Foreclosures, mortgage fraud and crime - welcome to America, post-housing-disaster

These two stories really sum it all up. Rampant mortgage fraud, cash-back-at-close scams, realtors, mortgage brokers and appraisers on the take, and now cities (and homedebtors) are paying the price.

Prepare to cringe. Post-housing-crash America ain't gonna be too pretty.

Empty Houses Home to Crime As Loans Fail - Neighborhoods Suffer As Crime Follows Foreclosures Into Vacant Houses

Eighty-five bungalows dot the cul-de-sac that joins West Ontario Avenue and East Ontario Avenue in Atlanta. Twenty-two are vacant, victims of mortgage fraud and foreclosure. Now house fires, prostitution, vandals and burglaries terrorize the residents left in this historic neighborhood called Westview Village.

"It's created a safety hazard. And if we have to sell our house tomorrow, we're out of luck," said resident Scott Smith. "Real estate agents say to me 'We're not redlining you, but I tell my clients to think twice about buying here.'"

"They've seen a lot of prostitution in the area, vagrants wandering in and out of the empty houses and drug activity," said Officer Dakarta Richardson of the Atlanta Police Department. "Some people that I talked to are afraid to walk out of their homes at night."

During the boom, the suburb just south of Sacramento sprouted 10,000 homes in four years, attracting investors from the San Francisco area. Now many houses stand empty, weeds overtaking lawns, signs lining the street: "Bank Repo," "For Rent," "No trespassing -- bank owned property." A typical home's value has dropped from about $570,000 to the low $400,000s.

Miami condo at ground zero in mortgage fraud

At first glance, the 43-story building in Miami's international banking district seems little different from other high-rise condominiums overlooking the turquoise waters of Biscayne Bay.

But the 643-unit condo known as the Club at Brickell is a leader in mortgage foreclosures and it appears also to stand at ground zero in a blizzard of fraud that may lie behind many of the failed loans threatening to bury the U.S. property market.

Mortgage scams involve a cartel of inside players -- colluding property appraisers, real-estate brokers and accountants willing to draw up fake income statements and tax returns -- who recruit people with good credit histories to serve as a decoy or "straw buyer" in a real-estate deal.

The conspirators inflate the price of the property, to get the biggest loan possible, pay the sellers the original price and then pocket the excess loan money as "cash back" at the closing of the deal.

Doug Dewitt, a real estate broker contracted to work with several lenders on the valuation and disposal of foreclosed properties, said nearly 70 percent of the sales or closings at the Club over the last 18 months were questionable.

That works out to more than 200 possibly shady deals in a single building, he said.

The dubious transactions all fit a pattern that Theobald said should trigger "bells and whistles" for law enforcement anywhere -- time and time again properties that failed to sell for months when listed at around $450,000 were pulled from the market and then suddenly sold for more than $800,000.

Failed flipper mortgage brokers give up after housing crash, open brothel, then get arrested. Nope, you can't make this sh*t up.

The only thing we got wrong in our predictions is that we thought the mortgage brokers THEMSELVES would become the prostitutes (or go back to being hookers). I guess that comes later. Here's the story of two failed mortgage brokers, who also failed at flipping, and now who've failed as brothel owners. Ah, their parents must be proud...

Just when you thought the mortgage profession couldn't fall farther in America's eyes, we get this. But then again, you know there's a bunch of 'em now out there selling drugs to kids, robbing banks and doing whatever else they can do to keep the good times going. Because we all know mortgage brokers (and realtors) are low on the "ethics" scale.

However, I do think "Pimp" is one step above "Mortgage Broker"...

(CBS) NEW ROCHELLE The downturn in the housing market appears to have driven two Westchester homeowners to desperate and illegal measures.

New Rochelle Police raided a 3-bedroom home on North Avenue Friday night arresting four alleged prostitutes and the homeowners.
The house, they say, had been turned into a brothel complete with heavy shades over all the windows and a red ribbon placed out by the sidewalk to indicate they were open for business.

Richard Werner and Heather Mezzenga are charged with promoting prostitution. The two are both mortgage brokers who moved out of the house roughly two years ago so they could begin renovating a home on Mountain Road in Pleasantville.

New Rochelle neighbors told CBS 2 the house had originally been listed for $750,000 but didn’t sell even after the price had been dropped to $600,000.

David Saperstein said, “He couldn’t get his price, then he rented,” but a series of families came and went and the house fell into apparent neglect until new occupants apparently arrived two weeks ago.

Ladies and Gentlemen, I give you "Toni - The Mortgage Broker Hottie ;-)"

Hat-tip to housing-boom blog and an eagle-eyed HP'er for bringing us this gift.. And to Toni - The Mortgage Broker Hottie ;-) herself, for being such a nice representation of this unregulated, untrained and unnecessary business.

At what point did "mortgage broker" even become something society needed? Remember when we had banks? Remember when you knew your banker and he knew you? And wouldn't the internet do a better job than an untrained and unregulated bartender?

Is there any question now why the cocaine-fueled poser cities of Phoenix, Vegas, Miami and San Diego became epicenters of rampant mortgage fraud and historic housing bubbles?

Well, at least Toni - The Mortgage Broker Hottie ;-) has a fallback position.

Be gentle HP'ers... she's just a girl trying to make a buck...

Toni - The Mortgage Broker Hottie ;-)

About me:

Hi guys, A little about me: Well Im a Mortgage Broker able to close both residencial and commercial loans in 42 states.

I love my job because I get to help people get buy homes or refinance them. In the process I also get to make some money.

On the side I also plan events and parties in best place of all... Miami Beach. Im a night club promoter so if you need to get on my guest list, just let me know. On Thursdays Im at Cielo, Fridays at Dek 23 and Saturdays at Glass.

Who I'd like to meet:

Im always happy to meet new people. Anyone whos in the mortgage or realestate business, anyone whos into the nightclub industry. Basically everyone. So send me a friend request and I might just accept it...lol