HousingPANIC Classic Quote of the Day

"The stuff I did is technically mortgage fraud, but it's not officially called that until someone prosecutes me and proves that that is indeed mortgage fraud"

- Casey Serin, June 2007 (still waiting... still waiting...)

Want to know another reason why the world financial system is now crashing? Because the IRS simply didn't do their job.

When it comes to all the real estate agents, mortgage brokers and appraisers who took kickbacks these past few years and didn't report them as income, all the housing gamblers who flipped homes they didn't live in (and said they did) or who took cash-back under the table, and all the massive mortgage fraud seen all over the land, I have one question:

Where the hell was the IRS?

You'll note for ALL OF 2007 the IRS initiated a whopping 337 investigations. Nice work lazy government. That's only about 999,663 too few. And don't get me wrong - I hate the IRS and want a complete overhaul of how taxes are paid (consumption vs. income). But we do need the one agency in charge of investigating tax fraud to, well, investigate tax fraud.

The United States is no longer a nation of laws HP'ers. We're a nation of illegal behavior run amok, where crime pays, honesty and integrity are penalized, and our government continues to fail us at an alarming rate. And now the world pays the price.

Part of any "housing crash stimulus" bill should be a few billion for the IRS to hire thousands of investigators whose purpose it should be to investigate all of the housing transactions of the past few years for fraud. All of them. Start with the stated income loans - just compare the number the IRS had with the number on the loan document, and you'll have hundreds of thousands of cases of fraud right there.

From the IRS website. Too bad they didn't do what they said they do. My guess is they've got two people in the basement looking at mortgage fraud.

Special agents with IRS Criminal Investigation are uniquely equipped to investigate these types of mortgage fraud and illegal real estate crimes because they are skilled financial investigators whose mission is to 'follow the money.'

Some of the common real estate fraud schemes include:

*Property Flipping — A buyer pays a low price for property, and then resells it quickly for a much higher price. While this may be legal, when it involves false statements to the lender, it is not.

*Two Sets of Settlement Statements — One settlement statement is prepared and provided to the seller accurately reflecting the true selling price of the property. A second fraudulent statement is given to the lender showing a highly inflated purported selling price. The lender provides a loan in excess of the property value, and after the loans are settled, the proceeds are divided among the conspirators.

*Fraudulent Qualifications — Real estate agents assist buyers who would not otherwise qualify by fabricating their employment history or credit record.