September 29, 2006

Iamfacingforeclosure.com kid's new defense: Everybody is doing it - just ask your mortgage broker!


His blog is the gift that keeps on giving and a great read. Casey, if you're reading this, keep on blogging. Your mindframe as you secured your $2.2 Million in liars loans, and how you got to the point you're at today, is continually fascinating, and is the perfect color commentary to fill in the housing bubble story.

Here's the latest. He also talks about HP'ers being hard on him in the full post

How "Illegal" is it REALLY?

When I mentioned the way I did my loans, I didn't think much of it. I was just being open and honest and shared everything I did - hoping it will help somebody. Yes, on these loans I was technically misrepresenting things like income, cash at closing and owner-occupied issue.

But if you know anything about the state of today's lending industry you will agree that what I did is nothing out of the ordinary.

For more information, see this News Article on Liar Loans or just watch the Liar Loan video. (Now compare to this Wall Street Journal article on the Real Mortgage Fraud). While personally I have always had MORAL issues with these loans, the reality is that Liar Loans are pretty normal.

Consider this:

* Everybody is doing it - just ask your mortgage broker!
* Lenders/banks allow it and turn a 'blind eye' to it.
* The account executives at the banks actually tell the mortgage brokers how to 'sugar coat' the application.
* Lenders make a killing on EXTRA INTEREST and fees for stated income loans - you pay to lie.


Lenders package their loans and sell to mutual funds on wall street. The extra default rate on LIAR LOANS has been pre-calculated. The extra risk is accounted-for in most cases.
For those who are still judging me, I will just say this:

How many of YOU have 'stolen' a music CD or software program by burning a copy of it? Did you NOT know that it's ILLEGAL?

42 comments:

LARenter said...

Check out this LA Time article concerning mortgage fraud.

http://www.latimes.com/business/la-fi-loanfraud29sep29,0,847606,full.story?coll=la-home-headlines

The reality of this thing is just about to get exposed big time!

Butch said...

This kid will be the poster boy for the housing bubble when the history is written.

(Although, I must admit that I have a nagging sense that he is no for real--kinda like that Myspace.com chick from a few weeks ago.)

In any event, trust me when I state that there are, literally, MILLIONS of similar stories to his out there in housing bubble land. As the defaults explode, you will see every cockroach and his brother flushed out.

No one, in or out of real estate, will be spared the enormous pain and suffering as the fallout rips through the banking system, mortgage system, mutual funds, money market funds, hedge funds, derivatives, real estate industry, home improvement industry, furniture industries and other sectors too numerous to count.

So, while we HPers are enjyoying our schadenfreude now, consider your circumstance similar to that of the first-class passengers on the Titanic. Yes, you are watching the steerage passengers drown and freeze to death, but your time is coming soon.

Anonymous said...

Hey, where the Hell is borka?

He usually has some half-ass view point about everything!!!!!

Anonymous said...

"How many of YOU have 'stolen' a music CD or software program by burning a copy of it? Did you NOT know that it's ILLEGAL?"

I remember WAYYY back when I bought a Police CD for 16.99 (which was a ton back then) and I said screw this and bought a PC that I could download and burn cd's from. So for the past 8 years I am a criminal. Oh well.

Anonymous said...

ummm, I emailed the kid and told him that he would either decide to repent and live legally or join the rest of us and commit crime.

why do we have cheap clothes? Sweatshop labor. Why do we have so many things? Pollution. Why do CEO's get rich? They bilk the stock market.

Certainly, that kid is finding out what the real world is like.

Anonymous said...

wonder if "everyone else was doing it" will play with the judge?

LauraVella said...

Yeah, well a silly little CD is not a loan application. Geesh, use a better example...

keith said...

steal britney spears "baby one more time"

steal $2.2 Million of China's money

You pick

Anonymous said...

