April 25, 2008

This is what the end of a Ponzi Scheme looks like. And these are the housing gamblers who better not get a penny of taxpayer money.

Destroyed housing gamblers.

Failed flippers.

Exposed mortgage fraudsters.

Homes as lottery tickets.

The vast majority of people "losing their homes" are not the innocents portrayed in the media or by Hillary Clinton, taken advantage of by "predatory lenders". They're just your typical losers, chain smoking at the casino, hoping against hope for 'the big score' that never came. They're gambers who bet and lost. They're people who committed mortgage fraud, yet won't see a day in jail.


Thanks Seth for the link... Great series on the crash at the Minn. StarTribune. Read 'em all, and you'll be especially enraged with the rampant illegal cash-back schemes that were out there. Crime paid HP'ers, even for the gamblers going into foreclosure. Why? They got to keep the cash, and mortgage fraud isn't a crime anymore in the United States.

Housing bets gone bad

Wright County was a haven for speculators -- until they got burned in the downturn.

Across the country, from the desert suburbs of Las Vegas to the treeless subdivisions of Wright County, many homeowners face a predicament of their own making.

They gambled big that housing prices would continue to shoot up. Some bought homes as often as others buy new jeans, occasionally in return for thousands of dollars in kickbacks. These investors ranged from small-town working people looking for a quick payday to sophisticated real estate professionals who bet with other people's money, occasionally defrauding lenders in the process.

Now, with home prices falling and mortgage payments rising, panic has set in. Investors are dumping houses on the market before prices collapse further, or simply turning the keys back to the lender. That, in turn, is dragging down values for even longtime homeowners, wiping out the equity they'd built up over the years.


Anonymous said...

He should have stuck with ONE home.

Russ DoGG said...

Didn't give scant mention to the renters of those houses- who were obviously forced out with short notice.

then the housing gambler tries to make it seem like those nasty renters screwed him over by leaving hte place in a mess.

This reporter doesn't seem too objective. that asshole flipper/gambler deserved the dog piss that was left for him to clean up.

Mark said...

Then Collin gets to thinking about his debts, and the decision he and his wife made three years ago to invest in a get-rich-quick real estate scheme in Wright County. Last year, four houses that he bought in Otsego -- for a combined $1.2 million -- sank into foreclosure.

This article does tell it like it is...

Anonymous said...

People in foreclosure are not going to "lose their homes"; they'll lose merely an overpriced house they can't afford. If they have jobs, they can always rent their HOME.

miner_tom said...

Sorry if I seem cold and unsympathetic, but without morons like Collin, fraudulently purchasing many houses with really cheap money, housing, as we knew it, can not "come back".

Anonymous said...

THANK YOU KEITH. It's about time someone sheds light on those individuals who tried to use the system to their advantage and now want someone else to pay when it didn't work out in their favor! Finger pointers never see their own contributions to the problem do they????

Tom said...

Great example of over-indulgence; but if you think this is the typical story - you aren't in the right zip code buddy.

Anonymous said...

I'd like to see that same shot on Wall street with thousands of thousands of Brooks Brothers clowns standing amidst piles of manila folders.

Anonymous said...

Painting contractor my As*, making 60,000 a year and living in a trailer house. I've been a painter for 20 years running my own show. These punks are low rent con artists who don't know what a brush or roller is much less a sprayer. What kills me is this punk has never paid taxes his painting but walks away with 20,000 cash and he will not have to pay taxes on that. Yaaaa, I feel real sorry for you, yopu sleaze bag.

AZDavidPhx said...

wiping out the equity they'd built up over the years.

There was no equity to be wiped out! They did not build up anything! It all went to pay interest on their gambler loan. All that "equity" was nothing more than bubble wealth.

You have to actually pay down your mortgage to get equity. Not pay interest only for a few years and expect the house value to increase the equity for you!

Anonymous said...

Ha Ha! At least he didn't resolve to doing what these landlords did!



Anonymous said...

Hey, last time I checked, Obama is for a bailout, too. I hope you do the right thing Indiana and NC by not voting to the fake Messiah Obama, who will destroy the American middle class with taxes in order to support the welfare parasites here and abroad. It's in the 20 points of Rev Wright and Obama's church, remember?

