Instead of the government/banker plan to bail out failed housing gamblers, shouldn't our government be investigating these homedebtors and their mortgage brokers for mortgage fraud first?
I've gotta believe 90% of 'em filed fraudulent loan docs in the first place...
Paulson Says Deal is Near to Bail Out Homeowners - Plan Would Stop Mortgages From Resetting to Higher Interests Rates
Treasury Secretary Henry Paulson said Monday he is confident there will soon be an agreement to help thousands of homeowners avoid mortgage defaults by temporarily freezing their interest rates.
December 04, 2007
Instead of bailing out the failed housing gamblers shouldn't the government be investigating them for mortgage fraud first?
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Should they investigate and charge the homedebtors for fraud? Of course.
Will they? Of course not. There is no personal responsibility left in this country. Everything is someone else's fault. Always blame the next guy and never yourself.
Pathetic.
Either way the banks lose and go bust. Either the FB's can't pay the higher rates and default, or the rates get frozen and the banks make no money in interest.
It's over either way.
YES!!!!!
If not mortgage fraud then tax fraud.
Either they told the banks they earn more than they actually do or they told the IRS that they earn less than they actually do.
Paulson has a better chance of finding the Holy Grail...
By the way, why does this blog forget Paulson cashed out big-time before he took his government job? That's all one really needs to know about him...
So, does this mean that new home buyers get these same favorable terms for the homes they want to buy?
And, er, "Moral Hazard". You took a risk, it went bad, pay the price and move on.
Sick.
Let's not forget to investigate the scum lenders who got them the loans, and the trusted friends who referred the borrowers to the scum lenders. Follow the money!
Frank@Scottsdale-Sucks.com said...
Should they investigate and charge the homedebtors for fraud? Of course.
Will they? Of course not. There is no personal responsibility left in this country. Everything is someone else's fault. Always blame the next guy and never yourself.
Pathetic.
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Do you know just how wrong you are? You've got a systemic breakdown crisis in the financial/monetary system and you think it's caused by a lack of personal responsibility?
>> Either they told the banks they earn more than they actually do or they told the IRS that they earn less than they actually do.
One would think the IRS could stop ALL of its current investigations, and begin investigating all those homedebtors and mortgage brokers for fraud. It would keep the IRS busy for years...
I thought Hank Paulson said a few weeks back that the sub prime mess was CONTAINED??
What a LIAR !!!!!
At least as of this weekend, the stated income borrowers would have to document their income to qualify for this "freeze".
I sincerely doubt that any even the most craven political whore (ie. Schumer) will go out on the limb to support a subsidy by taxpayers to tax-cheaters.
Before the democratization of extreme leverage became vogue, tax cheating was the original justification for "stated income" loans.
They are arresting and prosecuting people as they should be...
From a weekly newsletter...
EIGHT PLEAD GUILTY TO MORTGAGE FRAUD INVOLVING 200 HOMES IN MINNESOTA
Parish Marketing and Development Corporation (PMDC), and its owners, pleaded guilty in federal court today to conspiring to commit $100 million mortgage fraud and money laundering charges arising from their scheme involving approximately 200 residences and approximately $100 million in loan proceeds. PMDC and its owners acknowledged obtaining more than $25 million for PMDC from the scheme.
PMDC, its owners, Michael Alan Parish, 62, and his wife, Ardith Ann Parish, 61, and a PMDC agent, Christopher David Troup, 39, all of Eagan, Minnesota before Judge Ann D.Montgomery pleaded guilty to participating in the conspiracy. All four defendants acknowledged participating in the mortgage fraud scheme, utilizing “straw buyers” to purchase approximately 200 properties built by PMDC, primarily in the New Prague, New Market and Lonsdale area. In total, the scheme obtained nearly $100 million in loan proceeds, with PMDC receiving in excess of $25 million from these loan proceeds.
