window coverings, outside landscaping fountain and custom-made iron entrance gate then did the kick-back sale scheme for $1.2MM. Their buyer never moved in either.

“The house is now in foreclosure but was recently listed (while in foreclosure) for $534K. It is now set to go to auction. What I wonder is, do the banks who hold the mortgages know the last buyer received the kick-back? Are they going after the money and prosecuting? This happened all over our community. The buyers would never even move in to the properties. They’ve been sitting empty for a year and a half with no landscaping and other maintenance being done on these upscale, gated golf community homes. Much of the sky-high valuations in the Phoenix and Scottsdale areas were an illusion as this scheme was rampant.”

“What angers me most is that innocent buyers in the neighborhood would have been shown these phony sales as ‘comparables’ by their Realtor and may have overpaid for a home in a legitimate sale but have now lost a great deal of value as these ‘comps’ weren’t real. I would imagine it took place in California and Nevada as well.”

Fascinating note — and frustrating, too. I’ve seen no evidence that prosecutors are going after this kind of fraud in any meaningful, systematic way.

[Ex-SD]

The story continues in the L.A. Times:
by Peter Viles

Yesterday’s post about the possible loss of $6 trillion in housing wealth brought me a small flood of e-mail. One of the most provocative notes came from an old friend in suburban Phoenix who poses the question: How much of that $6-trillion bubble was created by outright fraud?

He writes, “I haven’t seen articles surrounding the common fraudulent scheme where mortgage brokers worked with a home appraiser to overvalue homes, then direct owner to sell home to a pre-identified buyer at hundreds of thousands over market value with large kick-back from seller to buyer at closing.

“This happened with great frequency in my former neighborhood just north of Phoenix. In fact, three homes out of six homes on my former street are in foreclosure due to this scheme. An example: I sold my house in Dec. of 06 for $815K (legitimate sale and value at the time at height of price boom). Five months later the same house sold for $1.2 million. The people who bought it from me sold it to an “investor” at the $1.2MM price.

“We bought from builder in ’03 for $493K then sold in Dec. ’06 for $815K. My buyers never moved in but did remove expensive window coverings, outside landscaping fountain and custom-made iron entrance gate then did the kick-back sale scheme for $1.2MM. Their buyer never moved in either.

“The house is now in foreclosure but was recently listed (while in foreclosure) for $534K. It is now set to go to auction. What I wonder is, do the banks who hold the mortgages know the last buyer received the kick-back? Are they going after the money and prosecuting? This happened all over our community. The buyers would never even move in to the properties. They’ve been sitting empty for a year and a half with no landscaping and other maintenance being done on these upscale, gated golf community homes. Much of the sky-high valuations in the Phoenix and Scottsdale areas were an illusion as this scheme was rampant.”

“What angers me most is that innocent buyers in the neighborhood would have been shown these phony sales as ‘comparables’ by their Realtor and may have overpaid for a home in a legitimate sale but have now lost a great deal of value as these ‘comps’ weren’t real. I would imagine it took place in California and Nevada as well.”

Fascinating note — and frustrating, too. I’ve seen no evidence that prosecutors are going after this kind of fraud in any meaningful, systematic way.

[Ex-SD]

The story continues in the L.A. Times:
by Peter Viles

Yesterday’s post about the possible loss of $6 trillion in housing wealth brought me a small flood of e-mail. One of the most provocative notes came from an old friend in suburban Phoenix who poses the question: How much of that $6-trillion bubble was created by outright fraud?

He writes, “I haven’t seen articles surrounding the common fraudulent scheme where mortgage brokers worked with a home appraiser to overvalue homes, then direct owner to sell home to a pre-identified buyer at hundreds of thousands over market value with large kick-back from seller to buyer at closing.

“This happened with great frequency in my former neighborhood just north of Phoenix. In fact, three homes out of six homes on my former street are in foreclosure due to this scheme. An example: I sold my house in Dec. of 06 for $815K (legitimate sale and value at the time at height of price boom). Five months later the same house sold for $1.2 million. The people who bought it from me sold it to an “investor” at the $1.2MM price.

“We bought from builder in ’03 for $493K then sold in Dec. ’06 for $815K. My buyers never moved in but did remove expensive window coverings, outside landscaping fountain and custom-made iron entrance gate then did the kick-back sale scheme for $1.2MM. Their buyer never moved in either.

“The house is now in foreclosure but was recently listed (while in foreclosure) for $534K. It is now set to go to auction. What I wonder is, do the banks who hold the mortgages know the last buyer received the kick-back? Are they going after the money and prosecuting? This happened all over our community. The buyers would never even move in to the properties. They’ve been sitting empty for a year and a half with no landscaping and other maintenance being done on these upscale, gated golf community homes. Much of the sky-high valuations in the Phoenix and Scottsdale areas were an illusion as this scheme was rampant.”

“What angers me most is that innocent buyers in the neighborhood would have been shown these phony sales as ‘comparables’ by their Realtor and may have overpaid for a home in a legitimate sale but have now lost a great deal of value as these ‘comps’ weren’t real. I would imagine it took place in California and Nevada as well.”

Fascinating note — and frustrating, too. I’ve seen no evidence that prosecutors are going after this kind of fraud in any meaningful, systematic way.

[Ex-SD]

The story continues in the L.A. Times:
by Peter Viles

Yesterday’s post about the possible loss of $6 trillion in housing wealth brought me a small flood of e-mail. One of the most provocative notes came from an old friend in suburban Phoenix who poses the question: How much of that $6-trillion bubble was created by outright fraud?

He writes, “I haven’t seen articles surrounding the common fraudulent scheme where mortgage brokers worked with a home appraiser to overvalue homes, then direct owner to sell home to a pre-identified buyer at hundreds of thousands over market value with large kick-back from seller to buyer at closing.

“This happened with great frequency in my former neighborhood just north of Phoenix. In fact, three homes out of six homes on my former street are in foreclosure due to this scheme. An example: I sold my house in Dec. of 06 for $815K (legitimate sale and value at the time at height of price boom). Five months later the same house sold for $1.2 million. The people who bought it from me sold it to an “investor” at the $1.2MM price.

“We bought from builder in ’03 for $493K then sold in Dec. ’06 for $815K. My buyers never moved in but did remove expensive window coverings, outside landscaping fountain and custom-made iron entrance gate then did the kick-back sale scheme for $1.2MM. Their buyer never moved in either.

“The house is now in foreclosure but was recently listed (while in foreclosure) for $534K. It is now set to go to auction. What I wonder is, do the banks who hold the mortgages know the last buyer received the kick-back? Are they going after the money and prosecuting? This happened all over our community. The buyers would never even move in to the properties. They’ve been sitting empty for a year and a half with no landscaping and other maintenance being done on these upscale, gated golf community homes. Much of the sky-high valuations in the Phoenix and Scottsdale areas were an illusion as this scheme was rampant.”

“What angers me most is that innocent buyers in the neighborhood would have been shown these phony sales as ‘comparables’ by their Realtor and may have overpaid for a home in a legitimate sale but have now lost a great deal of value as these ‘comps’ weren’t real. I would imagine it took place in California and Nevada as well.”

Fascinating note — and frustrating, too. I’ve seen no evidence that prosecutors are going after this kind of fraud in any meaningful, systematic way.

[Author]

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