Don't vote for the most liberal person in Congress, a true communist. We don't have money to be supporting breeders in Africa and in the Caribbean, as Rev Wright and Obama want.

FACT: The only bill from Obama in the Senate was to give $1 trillion of taxpayer money to Africa.

FACT: One of the 20 goals from Trinity United Church of Christ, the church that Obama attended with Rev Wright for 20 years, is TOTAL COMMITMENT TO AFRICA.

Sorry but let the Europeans help Africa because they're the ones who had a zillion colonies there, not Americans. Let them deal with it because our country is broke.

Anonymous said...

Maybe whomever wrote the article should KNOW more about the industry and the matrix that banks use to "work up" a loan. I work in mortgage title. Had a steady income for more than 5 years with PERFECT payment history. Took out a 2/28 using the cash out to work on the home (35k out 35 back into home. When the adjustable hit..Market prices has fallen, my LTV (loan to value :for the pompas ass who wrote the article)had dropped well below refinance stage, then making HALF of the money because of the industry, add on a bogus sewer assessment (making my taxes 5 times 07) the DTI (debt to income) was so far out of wack...THERE is no way to fix the problem, the only one who could would be the bank (who did their own appraisal for the 2/28)and they refuse to work with me. Maybe I SHOULD have gambled away the money..Remembering the OLD (OLD) attage...Your home will always gain value...Not in this USofA where the banks control the money and have caused this drop inproperty value across the country. Wonder how much money they will be lending this time next year since EVERY short saleand forclosure sale makes EVERY home worth less and less. Work with the AMERICAN people. A percentage of 0 is 0 no matter what the rate is!!!!

Anonymous said...

he spent 1.2 million for 125,000 in value because no one left would sell themselves into slavery for his attempted gain

Anonymous said...

It isn't the borrowers being bailed out. It's the dumb ass banks that made the loans in the first place.


ZZwcck said...

Guess what the Minnesota realtors are playing on the radio right now?

"The average home doubles in value every 10 years."

The realtors up here have just decided to ignore reality and lie their asses off.

-- Oh, I should say in my older neighborhood with decent household income (70k+) homes under 250K are selling. Homes are normally 3bd, 2 bath with 1800 sqft. Tiny compared to the ones in Wright county, but it's 10 minutes to either downtown, not an hour.

Anonymous said...

A lot of the buyers were flippers. I've read statistics, (whatever they are worth!), saying it's estimated that 40% were "investors," not people intending to live there. I'm sure that figure varies by state, as some states were hotbeds of flipping, and some really were not. However, whether they bought to live in it and flip in a year or two, or bought multiple houses to flip as a 'business,' they're still using housing as a ponzi scheme. Then you have buyers who did intend to live there a long time, maybe it was their (ugh, I hate this saying), "DREAM HOUSE." They may have bought way more than they could afford--either choosing to believe the industry baloney that coerced many buyers into these deals, or whatever. Some were really that ignorant and their trust in the industry to tell them what they could afford was misplaced. Others actually were victims of mortgage fraud. We're talking about forgery and the whole works.

But regardless of how ignorant, gullible, or even crooked and greedy some of these "buyers" were, there is one fact that keeps standing out. The industry had to be involved on a huge scale for it to escalate and be carried off at all. The FBI reported that 80% of mortgage fraud is done by industry insiders. There is a mortgage fraud book out, written last yr, that says about the same thing. The industry was a necessary player to pull it off. Also the industry created the toxic loans and aggressively marketed them. The industry coerced appraisers to meet the (ever increasing) number. Documents were forged, loans were approved, then sold, then rated as good investments, then snapped up by investors who didn't bother to investigate what they were buying. Again, they were all relying on THE INDUSTRY to be ethical, correct, or whatever, so that everything would keep working. This was a scam that could never work.

There were warnings about this being a ponzi scheme years in advance and no one in power to do anything cared.

The housing bailout now in congress was never for consumers and it isn't for them now. It's a multi-billion dollar bailout for the INDUSTRY, and many of the homeowner provisions aren't even in it anymore. As usual, corporate lobbyists got a bill with a consumer-friendly-sounding name that is anything BUT a consumer bill. The bill will be a waste of money so that a few wealthy CEO's can grab a few more millions before the music stops again.

