January 27, 2007

Seth Jayson at Motley Fool picks up the cash-back mortgage fraud story and runs with it

Gotta love Motley Fool's Seth Jayson (definitely an HP'er), who's done a good job taking HP issues and MSM'ing 'em. His column today takes up the cash-back mortgage fraud cause.

Like we predicted, this story may have started in Arizona but it's going nationwide. The MSM is finally finding the tip of the iceberg. Oh, won't they be surprised on what lies beneath?

Even the USA Today recently did a cover story today on mortgage fraud. Away we go...

Housing Prices, We Ain't Seen Nothing Yet?
By Seth Jayson

At least not if this situation has been repeated all over the country. With amateur home swappers -- oops, I mean "investors" -- obtaining inflated financing and simply pocketing the cash, and neighbors so anchored to what "the other guy just sold for,"

I think we have a long way left before we find the bottom. And it doesn't take outright fraud to skew prices.

I've long been skeptical about the National Association of Realtors' tired party line about a soft landing, as home prices are not being adjusted to reflect the major givebacks desperate sellers were offering in order to attract buyers, from expensive kitchen remodels to luxury cars.

There's an entire industry out there with an enormous vested interest in duping the public into believing that the unprecedented rise in home values was entirely natural and warranted.

And now we're expected to believe that the worst is over. I think we ain't seen nothing yet.

That will pinch plenty of naive consumers who bought too much with fancy financing. What could it mean for loansters like Countrywide Financial (NYSE: CFC), Wells Fargo (NYSE: WFC), Citi (NYSE: C), Novastar (NYSE: NFI), and others? Time will tell. It sure looks like the smaller rats are already diving off the barques.

19 comments:

Anonymous said...

Not just AZ either.
A house I have been watching for 8 months on ZIP in Forsyth County, GA suddenly jumped in price from $514K to $539K ($25K). Three days later - today - the house is suddenly under contract???

Anonymous said...

Oh well another dreamer

keith said...

Phoenix cash-back fraud watch - here's today's craigslist postings

Jan-27 $255000 ****$20,000**total*Cash*back*$15,000**Back*to**Buyer**$5,000**4*close* (Mesa) pic

Jan-26 ■▼60K CASH BACK -- Pre Construction Opportunity img

Jan-25 $2000000 $$$$$cash back to buyer$$$$$$$$$$$$$300,000$$$$$$$$` ((scottsdale,az))

Jan-24 $599000 4-Plex in Good Area of Sacramento....$20,000 CASH BACK AT CLOSING!!!!! (Sacramento)

Jan-24 $410000 BRAND NEW AZ City 4-PLEX......$20,000 Cash Back at Closing (Arizona City)

Jan-23 $255000 ****$15,000**total*Cash*back*$5,000**Back*to**Buyer**$5,000**4*close* (Mesa) pic

Jan-22 $370000 Huge value - live rent free for 2 years? below market or cash back (Garden Lakes, Avondale) pic

Jan-13 $500000 FSBO-3100 SQ-$30000-CASH BACK AT CLOSING!!! (SURPRISE)

Dec-27 $415000 Make offer! Cash Back at Close! Over $60k in profits! Owner loosing! (Scottsdale) img

Dec-25 $449000 ~~~~~~~~~$$$$$$$$$$$ NORTH GILBERT 6BR/4BA with $37K CASH BACK $$$$$$$ (GILBERT)

Dec-23 $324000 1% Cash Back On This Home...3 Bdrms., 2 Baths, 1 Car Garage... (Central Phoenix) pic

Dec-21 ▊▊▲15% CASH BACK - PreConstruction Deal img

Dec-20 $425000 $25,000 CASH BACK!! Great potential! HORSE PROPERTY (I-10 and 101 Interchange/Avondale)

Dec-18 $160000 ►INVESTORS DREAM!! ► $25,000 Cash-back► Tenants in Place (Phoenix) pic

Dec-15 19 CONDOS FORSALE $$$$$CASH BACK

Dec-14 >>>>>$400K Assignment Cash Back at Closing<<<<<<

Anonymous said...

A law firm in the central valley of california is running a radio ad offering to help homeowners that have been deceived by their lenders.

Leave it to the attornys to capitolize on a growing trend.