Casey-

Did Your parents ever tell you the analogy. "If everyone was jumping off a bridge would you" Or "You don't have to be like everyone" "Casey you are different"

Anonymous said...

I've met Casey before. He is real. His story is real.

I wish he was making it up, but he is not.

Anonymous said...

the kid is looking increasingly fake

maybe he's just tired

keith said...

the kid is real folks. real as it gets.

LauraVella said...

Keith said: steal britney spears "baby one more time"

steal $2.2 Million of China's money

You pick"

This country needs to "insource" jobs...they were "ours" before they were "theirs".


I could care less about BS, oh I mean Britney...

Anonymous said...

What the heck does "schadenfreude" mean?

Anonymous said...

http://en.wikipedia.org/wiki/Schadenfreude

Alan P. said...

I want to go out to CA and get me some of that cash back liar loan money. I sure could go for some. Somebody please give me one good reason why I shouldn't.

tabasco jenkins said...

Mort, do it. Everybody else is!

beebs said...

"Everyone is doing it...."
didn't work at Nurenburg.

Alan P. said...

It will work this time! There are more crooks than non-crooks in this country now. From the president down to the waiter and shoe shine boy, all are corrupt. No way any of these people will ever get into trouble. Too many fish to fry, fish don't fry fish.

Salt Lake Mortgage Guy said...

While there are a lot of Casey's out there, bigger problems than him lie ahead. At least he didn't intend harm. Check out this guy who's still trying to cash in on borrower's ignorance.

Patch Tuesday said...

Has anyone else noticed how many of these fraud stories that Countrywide is being named as the mortgage holder? And this stuff coming out is probably only the tip of the iceberg...

Vanessa said...

I agree Liar loans were occuring, but in the end who will get caught and who's life will it affect more? Subconsciously, one knows they are not doing the right thing, but its clouded by the pleasure principle of greed. Its your classic group psychology case, if He did and made money than its ok...group followers will be accountable for their own souls.

Anonymous said...

I love the logic:

People infringe copyright all the time, therefore it is okay to commit mortgage fraud (or other white collar crime).

Good, I'm glad that's settled. I've noticed a lot of people break the speed limit, so I'm going out to make a bundle dealing crack cocaine and no-one has the right to judge me.

And when it all goes wrong, I'll expect tea and sympathy mind you!

dan said...

Good LA Times op/ed piece today titled
"Housing Party Collapses"

Anonymous said...

This dickhead wants us to feel sorry for him.

No asshole, you're just a common thief, a fraudster, and a liar.

If everyone was doing it, does that make it OK? No, that makes you all common thieves, fraudsters, and liars, and in my opinion, the scum of the earth. No wonder people hate people from California.

Anonymous said...

Yes, yes the old:

"Everyone is guilty so no one is to blame" mentality.

a.creampuff said...

But is he a conservative Republican or a liberal Democrat? Surely all cheaters are one or the other, and political affiliation explains all our nation's woes. If only everyone thought and voted like me, none of this would happen!

a.creampuff said...

Period.

a.creampuff said...

But seriously folks - there are enough copyright-free, legal downloads of music, some awful, some great, that you could fill an 80 gig hard drive and spend all your free time sorting through. If you are still hung up on getting some song by a "star", you might want to take a moment and do some web browsing. In any case, I've never downloaded a single illegal file, but have tons of mp3s that the artists want to share with the world. I also decided not to purchase a house when everything got crazy, and took affront at the easy-money Ponzi schemers I've met, knowing their get-rich-quick profits were pricing regular people out of the market, or at least making a lot of folks house-poor (and that some would get stuck holding the bag). No, everyone is not doing it.

Anonymous said...

I didn't do it kid.

Anonymous said...

If he had kept his mouth shut, he could have either

1) gotten away with it

2) turned state's evidence (against the mortgage brokers) when he got caught.

Now, everybody knows who he is and he can't be in a sting.