There should be no bailout in my opinion. If we can figure out who really was a victim of fraud then help them the way law enforcement should've been helping them years ago, but didn't. Now that banks and builders and investors are screaming that they're the victims, the govt wants to help the industry, but it never was helping consumers. If it had been, this problem could've been averted years ago.

mairca izda debol said...

BWHAHAHAHA where's the bleeding heart liberals now? Screw the borrowers and lenders. Let them eat mud pies

Dr. K said...

That has got to be one of the ugliest front elevations I have ever seen on an SFR. Gives new credence to the term 'shitbox'.

Anonymous said...

Backlash against housing bailout

sign the petition
We are all now bitter renters.


Anonymous said...

Hey, last time I checked, Obama is for a bailout, too. I hope you do the right thing Indiana and NC by not voting to the fake Messiah Obama, who will destroy the American middle class with taxes in order to support the welfare parasites here and abroad.

Then you might as well not vote at all since Hillary has a similar plan to bail out housing. Remember her "freeze interest rates for 5 years" idea?

I am sorry, but with the pack narrowed down to Obama, Hillary or McCain, I have to now put my money towards McCain. I disagree with his viewpoints in immigration and the Iraq war. But he is far more realistic when it comes to not taking drastic steps to bail out housing when it simply should be left to correct on its own.

Maybe we will get lucky and he will appoint Ron Paul to run the Fed.

Anonymous said...

I disagree with his viewpoints in immigration and the Iraq war

Obama and Hitlery want amnesty for 30 million illiterate illegal aliens and open borders so we can feed, clothe, house, educate, and give medical care to all of Mexico. I'm NOT voting for that kind of change. That will do more harm to the USA than the Iraq War. The Southwest is being turned into a urine-drenched, gang-infested barrio.

mairca izda debol said...

The regular foreclosure numbers are not that high. There is an average of 600,000 foreclosures in a "regular" year. If you remove the number of specuvestor foreclosures, which is as high as 50%, the foreclosure numbers are back down just above 600,000 again. All these poor schmucks "losing their homes" never owned it nor lived there in the first place. The bailout is for the bankers who are weighed down with garbage debt on their books.

gregoryw said...

Get ready for utility panic:

"Xcel Energy says 17%-19% of its 1.1 million Minnesota customers and its 280,000 Wisconsin customers are behind on their utility bills."

tater said...

Keefer's article said: small-town working people looking for a quick payday to sophisticated real estate professionals who bet with other people's money,

Hey Keefer,

This is spot on. These real estate agents and brokers are the first to see these listings coming on the market. Most times, the listing realtor has an investor that he/she will call when they sign a listing agreement with a seller. Or, if they have a real-estate agent cohort that's flipping houses, they give them a call. The investor or agent looks at it, and decides if it's a money-maker. If it is, then the investor grabs it. The average Joe thinks that the listings on the MLS are "fresh off the grill". That's bullshit. These listings have, most likely, been sent to 3 or 4 investors before they even hit the MLS. The real estate agents then get the sheeple into the buying frenzy, and BOOM! we have a sucker sheeple stuck with another overpriced home.

And, guess what? They're starting all over again. The houses that are being foreclosed and sold, are being google-eyed by investors, who buy them up to "flip" them at higher prices. "Lease-purchase" is in full swing these days. And, the real-estate agents are right there, with their hand out, looking for a commission at each flip.

We've already started another future housing bubble - all with the same, recently-foreclosed homes.

The bad thing about it is that the worthless real estate agents are getting paid coming and going. I would call it "rewarding the perpetrators'.

Same sad story - same sorry results

Anonymous said...

I'm not sure the new wave of boom times will happen anytime soon.

Visiting my son West of Indianapolis. This is an area of low median priced priced homes compared to the rest of the US. Here the high priced homes are in a slump becasue none can get a mortgage with 10 or 20% down. FHA limits are still too low.

Per capita income has to grow a lot. All the rust belt areas are in for a very slow price growth period.

Anonymous said...

Maybe we will get lucky and he will appoint Ron Paul to run the Fed.

Are they handing out free drugs at the Republican Crack House tonight?