Kelly and Will over at voiceofsandiego.org broke the story yesterday on a huge condo scam involving overpaying for condos with loans made to straw buyers.
What’s interesting is that this all happened in the midst of the bust in mid-2008, after lending had tightened up. The scammers even paid 20% down — but the prices were inflated by so much (sometimes more than 100%) that the 20% down was easily recouped.
What’s also interesting is that the straw buyers willingly lent their identities to this guy:
This is just an investigation by some journalists — no law enforcement agencies were involved (yet, anyway). I wonder how much of this kind of stuff has been going on out there?
You can read the whole piece here.
There is a lot more straw
There is a lot more straw sales going on than people are aware. I just happen to know about 13104 Chambord. It was bought December 2006 for 850k. Then flipped a little less than 3 months later to girlfriend in February 2007 for 950k. They squatted for free until August 2008 when it was finally foreclosed upon.
It is surprising that the fraud continues. But then again, I see NODs on loans taken as late as last summer. By then, you’d think the banks would tighten the reigns and watch who they lend to.
I think you’d all be
I think you’d all be surprised at how much thinking there is at the top of the financial services industry, and the Congress, White House, and Treasury, to the effect that house prices should and can be rescued from going down by a lot for a long time.
When house prices first started to totter in summer of 2007, Ken Lewis and Tim Geithner and Ben Bernanke and others knew that a crash could occur, and would be catastrophic to many large financial institutions. I don’t know exactly how explicit the agreement was, but it’s pretty clear that there was an understanding that they would all hang together, or hang separately. When securitization money dried up, the FHLB system was tapped to supply unlimited amounts for the mortgage market. That gave time for the Fed to gear up. Then Treasury kicked in. BoA and others kept the loans flowing to retail customers, and did what they could through mergers (Countrywide and Merrill).
The fact that only fraud could maintain “market” prices high enough to justify the amount of loans on individual properties was pretty much lost on these folks, for various reasons. Private bankers are happy to have a system that continues to allow very large loans, as long as the govt picks up the pieces in the event of non-repayment. (Think of WFC’s 1Q09 ‘earnings’ announcement.) I think the unspoken understanding was that the govt would do everything they could for the big boys that played ball.
Government officials are motivated in different ways. Congress and the WH want to keep the rabble happy, and the rabble want high home prices. Professional economists all read and revere Keynes, and tend to think that immediately higher GDP measures are always a better outcome. Hence almost all economists say population growth is good, and day care is better than mothers staying home, and getting people to give up dead-end careers now to get going in a new career that might not pay off fully for another 10 years is bad.
All of which is just to say that you shouldn’t be surprised at the amazing tolerance for fraud that elevates house prices amongst the people who should care the most.
I am consistently astounded
I am consistently astounded by how poor the local msm is with regard to investigating local issues.
I am very impressed with Voice in general as well as Kelly in particular.
I am not trying to kiss ass here.
She is just doing what all the journalists here in town should be doing all the time.
The difference is that she actually does it.
Her investigative articles consistently read like something out of the times or the journal and those of the UT consistently sound like they just read hers and made a few phone calls.
I should add that I generally am not this negative on msm but this disparity is rather striking.
Fools.
Fools.
This can’t be true: He shows
This can’t be true: He shows up with a fu-manchu, ponytail, boots, jeans, and a casual shirt and his name is …. Mc CON ville??
Who’s casting our villains, Disney?
All I can say is that if an
All I can say is that if an “Animal Portraitist” who’s been out of work for 3 years prior and is currently in debt to her eyeballs can get multiple mortgages then we still have MASSIVE problems in lending. Lending standards and practices have not truly tightened and any mortgage company that takes part in it deserves to go down. At least that small part of the risk and cost won’t be bore by the taxpayer.
As for all who got duped in 2008 they deserve it for trying to get the easy money when again and again we find that there is no easy money and you need to work to earn in life. People at the ages of those listed should know better. They screwed themselves and even worse they screwed everyone around them to try to make a quick buck. Screw them!
I presume Mr McConville’s
I presume Mr McConville’s true identity is being withheld for legal reasons 🙂
Gees. Doing my daily
Gees. Doing my daily checking. Just for the heck of it, thought I’d check D/T. This one is a doozie.
430 17th streetSold 11/2004 for 860k! Bwahahaha.
Previous sale was 03/06/1996 $122k.
Yeah. I’m thinking a totally legit transaction.
Wanna see what this gem looks like? It’s for sale. Now bank owned (surprise, huh?)