Anonymous said...

your CD analogy...are you serious? that's the best rationalization you can come up with? wow, kinda sad. here is one main difference...if i make a copy of a cd or get one from a friend...the difference is i would have never purchased the cd anyway, and further, it will collect dust in my closet for years to come. the other replies state the obvious. so yea, if you had NOT purchased those 5 homes or what not, someone else would have; whether they use liar loans too, as you suggest every house purchased in the boom has, that is utterly false.
i guess your reasoning is typical for your age..but everyone else did it. i ask you to open your eyes outside of your zip code..i mean really if everyone else did it, should everyone else also have a website devoted to it? let me know those other sites from all those folks. nope, you are the only one (so far).
i live in a very bubblicious area as well, northern VA, i dont know of any coworkers who bought in the past 4 years using a liar loan. nope they just bought tiny 1 br condos with astonomical condo fees, while claiming 10 dependencies or so, and using arm's accounting for their 'given' COL raise each january, and thinking they will sell within 2 yrs. so yes these folks are screwed but they didnt break the law.

Anonymous said...

Has anyone else noticed how many of these fraud stories that Countrywide is being named as the mortgage holder? And this stuff coming out is probably only the tip of the iceberg...
+++++++++++++++++

Yeah, I noticed that. And I'm wondering just how much Fannie Mae is involved. Just how many accounting "irregularities" WERE found in their records two years ago?

Salt Lake Mortgage Guy said...

An Open Letter to Casey Serin and Others Like Him

Dear Casey and Other Overextended Homeowners,

I've been thinking about your situation since you posted it on your blog a few weeks ago. Having been in a bad financial mess myself and being currently employed in the mortgage industry, I thought I might be able to offer some good advice regarding your predicament.

For people who are unfamiliar with your story Casey, let me recap briefly. 24-year-old Casey quit his job to become a real estate investor earlier this year. He bought eight homes in 4 states some new, some needing repair. He sold two of them, but then ran into trouble...the bank stopped loaning him money. You see, he structured each purchase to include cash back at closing. Casey used this cash to repair properties and pay his mortgages totaling $2.2 million. He also ran up $140k in credit card bills traveling and making home improvements. Now he is unable to make his payments and is falling into foreclosure.

Casey, you've said you don't want to declare bankruptcy. Based on your age, education and ability to get a good job, bankruptcy is your best option. I'm not an attorney, so please consult one if you're looking at filing. If you're adamant about not filing, I completely understand. So let's take a look at some steps to try and get you out of this mess.

1. Get a job. You need income to get out of this mess. In one post you made, you said you had an offer. Take it! Take two if you need to. One difference this housing cycle has compared to other down cycles is unemployment is at historic lows. Take advantage of that and secure some income.

2. Move into one of the homes. I don't know whether I read it on your blog, or another one that you aren't even living in any of the houses. Move into one. It will buy you more time from the bank because they have difficulty evicting. If you end up taking out bankruptcy, you may be able to save at least your primary residence. Pick the one you think will appreciate most or has the lowest monthly payment.

3. Talk to your lenders, not the mortgage broker, and see if they will structure forbearance for you. This will wipe out your past due amounts and bring you current. You may not stay current, but it will remove some stress for a little while. The bank doesn't want to foreclose on you. They are in the business of lending money, not selling repossessed houses. They do the first job very well and the second job very poorly and they know it. They will work with you. Once you've secured a job and obtained a forbearance, make the payments on the house you live in. You've just saved one house from foreclosure. This can now be your base of operations and in the future, the collateral to continue your real estate investing.

