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.