He might have to blog from the safety of Russia, but I believe the kid is going to go back up. Got scared off after his corrupt mortgage broker tried to put the screws to him
"If I go down you go down" - isn't that how it plays out in the movies?
Seth at Motley Fool picked the story up today (tipped off by HP but didn't credit us). Here's the full article. Nice to see HP having an impact, even if we're not properly credited by the MSM...
24 Years Old, $2 Million in the Hole
So, have you heard the one about the 24-year-old "real estate investor" who's $2 million in debt and still hasn't gone back to his day job? No? Alas, you may never get the full story. Last week, a Californian named Casey Serin started a blog called "Iamfacingforclosure.com," detailing how he got himself half a dozen sinking properties and $2 million in debt. By today, he'd pulled it off the Net, with good reason.
The quick version of the story is this. After taking some courses in real estate investing, this eager kid lied his way into a slew of loans he, admittedly, didn't deserve, and now that he's bleeding to the tune of $20,000 a month, and the housing market is crashing around his ears, he thought taking his story to the Web might somehow help.
A part of me still wonders whether or not this wasn't just a somewhat elaborate hoax, but if it's not, this kid is in deep trouble. Admitting to serial lying on loan applications might be enough to get forgiveness from our short-attention-span society, and it might get you a few "attaboys" from the easily impressed. But I doubt this kind of naive, public forthrightness will serve Casey so well should any of these lenders haul him into court for fraud. (For those who just have to see what was there, a few Web searches will still turn up cached pages.)
Denial: Not an African waterway Even if this is/was just a piece of Web 2.0 performance art, it's not too tough to believe that there are other people in the same situation. If you read between the "Dude, you're going to jail" comments on the site, you might have gotten the uneasy feeling, as I did, that the lesson's not sinking in.
Try this on for size. "You can't buy this kind of experience," wrote one reader. "Seriously it's not the end of the world. No one who ever amounted to anything did it first crack out of the box." It wasn't the only comment along those lines.
With attitudes like this so prevalent, why don't I believe things are going to clear up for people like this any time soon?
Gekko was wrong. Greed ain't good. The problem here isn't real estate per se, nor bad lending.
Well, let's back up a step. If the information on that blog was genuine, Countrywide Financial(NYSE: CFC) and Citigroup(NYSE: C) made some very stupid loans. If Countrywide did, as alleged, make two loans to an overextended "self-employed" 24-year-old with nearly zero assets, will anyone else out there be surprised if its loan book becomes absolutely rank in a few months?
Greed makes you stupid. On a more philosophical level, here's the real problem: People can't help themselves when they think they know how to get rich quick. How quickly they forget. In 1999 and 2000, everyone was a tech-stock wizard. Everyone knew that the bandwidth appetite would keep Cisco(Nasdaq: CSCO) stock shooting toward the moon. Everyone knew that the emphasis on network architecture would make Sun Microsystems(Nasdaq: SUNW) the next IBM(NYSE: IBM), only better.
Of course, the crash proved that the only thing we really had was a rising tide floating all those boats. And it receded at warp speed, leaving plenty of amateurs stuck in the muck. I suspect we're going to see a similar problem in real estate, as more amateur flippers like Casey find themselves backed into a corner. The difference is that this might take longer to unwind, and the consequences could be a lot worse.
After all, real estate isn't so liquid. Sellers anchor to what they paid. Buyers have no reason to rush in at the front end of the crash. Incentive schemes dreamed up by realtors, sellers, and homebuilders like Ryland(NYSE: RYL) prop up prices. Lennar(NYSE: LEN) keeps building despite the writing on the wall. As a result, it will be months before we see a real "correction."
Moreover, unlike most amateur stock players, who are only gambling with cash on hand, the new real estate speculators depend on huge slugs of leverage. Lose everything on your pile of tech stocks, and you're back to zero. Lose everything on leveraged real estate, and you move deep into negative territory. There's nothing like owing $600,000 on a home that's now worth $470,000 to make you wonder why they invented the option ARM, or the 40-year mortgage. You think it was to do you any favors?
Foolish bottom line Let me break it down for you. If you're a twentysomething out to make it big in the world, do yourself a favor and slow down. If you're wearing flip-flops and low-riding jeans to closing, I'm talking to you. Real riches come over time, not overnight. You need to start with a clean financial house, make smart bets, and save your money sensibly.
Twenty-four years old and $2 million in debt is no way to start your future. It's amazing to me that anyone could ever think otherwise.
September 25, 2006
HousingPanic Exclusive: The Iamfacingforeclosure.com kid is gonna put his site back up, was threatened by his mortgage broker
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23 comments:
"was threatened by his mortgage broker" - I missed this one. Did Serin say that?
keith, just leave the kid alone.
C'mon people! Let's give Casey a break. He had a vision for something great and he tried his best to make it happen. Not every business succeeds, in fact many fail. He had the guts, the vision and the nerve to be great.
Anon (casey) give Ken Lay & Jeffrey Skilling a break, they had a vision and went for it. So what if innocent people get screwed, they had good ol american moxie.
OOooohhhhh, threatened by his mortgage broker! OOoooohhhh!
C'mon people! Let's give Casey a break. He had a vision for something great and he tried his best to make it happen. Not every business succeeds, in fact many fail. He had the guts, the vision and the nerve to be great.
