FBI Overwhelmed With Mortgage Fraud
The evidence has been mounting that much of the price increases in homes has been an illusion, if not outright fraud. Houston Chronicle, "The FBI won't disclose specifics about the number of Houston area cases under investigation, but Tribble says: "There aren't enough people to work the fraud. That's how big it is."
If somone paid too much for a property, appreciation will not take up the slack. "Some acts of fraud involve misrepresenting a borrower's credit history or income in order to qualify for a hefty mortgage loan. The weight of that debt means they often end up defaulting."
One of the hallmarks of the S&L collapse was flipping and false appraisals.
9 Comments:
What's worse for housing... A recession or inflation? It seems like we're teetering on the edge at the moment.
How about stagflation? We had that during the '70s...inflation plus a stagnant growth rate. The worst of both worlds.
("I must be checking this site 10 times a day.")
It is indeed quite addicting. It has become our home page.
These guys are our support group. When my wife and I feel like we renting may not be for us, we usually find an interesting article reinforcing the fact that it is only a MATTER OF TIME before things turn around.
We made a nice profit from our previous two homes and are not about to jump back in the market until the frenzy dies out and prices retreat at least by 20% in the maket we want live in.
Ben,
There is just no better housing blog around. Kudos to you buddy!!!
Best poster nominations go to
John Law and BKlawyer.
I agree Ben, your blog is great!
By the way, has anybody noticed how the Nikkei is down over 3%? It will be interesting to see what happens on Wall Street tomorrow.
Thanks guys,
I went down to the brewery for a few. I am ready for what should be a busy week.
I agree about John and BKLawyer, they are a huge help.
Anon,
Did you hear the Mexican stocks are off 12% this month?
(people needed to sell stocks to make the mortgage)
Excellent point, on Black Monday gold dropped $10 an ounce as people had to cover their stock losses. We could see stocks being sold to pay mortgages.
It's funny to remember, but gold moving $10 in a day was unusual then and the Nasdaq rarely moved but a few points at a time.
How about stagflation? We had that during the '70s...inflation plus a stagnant growth rate. The worst of both worlds.
How about stagdeinflation. Stagnant Growth, Oil driven Inflation, High Interest Rates, and Housing Bubble deflation
The next Ben Laden works in real estate appraisal business. It's less messy and bloody. It will have even farther consequences on the real estate market. It's like a new kind of terrorism, but this time it's just done for bucks and not Allah.
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