April 10, 2007

So much fraud. So many con-men. So little oversight. And the biggest Ponzi Scheme in the history of humanity.

Folks, I'm not sure if you realise it yet, but we're witnessing the biggest financial story of all time. The collapse of the US housing market (aka Ponzi Scheme), and the uncovering of the causes and the rampant corruption, will dominate the news cycle for years to come.


Life as America knew it will never be the same. Everyone, every man, woman and child, will be impacted. And the story won't stop at land's end. The housing Ponzi Scheme was worldwide. Even though the US sure did it up good. USA! USA! USA!

Here's just one of many mortgage fraud stories over at the mortgage fraud blog. And there are so, so, so many more to come. Get ready.

Atlanta's largest mortgage fraud trial see's 10 convictions and 12 guilty pleas

David E. Nahmias announced that after an eight week trial, a federal jury today returned guilty verdicts against ten defendants charged with multiple counts in a mortgage fraud scheme that targeted the Atlanta metro housing and condo market from 2000 through part of 2003.

The verdicts returned today included guilty verdicts on charges of loan fraud, wire and mail fraud, and money laundering.

United States Attorney David E. Nahmias said of the verdicts, “The monetary loss calculated to date is in excess of 41 million dollars but we expect it to be significantly higher when we conclude our work. More importantly, this monetary loss, as great as it is, does not fully capture the loss to the many neighborhoods and condominium communities that have been gutted of their value due to this one fraud scheme.

These guilty verdicts condemn the corrupt actions of the key people who were responsible for this fraud scheme, from crooked attorneys and appraisers, to loan officers, to the man at the top, Phillip E. Hill. The verdicts in this case take us one step closer to repairing the corroded cornerstone of a large-scale corrupt housing market that has made the metro Atlanta area one of the most active mortgage fraud locations in the nation.”

26 comments:

honica jewinski said...

Dude, the biggest ponzi scheme in the history of the world is clearly the "growth" economy here in the States. The jews at the federal reserve have got to be laughing their balls off about the pathetic American lemming never waking up to how much money they have stolen from us through monetary inflation. The housing bubble is but one little niche in this "growth" economy, insignificant in comparison.

buzz kill said...

Millions of fraudsters all across the USA got away with it. That one case you mentioned involved hundreds of players. Russia thinks they're corrupt? Ha! USA! USA!

Anonymous said...

Subprime mess hurts even Harley-Davidson
Posted Apr 9th 2007 10:48AM by Michael Rainey
Filed under: Bad news, Harley-Davidson (HOG)

A lot of readers are interested in the subprime loans situation. Most of the attention has been on how low-quality loans in the housing sector have created a massive bubble (for those of you who missed it, be sure to take a ride on the housing bubble roller coaster) and the consequences of that bubble for the economy. No doubt there's much to worry about there. But the question of bad loans is actually much bigger than that.

Easy credit and questionable loan practices affect all segments of the economy. For example, even Harley-Davidson (NYSE: HOG) is having trouble with bad loans. A recent article on TheStreet.com took a look at loans made by the HOG, and it's not a pretty picture. Harley has a credit subsidiary, HDFS, which makes about half of the loans to new customers. Delinquencies on loan payments at HDFS are on the rise. In the first quarter of 2005, delinquencies were 3.6% of outstanding loans. By the fourth quarter, delinquencies had risen to 5.18%.

This increase in delinquencies looks a lot like the situation in the mortgage market. And just like mortgages, loans made by the HOG are packaged and sold to investors. So bad loans will hurt more than Harley. They will also have a negative effect on the investors who have made bets on the ability of American consumers to pay for the expensive toys that clutter our garages. (That raises an interesting question: what percentage of Harleys are used for basic transport and what percentage are used just for fun?)

The basic picture is the same, though. Trying to keep the consumption machine going over the last few years, companies (following the Fed's lead) used easy credit to hook consumers who probably shouldn't have been buying expensive things with long term loans. Whether it's housing or motorcycles, the lesson is the same: excessively easy credit is costly in the long run.

Anonymous said...

I recently drove across country. The one thing I noticed, state by state, the shiny brand new Harley dealerships that have popped up along the interstate. Like McDonalds, they seemed to be everywhere, transforming the once elusive brand into a ‘drive thru’ for the minions.

Remember when Harley's were special?

Most likely another branch in the housing atm tree.

Anonymous said...

Thats nothing. The Temecula, CA fraud ring is 1.2 billion they are charged with.

HOGGY said...