++++++++++++++++++
Casey's "business" was built on fraud. In fact, I wouldn't consider it a business at all. Let's call it what it really was: a scam.
He had a vision?
Well he needs lasik as well!
I have visions all the time....but i don't act on all of them!
"Seth at Motley Fool picked the story up today (tipped off by HP but didn't credit us)."
The reason why you don't get credit is because you weren't first with the story. A poster on Ben's blog had this before you did!
Why isn't Keith calling for Casey to be deported? By all accounts, he is an immigrant who committed a felony.
For my take on the Casey Serin saga, check out my blog. And no, it's not a ream Casey job like they did on Ben Jones blog.
Why isn't tabasco jenkins calling for illegal immigrants to be deported? They are immigrants who broke the law
first hp post: 9/21
paranoid ben's first blog post - he hasn't out of paranoia of having to credit HP
HP broke this story for the bubblesphere. deal with it.
Kieth they most likely picked it up from the bigpicture blog.
I have no problem believing that Countrywide made some of these loans. They made my loan, and did NOT verify:
-Employment
-Income
-Assets
-Mortgage or rental history
-Occupancy
Just a 680 credit score and 5% down gets you a conforming, fixed rate (with PMI). I thought it was kinda scary, but was glad I was able to do it.
Well well well, I see that the chickens are finally coming home to roost.
Keith is correct in assuming that there are many more little Caseys out there. Up untill last year, I had been a mortgage loan officer for the previous five. In that five years I saw many people start new "businesses" that were doing the same basic thing little Casey was. And this was in the midwest, we hav'nt seen prices decline in my neck of the woods yet, but I think we are getting close. I hope all the new "business men" remember the words I spoke to them before that time arrives: "Don't be the one holding the hot potato when the music stops, and stop it will" I doubt if many will though. I'm almost thankfull really. You see, In my opinion, the jewish banks that made these loans deserve all the hardships they will endure taking back possesion of the over leveraged properties. I just hope we don't let them escape this time, like we did during the last great depression. This country could sure use a lot more windchimes, and these swindling bankers are just the people to make them. Always remember, hold the people that invented the system responsible, not the people it traps. History is repeating itself again folks, lets break the cycle once and for all.
CountryWide and that gang is responsible. Casey would of bought and sold cocaine or whatever 'bluesky' was presented to him. In the long run it's gotta be the person who approved the guidelines for the loan that must be jailed along with Casey, just as the major drug distributors would be held responsible. If you wrote the guidelines for a no,no,no, loan, you know that it's the last grasp at salvaging your upper echelon job. You also know that Casey doesn't make what he does, and that postmen and butchers don't make $9k monthly [an fractiously small exception to this statement do], but you wrote the guideline out of sheer greed, KNOWLINGLY accepting loans from Casey. It's the knowing contribution to the crime that will prevail. It's all we have against the tobacco industry, it's what we'll have against the mortgage industry. The difference is there is no smoking gun in the tobacco industry as it's all disputable with scientists on both sides. There's an aproval signature on those guidelines.
He changed the message again:
Stay tuned...
I just wanted to share my experience. Didn't mean no harm.
Now I need a good attorney (preferably one that's internet/blog savvy), QUICK!
Casey Serin
Looks like a joke.
I can't believe that anyone could suggest that the lenders are responsible for this sort of behaviour. Granted the great mass of Americans are in general innumerate. But that does not excuse their fundamental responsibility to actually think at least once or twice a year. The lenders are responsible only to their shareholders for losing money...
"Casey's "business" was built on fraud. In fact, I wouldn't consider it a business at all. Let's call it what it really was: a scam."
First of all, it's not Casey's fault. It's the Banks fault for lending him all that money. Second if he would of done what he did two years earlier he would of been a millionaire at 24 and considered a genius. Most people that are successful had to take risk and work the system to achieve the required end result. In my opinion, the problem was his timing and that he took too much risk.
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Hat tip to L for spotting this news release [1] earlier today announcing that the US (in the person of F&F’s regulator OFHEO) would be pursuing civil charges against three former Fannie Mae executives.
“The 101 charges reveal how the individuals improperly manipulated earnings to maximize their bonuses, while knowingly neglecting accounting systems and internal controls, misapplying over twenty accounting principles and misleading the regulator and the public. The Notice explains how they submitted six years of misleading and inaccurate accounting statements and inaccurate capital reports that enabled them to grow Fannie Mae in an unsafe and unsound manner. The misconduct cost the Enterprise and shareholders many billions of dollars and damaged the public trust,” [OFHEO Director] Lockhart said.
I told you the big guys were making those wank programs just to save their job! Looky here! Who's goin to jail. no the little guy
Hat tip to L for spotting this news release [1] earlier today announcing that the US (in the person of F&F’s regulator OFHEO) would be pursuing civil charges against three former Fannie Mae executives.
“The 101 charges reveal how the individuals improperly manipulated earnings to maximize their bonuses, while knowingly neglecting accounting systems and internal controls, misapplying over twenty accounting principles and misleading the regulator and the public. The Notice explains how they submitted six years of misleading and inaccurate accounting statements and inaccurate capital reports that enabled them to grow Fannie Mae in an unsafe and unsound manner. The misconduct cost the Enterprise and shareholders many billions of dollars and damaged the public trust,” [OFHEO Director] Lockhart said.
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