4. Rent out your remaining homes. The market is soft right now for sales, but the best it's been for a while for rentals. For now, it doesn't matter if your rents don't cover your mortgage. You'll be getting deposits up front and with your forbearances in place you won't be behind except for the shortage, if there is one. Think of it this way - is it worse to lose $300 per month or $1500? Hopefully your job will cover the shortage. If not, get a 2nd job. Here's a thought on increasing your rental income. Instead of renting out the house to a family for the going rental rate, rent out each room to individuals. You'll make more money renting by room, plus you hedge vacancies because it's less likely all three or four roommates will vacate at the same time. I suggest short leases for your room rentals - 6 months to a year. People in that situation are likely thinking short term anyway and it will give you the ability to try and sell the home without a bunch of long term leases attached.

5. Sell the homes. Using creative financing will give you the ability to make the property appeal to more buyers and also push back potential foreclosures. Ideally, you want to sell these homes straight up, but unless you price them aggressively you probably won't have much luck. Selling using a lease option is probably your best bet. Wraparound contracts force you to seller finance your profits, probably something you'd rather not do. Plus, if the lender finds out, they can enforce the due on sale clause and you'll really be in a tight spot. Focus on renting out these units first, then try selling. Market to your renters for lease options or other financing as some may have the means to buy and may not want to move.

6. Don't put in any more money for repairs or fix up. Conserve all cash to make mortgage payments and advertising for rentals.

7. You need to be very careful with that Dallas property because it is financed with hard money and you have a 1-year balloon. Unlike institutional lenders, hard money lenders do want to take your home. That's how they make money and they are very good at it. I doubt they will grant a forbearance, so you need to get those payments caught up - unless you don't think you can sell it by next June for a profit. A lease option or wraparound won't work in this case because it's a one-year note. The advantage you have is it has your lowest payment. If you don't think you can sell it by June, don't put one single cent into it. Negotiate a deed in lieu of foreclosure. Basically, you're giving the house to the lender in exchange for them not foreclosing on you. It will look bad on your credit, but not as bad as a foreclosure or bankruptcy. The money you save on this mortgage can then be put into saving the other properties.

8. If none of these steps works for you, I'm sorry if that's the way it turns out, you'll need to consider some other options. At that point, bankruptcy will only stall the foreclosure process. The least painful way out would be the deed in lieu option. Send in your house keys, sign the paperwork, but still try and keep your primary residence.

9. Full foreclosure. Each state has different rules regarding the foreclosure process. It can take anywhere from 90 days to six months before they start the foreclosure process, known as the notice of default. Then the process can take up to a year and a half to the point of a sheriff's sale. Even after that point, it's still possible to buy back your primary residence. During this time period a whole new group of "real estate investors" will surface. Once you've received the notice of default, you'll start getting letters from people offering to save you from foreclosure. Some will be complete scam artists, trying to operate an equity stripping routine that will leave you devastated. Others will offer refinances with payments that are impossible to make. In the end, they'll wind up with the home instead of your primary lender. Still others will perform lease back deals that take advantage of the lender, transfer ownership of the home to them and leave you as a renter. In your situation Casey, you'll want to steer clear of all of these people.

I hope it doesn't get this bad for you Casey. The naysayers think housing values are going to tank and revert to 1997 prices. History has shown that this just won't happen. I think the current softening market is temporary. If you can ride it out, it will get better. I hope you are able to employ my strategy with success, or at least soften the impending blow of foreclosure.

I wish you and everybody else in your situation luck. I also hope you learn from your mistakes and your next venture is much more successful.

Regards,

Nigel Swaby
www.slcrealestate.blogspot.com

Anonymous said...

that blog is totally fake and will be exposed as such, none of the facts check out.

Anonymous said...

Click through to his site and note the photo accompanying his latest post. It's a photo of a house on fire. Is this how he intends to solve his problems?

Anonymous said...

KEITH if you don't talk to this guy on the phone shortly and convince YOURSELF (and later, us) of his truthfulness, a lot of people are going to blow this whole thing off as a charade possibly starring you

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Anonymous said...

I hate to throw dirt on someone tossing a "honest" buck, even one that entails fraud and deceptive practices ( you hear this, Casey?) but the question still remains:
why isn't he going to jail?