HousingPANIC Glimpse of Reality of the Day

"The demand for mortgage brokers in Las Vegas was so strong that "every stripper, waiter and bartender on the Strip had a broker's license"

- Boyd Nyborg, a former mortgage broker who now tends bar at the Tao Las Vegas.

(We just knew HP'ers. We just knew.)

When we look back at the housing crash years from now, it'll be the unlicensed mortgage officers most to blame

Realtors are licensed

Appraisers are licensed

Homebuilders are licensed

Banks are licensed

People who drive cars are licensed

Fishermen are licensed

Strippers (in AZ) are licensed (so I hear)

Yet the one group who had the most to do with the housing bubble, "mortgage officers", have no regulations, no licenses, no rules, no oversight, no nothing. Just get the sale at any cost, make the commission, screw the buyer, and move on.

And look where that got us to today.

The system got gamed. An unregulated rouge collection of con men, swindlers, call center jockeys, bartenders, strippers, used car salesmen and generally the scum of society banded together under the seemingly professional title of "mortgage broker" and "mortgage officer" these past few years and screwed America.

And nobody in government thought it would be a good idea to step in.

Hmmm... maybe because the National Association of Mortgage Brokers, the National Association of Realtors and the National Association of Homebuilders, who wanted to maintain the status quo, have your corrupted leaders in their pockets?

Here's a report from the cesspool of mortgage fraud and fraudsters, Phoenix Arizona:

Rules sought on mortgage officers
Bill to require licensing would help curb fraud, backers say

Many of the people in Arizona who help home buyers finance what is often the biggest purchase of their lives are not licensed. In the rapidly growing mortgage industry, many of these unlicensed people who handle home loans can put consumers at risk.

It's estimated that there are as many as 18,000 unlicensed people taking mortgage applications, negotiating rates and getting loan commissions statewide. Many are enticed by the Valley's housing boom, exotic and often risky mortgages and no licensing requirements.

"I know of mortgage people working out of their bedrooms and selling stereos on the side. They got into the business six months ago and don't know a lot about it. They can give the industry a bad name," said Rick Allen, a branch manager with the Valley mortgage firm O'Dowd and Associates.

Crashing prices, decaying empty unsavory neighborhoods and housing quickly turning into the American Nightmare

It's sad to see families get into housing and flipper neighborhoods at the exact wrong time, falling for the slick marketing brochures and ads, and now facing a total freaking nightmare. But of course, they'll blame everyone but themselves for the mess they put themselves in.

Note - I'm short KBH at time of writing, since they build cheap neighborhoods like these that people will no longer want, their buyers are (were) more subprime , and they were crooked at the top.

And the chart above is the Zillow of the KB Homes house mentioned in the article.. Ouch. Remember new home buyers and current homedebtors - the builder will f*ck you every time.

Lodi homeowners find dream neighborhood not so charming

Scott McClarrinon says he was duped.

The 31-year-old Galt native thought he was buying into a dream when he and his wife purchased their home at The Villas of Lodi in November 2005.

He imagined he would raise his family in the two-story stone and stucco home at 455 Tuscolana Way. His home is tucked among 80 residences at the tastefully designed subdivision, complete with stately light posts and cobblestone courts.

Yet as soon as McClarrinon moved in, his dream and his neighborhood began to crumble.

The homes that had been snatched up so quickly at the peak of the housing boom sat empty for months at a time, with their owners nowhere to be found.

Green lawns turned to brown, left unkempt in the hot spring and summer months. Tall weeds began to sprout in place of neatly landscaped front gardens. "For sale" signs popped up throughout the neighborhood, replaced later by "for rent" signs. Pigeons began to roost on top of abandoned homes, leaving a mess below.

McClarrinon's vision of a vibrant community of homeowners — as promised by builder KB Home — vanished.

"There's just not a lot of homeowners here," he said this week, noting that his neighbors now consist of renters, from a trio of exotic dancers next door to a group of five young men nearby who throw loud parties late into the night.

"I'm so mad. I'm just mad," McClarrinon said. "My property value has dumped ... I've got the worst of both worlds," he said.

22 year old stripper with $2.4 million in debt and 10 foreclosed houses. An REIC spinning out of control. And an epic, devastating housing crash.

Folks, if you haven't gotten the message yet, you really should right about now.

You have witnessed the end of a giant fraud-enabled housing bubble now ending in an historic housing crash that will shake the world.

Ask yourself why places like Phoenix, where housing price increases barely kept up with inflation for decades, all of a sudden, out of nowhere, shot up 55% in one year.

It was fraud folks. Pure unmitigated, unchecked fraud. With a dash of greed of course.

A wave of fraudsters, flippers, investors, and locals caught up in a grand Ponzi Scheme. One giant STD of call center jockeys, strippers, bartenders, realtors, infomercial salesmen, used car dealers and the rest gaming the system, committing mortgage fraud on a massive scale, falsely and temporarily inflating home prices, sucking cash back out of the deals in a massive bank robbery, all under the corrupt and ignorant eyes of regulators, Congress and the media.

And then it ended. Suddenly.

The funny thing is that the 22 year old stripper didn't end up holding the bag. Sure, her credit is wiped out, and she'll be back on the pole. But it's the pension funds, the hedge funds and China who ended up getting burned in the deal. Plus any unsuspecting and underwater homedebtor who listened to a realtor on commission and bought in 2003 - 2006, and neighborhoods blighted by her foreclosures.

22 years old. $2.4 million in debt. Admitted mortgage fraud. 10 foreclosed houses. I think this stripper could be Casey's alter ego!

How many more are out there folks? Jail time anyone? Anyone? Anyone?

'Straw buyer' deals fuel tidal wave of foreclosures

She was 22 and tired of exotic dancing for a living. So Irene Thomas bet her future on real estate, hoping that becoming a landlord would be her first step toward exiting the stage.

With the help of Universal Mortgage Inc., a brokerage company in Brooklyn Park, Thomas signed the papers to buy a house early last year. And she kept signing. And signing.

In 90 days, with none of her money down, Thomas had $2.4 million in debt and 10 houses in her name, most in north Minneapolis. Nine belonged to officials of Universal, the same company that handled the transactions for her.

Less than 18 months later, Thomas was losing every property to foreclosure after the monthly payments weren't made. Her credit ruined, she now says she was duped by a group of real estate insiders who sold houses at inflated prices.

The practice is so commonplace that real estate experts say it is helping fuel the nation's foreclosure epidemic, which is destabilizing neighborhoods as home after home is lost to banks and other lenders.