On September 20, 2007, Melissa Smith, of Ohio, pleaded guilty to conspiring to commit mortgage fraud. Smith admitted to acting as a straw buyer purchasing 46 residences for approximately $20 million from October 2004 through January 2007. The four defendants today also acknowledged completing loan applications for the straw purchases, which included false information, executing loan documents in the names of the straw buyers, and manufacturing and providing false documentation, such as false representations of employment and false verifications of deposit, for the straw buyers for purposes of obtaining loan proceeds to purchase the properties. Additionally they used overstated appraisals to falsely increase the values of the properties.
On September 5, 2007, Ramiz Yousef Saadeh, a former US Bank officer you mean he's not an evil mortgage broker... pleaded guilty to conspiring to commit mortgage fraud. Saadeh admitted providing false verifications of deposit to the home builder on behalf of straw buyers.
On October 11, 2007, Donald Todd Yeager, of Oklahoma pleaded guilty to honest services fraud. Yeager admitted providing misleading and inflated appraisals to the home builder.
On September 7, 2007, Kristopher Kenton Robbins, a closing agent and licensed notary public pleaded guilty to conspiring to commit mortgage fraud. Robbins as a notary, admitted allowing signatures of the straw buyers to be signed by others.
The straw buyers made no payments on the mortgages that were taken out in their names.
The defendants will be sentenced based on determinations made by the court regarding the full extent of loss, the number of victims and the defendants’ respective roles in the scheme. Pursuant to the terms of the plea agreements, the government contends the scheme may have resulted in a loss of as much as $50 million and has 50 or more victims. The federal sentencing guidelines call for a sentence of between 11 and 14 years imprisonment for Michael Parish, a sentence of between nine and 11 years imprisonment for Troup, and five years imprisonment for Ardith Parish, who was deemed to be a minor participant. The government will also seek an order of full restitution for the victims of the fraud.
I get this newsletter every week. Every week fraud prosecutions are highlighted.
But I agree with the premise of this thread, while looking to dole out taxpayer dollars, fraud should be looked into.
That would be a little too close to home. Sorta like instead of addreessing her as "Senator Feinstein" she should maybe be called 'inmate 4537'.
Think about it?
P.S.: Angelo looked pale yesterday. There must be a shortage of tanning booths in DC? Help a brother out, if you know a good tanning both in DC, drop Angie a line. He will soon be going there for extended periods when his trial begins...
Hang 'em HIGH
I like tax fraud. I can do that.
If they can bail out irresponsible losers, then we are entitled to tax fraud.
Anyone with me?
amen
amen
this is exactly what my mind has been warping about. this whole indirect bailout just seemed to happen way to quick...we dont know the values of anything anymore, we're jumping to conclusions, we're saying something is contained while later that day thinking of a way to duct tape the rubbermaid.
insanity
Who want to bet that the mortgage interest freeze will be in effect until after the 08 election?
The problem is that most of these folks having problems are poor.
It'd be a loss for the IRS to investigate. Plus, they will get hit with a big tax bill when the foreclose anyway.
On another note, I heard today that they are considering letting the states issue US tax free bonds to subsidize the bailout plan... that taxpayer money.
No fracking way should the taxpayer have to pay for this.
maybe I was a fool for not buying a home at 0 down and then refinancing and got about $400,000 to $500,000 out and spent all that money and declaring Foreclosure. With government the fraudsters always win.
If they won't investigate 9/11, do you really think they'll open this can of worms? They profit from this Pinzi scheme.
"At least as of this weekend, the stated income borrowers would have to document their income to qualify for this "freeze". "
Wouldn't that be sweet if we found out the ultimate purpose of this program was a honey pot? To get the frauds to prove that they lied, and then haul them off to jail? now THAT would be sweet justice and that should be what the America (that we used to love) was all about!
"Do you know just how wrong you are? You've got a systemic breakdown crisis in the financial/monetary system and you think it's caused by a lack of personal responsibility?"
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Mr Anon, I do not agree that the 'system' was at fault. It's still all about personal responsibility. Just because you CAN borrow more than you can chew doesn't mean you should.
Just because you CAN eat more than you can chew and become obese and kill yourself, doesn't mean you should.
Just because you CAN buy a gun and shoot yourself with it, doesn't mean you should.
Just because you CAN steal money from someone doesn't mean you should.
