Nice again to see the MSM (and the lazy Catherine Reagor!) FINALLY reporting on the meat of the housing bubble ponzi scheme, although the cat is way out of the bag now.
Greg Swann's Phoenix Arizona may in the end be the epicenter of not just the housing bubble, but also mortgage fraud. Why? Because there are no real jobs in Phoenix. Just a bunch of high school GED's gaming the system with mortgage fraud, fake appraisals, and the REIC spinning out of control.
Oh, man, this is going to end so ugly. Someone get the paddywagon, we got a bunch of 'em to put in jail when this is over. And billions, if not trillions, in fraudulent loans. Fannie, Freddie, hedge funds, Countrywide shareholders and China should be a bit nervous right about now.
Valley fighting mortgage fraud wave
A wave of mortgage fraud is rippling through pockets of the Valley, inflating home values through scams called cash-back deals.
Left unchecked, cash-back deals cost homeowners and lenders millions of dollars and could erode confidence and values in Arizona's real estate market.
The fraud involves obtaining a mortgage for more than a home is worth and pocketing the extra money in cash. Neighbors may then discover home values in the area are exaggerated.
Homeowners stuck with overpriced mortgages may never recover the difference. And lenders end up with bad loans that, in the long run, could hurt the Arizona real estate market, the largest segment of the state economy.
"Arizona was like a housing gold rush for speculators from California, Florida and Texas a few years ago," said Detroit real estate agent and fraud activist Ralph Roberts, author of the book Flipping Houses for Dummies. "But home prices stopped climbing, and speculators got greedy. Now the cash-back scam is going to make the savings and loan crisis of the 1980s look like a soft landing"
Valley housing-market experts now believe home values are inflated anywhere from 10 to 40 percent.