The Thinker said...

Seth Jayson should credit The Thinker for that "aint seen nothing yet" zinger that I put forth just a couple of days ago...

keith said...

Yeah, it's nice he picks up our rants, but he really should credit HP'ers for his material

Maybe next time....

Seth - step up to the plate my man, we know you're reading!

Mark in San Diego said...

"A law firm in the central valley of california is running a radio ad offering to help homeowners that have been deceived by their lenders."

Comment - This is great - what I love about America - one sleazy group of lawyers fights it out with another sleazy group of mortgage hucksters. . .BTW, the best quote I saw all week was "would you take advice from a loan officer who used to be selling Payless shoes?" (and will soon be back selling Payless shoes)

Anonymous said...

There will be lots of legal work generated from this fiasco. Bankruptcy, foreclosure, mortgage fraud, consumer fraud etc.

One recent piece in the Washington Post highlighted how lawyer's were reviewing developer contracts to help buyers get out buying the now overpriced POS crap boxes that were contracted before the bubble burst and get their deposit back. They have been successful because many developer contracts were completely one sided, i.e. they lacked a mutuality of obligation.

Many of the lawyers interviewed for the piece stated that it amazed them how many people just blindly signed all these contracts that represent the largest purchase many people would make in their lives. They said if they just read the contracts & loan documents before signing they would be much better off.

So would you rather pay a lawyer a few hundred bucks for a few hours to review the paperwork and explain your half-mil plus deal before you sign or would you rather have to pay tens of thousands of dollars to all the lawyers involved in the bankruptcy, foreclosure and civil suit proceedings after you sign and you now realize you're screwed and its all your own fault??

Looks to me like anyone that has to pay for lawyers due to a bad deal on an overpriced POS crapbox with an exploding loan deserves to have the vulture-lawyers pick their bones clean. It will thin out the gene pool and bring housing back in line for all the responsible people.

Stuck in So Pa said...

"Anonymous said...

Looks to me like anyone that has to pay for lawyers due to a bad deal on an overpriced POS crapbox with an exploding loan deserves to have the vulture-lawyers pick their bones clean."

One group that will ALWAYS clean up in good times and bad are our beloved attorneys. You say you shouldn't be held accountable for ANYTHING you do in life? It’s the American way? No problem, just call the law offices of 'Willee, Soakem, and How' on our toll free number!

Almost nobody is coming out unscathed out of this except the slimeballs.

Remember: It's God's Will Or Somebody Else’s Fault

fake_estate said...

Payless shoes? It's more likely the loan officer was selling crack, whores or weed in his previous job. I don't think shoe salesmen are that greedy and crooked.

Anonymous said...

I don't think shoe salesmen are that greedy and crooked.

----------------------------------
Oh, come on what about Al Bundy?

Anonymous said...

Every dinner paarty i went to for about 4 years all you heard was "can you believe these house prices." The last few parties i've been to everybodys talking about the war.

Anonymous said...

A law firm in the central valley of california is running a radio ad offering to help homeowners that have been deceived by their lenders.

Leave it to the attornys to capitolize on a growing trend.


I have heard the ad in San Diego also. Don't know if it's the same law firm.

Of course the lawyers are in on this. They make up most of the politicians in office, created the rules to allow a bubble, and now will have endless work capitalizing on the pain. Maybe they don't like Realtwhores taking their spot as the most despised, worthless turds on the planet.

Anonymous said...

Where are Time and Newsweek covers on the housing crash? Why haven't they put the biggest story of the year on the cover? What are they trying to hide? And it would sell alot of issues every homeowner would buy a copy and freak!

Anonymous said...

Re USA article on cash back fraud, etc.

Look at denver.craigslist.com today,
click housing, write in cash back:
Bingo 160 ads. 160!

PKK

Anonymous said...

Al Bundy never lied to us. besides, do you know how much shoe salespeople at Nordstrom earn. yeah, thats right. who is your shoe daddy?

Anonymous said...

are we in the begining stages of a Shoe bubble ?
hmmmm, sounds kinda smelly..

Anonymous said...

Remember, he made four touchdowns for Polk High?

Go,AL!

Anonymous said...

Phoenix was only the start if you had your head in the sand.

Try Colorado & Taiwan Lee.