I don't blame the system one bit. There will ALWAYS be temptations in life that are evil but that is reality. We do not live in a sheltered amusement park like Disneyland. We are all adults and should behave responsibly as such and not wait for Mom and Dad (govt in this case) to bail us out or watch over our shoulder. As soon as you turned 18, you should've learned how to think for yourself and make sound judgement.
Looks like it's time for Mr Anon to grow up. Although I do notice that among the masses, maturity is coming a lot later than life if never. When I hit the clubs, I often see 40-somethings and sometimes even 50-60somethings there trying to be cool and wearing clothes that belong on a high schooler.
Do you know just how wrong you are? You've got a systemic breakdown crisis in the financial/monetary system and you think it's caused by a lack of personal responsibility?
The systemic breakdown was caused by greed and lack of personal responsibility. If the FBI had started arresting people for fraud back in 2004, this whole thing would have been stopped dead in its tracks.
"You've got a systemic breakdown crisis in the financial/monetary system and you think it's caused by a lack of personal responsibility?"
Wow, with all the thoughts passing through my head, I cannot even begin to form a good answer.
"Wow, with all the thoughts passing through my head, I cannot even begin to form a good answer"
That sounds like another way of saying, "I am really slow and stupid ;P "
The problem is that most of these folks having problems are poor.
Oh you mean poor like Citibank, Washington Mutual, Morgan Stanley, Lehman Bros, Merill Lynch, an army of greedy fee-based mortagage brokers and Tangelo Freaking Mozillo?
It'd be a loss for the IRS to investigate. Plus, they will get hit with a big tax bill when the foreclose anyway.
The point is to nail their non-naive co-conspirators.
I want my freebies too !!!
Just think about it... rewards for flippers, liars, idiots, con artists, debt whores and other human refuse. But someone who bought a home financed with a conventional fixed mortgage and with payments within their financial means gets nothing (in other words... GETS SCREWED). People who refused to buy over priced houses get nothing but higher taxes, lower interest rates on their savings and depreciated, inflated dollars.
By the way, I like the name one blogger uses... "Bring Back Debtors Prisons". Most of these spend thrift, debt whores deserve to be locked up, at least if they committed fraud on their mortgage applications.
"You've got a systemic breakdown crisis in the financial/monetary system and you think it's caused by a lack of personal responsibility?"
I believe this. Can you please tell me why it is wrong? What really caused the systemic breakdown and why did it not happen before low interest rates and loose lending standards?
Just trying to understand....
Simply put, it's cheaper to do this than to let the banks foreclose. They may go after some of the fraudsters, but not nearly enough. Most of them probably don't have enough assets to seize to interest the IRS and/or wouldn't be high profile enough to get some press coverage.
Is it fair? Nah.
Are they getting off easy? Yep.
Are any of the elected officials going to do anything to rectify this situation? (Peals of loud laughter)
Don't get your blood pressure stratospheric about it. It won't change a thing, and it's not worth a trip to the ER.
In the 90's crash, interest rates stayed the same. So what? Damage control.
Happy Homeowner in the Stix said...
Simply put, it's cheaper to do this than to let the banks foreclose...Are any of the elected officials going to do anything to rectify this situation? (Peals of loud laughter)
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I dont get it? Are you dual personality or stupid, or maybe both? Why do you say on one line "its cheaper to do this"-refering to the bailout-and then later you say "Are any of the elected officals going to do ANYTHING to rectify situation?" Then, stupidly (peels of laughter). Yes, the peels of laughter is appropriate but only at the Retarded bailout you believe is going to go into effect.
Economists, analysts, commentators are all saying now that this government intervention isnt going to do any much good for helping out distressed owners. Its just too complicated to effectively put into place. (especially a stupid-retarded ass BUSH headed government that we have in place now) (PEELS OF LAUGHTER!!!!)
Dream on-Happy Debt Owner on your depreciating asset
OC Mike said...
"You've got a systemic breakdown crisis in the financial/monetary system and you think it's caused by a lack of personal responsibility?"
I believe this. Can you please tell me why it is wrong? What really caused the systemic breakdown and why did it not happen before low interest rates and loose lending standards?
Just trying to understand....