Hey if Harley Davidsons are as cheap as Jap bikes in 2 years that WILL BE AWSOME. (i still wont buy one)

FYI on Craigslist im seeing LOTS of used harleys for deep discounts. They used to go for the same price used as they cost new. (for real!) I think due to all the joe six pack home equity extraction was looking for Harleys faster than they could build them. Now not so much.

Anonymous said...

Folks, I'm not sure if you realise it yet, but we're witnessing the biggest financial story of all time. The collapse of the US housing market (aka Ponzi Scheme), and the uncovering of the causes and the rampant corruption, will dominate the news cycle for years to come.

Life as America knew it will never be the same. Everyone, every man, woman and child, will be impacted. And the story won't stop at land's end. The housing Ponzi Scheme was worldwide. Even though the US sure did it up good. USA! USA! USA!


Holy shit KEEFER, you've really gone to the dark side. You spell realize as realise and hate the US with a passion. Congrats you are now a true resident of Londonistan!!

Life as we know it will be over...yeah OK dude whatever you say. It's 1933 all over again, except for the fact that unemployment is 4%, GDO growth is 3%, and every freaking restaurant is packed on Friday nights....but aside from all that you're right it's just like the 1930s.

Do you really believe any of your bullshit?

Anonymous said...

One thing that HPers should realize is that none of this mess will evr have any meaningful outcome within the government or regulatory body of the U-ESSAY.
So kick back ,relaxe,Pop open some cold ones ,get the Jiffy Pop ,and enjoy the the show.
It is funny to watch the masters herd the sheep from one side of the ship to the other,seeing how high the group as a whole will jump,thru which hoops,and so on.
Also ,the smart ones will sense the opportunity ,and make some dough as they learn to predict the master's next command to the lemmings.Go For IT,it's the wise thing to do.
Shakster-

kenduffelsniffenspotzen said...

How many of those bad loans have been securitised, and sold to your 401-K,
the world wonders.....

downinoz said...

Its just the tip of the iceberg. Think of those jurisdictions where the powers that be do not have the inclination or interest in pursuing these type of investigations. Its a systemic issue. Willing to bet these guys in Atlanta are either minority or just totally brazen.....If these guys are guilty there should be 200k more out there that should also go to the can.

hoot hoot said...

It's time for these RE scumbags to meet Bubba and Tyrone

Mike F. said...

I've been following this website for a little while (a few weeks) as well as a number of other sites, mostly because I'm trying to figure out what the main important factors were that went into creating the sub-prime/housing problem in the US.

Disclaimer: I haven't lived in the US for ten years, so I may be making assumptions about my homeland that are inaccurate.

A couple of things seem to distinguish the US RE market, or at least the money side of it, from the market in Australia. Australia's capital cities have also seen a massive increase in RE value over the same period of time that the USA did, but there hasn't been (as yet) a significant downturn. First, "stamp duties" charged by the states during the sale of a house (to the purchaser) are a one-time cost that make "flipping" less appealing. Second, rental returns on investment properties, while not equal to average mortgage repayments, seem to be higher (Yield about 4-5 percent of property value). Third, less exotic financing. Almost all loans are variable, but can have a short (1 - 5 year) fixed period, and there are (to date) fewer risky loans issued at higher interest rates. Also, the banks that loan you the money are much more likely to hold onto that debt for the life of the loan (we don't have an equivalent of Fannie Mae or Freddie Mac down here). I don't know if these differences are enough to prevent a similar softening of the market here (you could check out realestate.com.au to see just what typical prices are in Melbourne and Sydney) so I'm wondering.

Could anybody tell me what they think the one or two main causes of the crisis in the US are?

Anonymous said...

The ten defendants found guilty today of participating in this conspiracy include:
MARCUS C. ALCINDOR, a/k/a “Christopher Alcindor,” 42, of St. Lucia, convicted of conspiracy, loan fraud, mail and wire fraud, and money laundering;
BARBARA BROWN, 34, of Marietta, Georgia, convicted of conspiracy and two counts of wire fraud;
FRED FARMER, 59, of Roswell, Georgia, convicted of conspiracy, loan fraud, mail and wire fraud, and money laundering;
PHILLIP E. HILL, 49, of Blounstown, Florida, convicted of conspiracy, loan fraud, mail and wire fraud, and money laundering;
CHRISTINE LAUDERMILL, 40, convicted of conspiracy, loan fraud, wire fraud, and money laundering;
ROBERT POWERS, 45, of Cumming, Georgia, convicted of conspiracy, loan fraud, mail and wire fraud, and money laundering;
LESLIE RECTOR, 35, of Atlanta, Georgia, convicted of conspiracy, loan fraud, mail and wire fraud, and money laundering;
DAVID THOMAS, 46, of Baton Rouge, Louisiana, convicted of conspiracy, loan fraud, and money laundering;
DEAN THOMAS, 42, of Atlanta, Georgia, convicted of conspiracy and money laundering; and
DAVID VAN MERSBERGEN, 46, of Atlanta, Georgia, convicted of conspiracy, loan fraud, and money laundering.

