Phony Sham Mortgages Fueled Housing Bubble (loan, real estate, finance, loan)

[Mike from back east]

Amazing stories of corruption. Massive scale. Thousands of nice professionals are involved and guilty of scams. All over the country. That's the gist of the today's excellent piece in the Washington Post, see:
http://www.washingtonpost.com/wp-dyn...l?hpid=topnews

I suspect WE will be left holding the bag, via Fannie Mae and Freddie Mac and corporate bankruptcies.

Millions of honest homebuyers who bought homes at bubble-inflated prices are already holding the bag.

Woven through the story is an undercurrent of lax regulation and oversight, at both the state and Federal level of government. Not to mention a lending industry that needs to have its ass kicked all the way into a jail cell.

History repeats. It's only been 16 years since G.H.W.Bush (whom I voted for twice and admired) had his only financial scandal, the S&L crisis and the Resolution Trust Corporation. G.W.Bush now has his own financial crisis.

As usual, in America, the guilty will walk off with their millions, we will hold the bag. Our "leaders" will promise 'never again.'

Yeah, right.

[Sgoldie]

This article is disgusting!

When I first started in real estate almost 40 years ago most brokers/appraisers/bankers were seasoned professionals with unwavering ethics, and most were over 60yrs old. They had seen every sort of ups and downs and took their position of fiduciaries seriously. They were conservative and would die before they would put anyone in jeopardy for any reason. Most business was done on a handshake and anyone who didn't uphold these high standards was known, and basically run out of business if not out of town.

Jail is right for the snake oil dealers but I blame the media too. Perception is everything and when people hear that they can make out like bandits instead of running away, they run foward with all reckless speed.

[recycled]

The WP article was pretty good, thanks for posting the link. There's been lots of articles like that in the local press here in Orange County, CA. All kinds of those one time "paper tigers" in the shady mortgage biz around here. One of the biggies, Ameriquest has dumped several thousand employees and pretty much shut down.
It was pretty clear to me a couple of years ago that this whole mortgage broker boom was built on a house of cards. In 2005 I read a local front page article about a 24 year old "mortgage broker" who graduated less than 2 years earlier from a local state college (BA in history). He was interviewed as a buyer for a $1.5 million high rise luxury condo in Irvine, CA. Reading this article was enough to give me a headache, what is this kid doing to get all those commissions to be able to walk in and buy a $1.5 M condo? What kind of idiot finance company would give him a loan of that amount? A history major as a big time loan broker at age 24? Well now we know for sure this was part of the biggest fraud so far of the 21st century.