December 04, 2007 7:49 PM
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OC Mike,
This collapse has been in progress for years. It started in earnest with the assassination of President Kennedy in late 1963. By the 1970's and beyond this country was transformed from being the worlds leading "producer society" to a "post industrial" junk heap of hamburger flippers, stock brokers and real estate flunkies.
In 1971 President Nixon on advice of George Schultz got rid of FDR's Bretton Woods Monetary system of fixed exchange rates in favor of an esoteric floating excahnge rate system. And it is this system created in 1971 (to destroy the United States) that is in full blown collapse right now.
Since the 1970's they have been blowing up "paper values" while destroying and cananilizing real physical wealth. There is nothing left for these guys to steal that might keep their system afloat awhile longer. There is $700 trillion in derivative obligatiosn alone. The whole pile of paper assets is worthless and they know it.
But were not facing a housing crisis per se, we are facing the systemic breakdown of the current worlds financial system. This sucker is dead.
We need to do what FDR did in 1930's or else the survival prognosis for all of us is not very good.
Anonymous, well....I might be dual personality. But I'm not so dumb as you are, dahlink.
It costs a lender more to foreclose on someone than to get a reduced payment on a mortgage, especially when houses are sitting on the market. That's a no-brainer, especially if they can get guvmint money to help them out. What part of that don't you understand??
Now, as far as the politicians fixing this mess, like some of the Ron Paul freaks think will happen? Dream on. How old are you, anyway? Don't you know that politicians will say anything to get elected yet? Why is he any different?
My house may be depreciating, slightly. But....repeat after me....I'm still paying less than rent, so it still makes economic sense. (That part sure chaps your ass, don't it?)
Anon 12:10AM:
I'm familiar with the bigger picture that you explained, but had not placed the housing meltdown/credit crunch in that context. I hope you are wrong about the world financial system collapsing this time around, but I wouldn't argue against it because I think ultimately you will be right. Thanks for a broader view.
The Fed Chairman will lower rates to nothing and the teaser freezer rates will be at some profit margin for lenders .At least it buys time for inflation and income to catch up to the inflated prices in real estate .
The government will ignore mortgage fraud from the joe six pack average home investor,and go after major players or bigger fraud rings .
The problem with the Feds remedy is that it isn't just or fair and it will create inflation for us all and it will not prevent a real estate crash .It will just drag out the price adjustments longer .
If everyone who needed or wanted to sell put their house on the market today ,and you add to that all the excess new home unsold inventory and add to that the foreclosures ,we would have a 10 year supply of housing .
For a real estate market to have so many more sellers than qualified buyer demand is something that usually doesn't happen to this extreme .
So, the borrowers that committed fraud on their loan applications will be given a pass ,and even bailed out(if Paulson gets his way )in order to prevent greater losses to to lenders .
Crime should not be condoned or even rewarded by government policy ,but the government considers their bail-outs the lessor of the evils it would face with a financial systems crash .
I really don't care what happens anymore . I should of know years ago that when children had to be afraid of getting shot at schools that law and order was gone in America .
OC Mike said...
Anon 12:10AM:
I'm familiar with the bigger picture that you explained, but had not placed the housing meltdown/credit crunch in that context. I hope you are wrong about the world financial system collapsing this time around, but I wouldn't argue against it because I think ultimately you will be right. Thanks for a broader view.
December 05, 2007 5:52 AM
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No I am not wrong, the system is over ripe for collapse. The so called housing bubble was just the last in a series of decades long looting by bankers. The crash of October 1987,the Savings and Loan collapse 1988-1991, the crash of Long Term Capital Management 1998, the Y2K crash of 2000-2001, and now this crash.
The US economy has been operating at below break even for 3 decades or more. Bridges gone, watersystem's shot, no rail systems, hospitals being shut down, farmers going bankrupt, etc.
The above list make up the real economy while the "money culture" which has been ballooning is fake.
But this isnt a housing crisis, what's happening is an existential crisis is taking place inside the United States after decades of an increasingly degenerate economy and culture.
Todays popular culture in the United States is by far the worst culture in our nations history. There has never been anything like this before in our history.
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