In addition to the defendants found guilty today, several other individuals pleaded guilty to mortgage fraud charges related to the same scheme before trial. These defendants include:
WILLIAM CHAVIS, 45, of Atlanta, Georgia;
JEREMY DERCOLA, 29, of Douglasville, Georgia, MICHAEL FLAKE, 31, of Stone Mountain, Georgia;
WESLEY GOLDEN, 57, of Atlanta, Georgia;
CHRISTOPHER HALCOMB, 45, of Cumming, Georgia;
WENDELL HIGGS, 42, of Suwanee, Georgia;
CORTNEY JACKSON, 49, of Detroit, Michigan,
WAYNE JENKINS, 49, of Atlanta, Georgia;
RASHID MUHAMMAD, 36, of Syracuse, New York;
JULIAN PEREZ, a/k/a “Tony Perez,” 49, of Roswell, Georgia;
BRANT PETREE, 23, of Marietta, Georgia;
THEODORE TAGALAKIS, 36, of Atlanta, Georgia;
ANDREW WOLF, 45, of Alpharetta, Georgia.

CHERYL DENNY, 42, of St. Lucia, and JAMES MOSS, 49, of Roswell, Georgia, were acquitted in directed verdicts by the court before the jury began its deliberations.

The trial of two remaining defendants, RILEY GRAHAM, a/k/a “Riley Williams,” 39, of Detroit, Michigan, and ANNETTE SPEAR, 50, of Union City, Georgia, is tentatively scheduled for April, 2007.

CHRISTOPHER BAKER, 40, whose last known address was Canada, and CARL BEST, 42, of New York City; are both fugitives and are being sought. Anyone with information on these defendants is asked to call IRS-Criminal Investigation.



you know why is it i get the feeling there are some nappy headed hos in this bunch?

Anonymous said...

"The jews at the federal reserve have got to be laughing their balls off about the pathetic American lemming never waking up to how much money they have stolen from us through monetary inflation."


not only that but if you ask them they will tell you. they don't care. americans are so stupid and disconnected from reality, the crooks can get on tv and tell us exactly what they are doing and no one would even notice. the same thing with this war. the jews have stated here and there and anyone can look it up if you want , that they are glad they have found some chumps to fight their wars for them......heck they don't care. if anyone is stupid enough to do what someone else wants, then why stop them. this is what we do now. i am so proud...

Know Bush, Know War. No Bush, No War said...

Q: If the housing market (and re-fi boom) was the only industry that kept Americans purchasing over the last several years, whats gonna happen when it all come crashing down at free-fall speed?

A: Bush will keep sending OUR money overseas to rebuild the Bush-Co bombed-out Iraq - after "We the people" paid to destroy it.

Nice, just nice. Seems like there's something fishy going on around here.

(Haans Blix is still laughing his a*s off!)

Iraq-Vacations.com Save 85% Now!

Anonymous said...

Only in America would "giving away money" be a crime.

Everything is upside down a backwards. It's like deja-vu all over again.

Geebus H. Krist.

bozonian said...

I just have to laugh my ass off at these people blaming everything but their own greed, laziness and ignorance for what happened to them:

http://tinyurl.com/ypgpgy

Top 10 reasons people lost money in the housing bubble:

10. I just get off boat from Buttfuckistan. Nice people in Irvine get me 5 million dollars. Now collection man is pain in my assholes.

9. It was them Jews in New York City what gave me too much money.

8. "How wuz I suppozed to know they'z was a payback style Yankee loan?"

7. "Like Anna Nicole Smith, I'm rich, famous, beautiful (haha) so I got too much money and now I'm sad and have to kill myself."

6. "Haliburton got me too much money. It's Bush's cronies and the Skull and Bones that gave me too much money."

5. "Since I was successful in my last business venture, Joe's Frozen Dogshit I thought I'd give real estate a try."

4. "Rush Limbaugh said there was no housing bubble. You can trust Rush!"

3. "It's them Iranians that got me too much money. Nuke Iran."

2. "Them Librils in Warshington gave me too much money. I wish I hadn't given half of it to that television preacher."

1. "Whitey gave me too much money. My civil rights got violated."

ZOOM BOOM 2 DOOM GLOOM said...

Sagging Orders Continue at Large Home Builder

April 10, 2007 USA Today

FORT WORTH (AP) — D.R. Horton (DHI), the nation's largest home builder by deliveries, said Tuesday its fiscal second-quarter sales orders fell 37%, led by even steeper declines in California and the Southwest.

"We continue to sell more homes than any other builder, even though the spring selling season has not gotten off to its usual strong start," Chairman Donald Horton said in a statement.

Net sales orders for the quarter ended March 31 totaled 9,983 homes, down from 15,771 homes during the prior-year quarter. The value of the orders dropped to $2.6 billion from $4.4 billion in the previous year.

Net sales orders over six months fell to $4.9 billion, or 18,754 homes, from $7.5 billion, or 27,234 homes during the same period in fiscal 2006.

Cancellation rate for the quarter was 32%.

"Our cancellation rate is essentially unchanged from the prior quarter, but it remains above our historical range as we continue to see an increase in the use of sales incentives in many of our markets," Donald Horton said.

He said inventory levels of new and existing homes remain high, as market conditions remain challenging.

The company saw declines in every region, but experienced the largest quarterly drop in California, where orders fell 59% to 1,107 homes from 2,697 in the prior year. Orders in the Southwest fell 39%.

Home orders in the Northeast declined the least, falling 21% to 1,564 homes from 1,990 a year earlier.

Last month, D.R. Horton Chief Executive Don Tomnitz said this year was "going to suck" for home builders. He said the company may have to take further write-offs to reflect unsold homes and lower land values.

******

Sure am glad I'm renting a pad at $400/mth! : ) Bwaaaaaaaaa!!!!!!!

As soon as I saw Bush "using law suites" not to recount American votes and investigate voting fraud in the 2000 Florida elections, (including the Bush-co 9/11 fake attack cover-up) I knew it (America) was DOOMED!!! : (

Time for Impeachment!

RE4U said...

These convictions have inspired me to use my HELOC money and start a new company. We're going to make a new brand of "personal lubricant" targeted at high rolling world travellers, well former world travelers, such as these RE professionals. Besides the usual slippery stuff this luxury product will contain sand, not just any sand but sand from beaches at the worlds most exclusive resorts. These MaryAnns will have the satisfaction of knowing that they belong to the most elite group of punks in the joint.

Mort said...

Could anybody tell me what they think the one or two main causes of the crisis in the US are?

That's easy, fraud and speculation.

leaky pipes in the desert said...

350,000 for 35,000

Anonymous said...

It couldn't of happened to a more deserving people.

I will not be impacted. I have cash, a family business in Asia with a spot waiting for me should I choose to, and NO INVESTMENTS IN THE USA.

I still like the USA, but plan to enjoy it as a person with money surrounded by people without.

Anonymous said...

Of course it's the nappy headed hos that get arrested.

Whites like Casey Serin practically are begging to get arrested, and are doing the DAs work for them... and are STILL NOT ARRESTED!!!

Casey's case were in multiple states, which should be an automatic flag for the FBI... and still no case.

Casey is currently doing corporate fraud, and blogging about it. Still no government action.

America is racist... they only arrest the nappy headed hos... and leave the whites alone.

burn baby burn said...

My Father taught me a very early age "You cannot cheat an honest man" I have no sympathy for these people. The way I see it is they are either Greedy or Stupid take your pick. Just the same way ignorance is no protection from the law.

kenduffelsniffenspotzen said...

(i) Mike F. said...

I've been following this website for a little while (a few weeks) as well as a number of other sites, mostly because I'm trying to figure out what the main important factors were that went into creating the sub-prime/housing problem in the US.......

Could anybody tell me what they think the one or two main causes of the crisis in the US are?(i)

Hello Mike. I think Fannie May and Freddie Mac are at the very heart of the problem. A bank or mortgage lender can make a loan to someone, then sell it off as part of a securitized package to a third party.

The people making the loans charge all kinds of up front fees, and add the cost to the loan. They don't care if the borrower defaults, because by that time they have sold the loan to a pension fund or insurance company.

The people making the loans rake in all the fees. Somebody else gets all the risk.

So, cause number one: no risk to the lender.

Cause number two: greed, they got their income.

jackpayne said...

Maybe the smartest RE investors of all are those who lined up reverse mortgages at the top of the boom in 2005.

--Jack Payne
www.sixhrs.com