Seattle Bubble Forum Archive

What get's really old about these stories is the part where the defendant had no idea they signed something with ridiculously fraudulent information on it.

I don't care how bad this woman's education is. When you fill out mortgage documentation they tell you what your monthly payment will be, if you make less than $1500 a month and they tell you your mortgage payments will be in excess of $5000 a month, you are responsible for noticing those numbers don't add up.

How many years do you suppose someone like this ends up doing?

I received a visitor on one of my websites yesterday who pointed out that Vladislav was a student of mine and thought what he said regarding ethics on my blog was interesting.

Vladislav's comment is fifth up from the bottom:
http://mortgagefiduciaries.com/2008/06/ ... mment-1443

However, I think what he says on this post is even more interesting. 12th comment up from the bottom.

http://mortgagefiduciaries.com/2008/06/ ... lic-radio/

Why are only the feds acting? I thought Washington had enforcement agencies to monitor and enforce mortgage laws?

Hi Thomas B.

If the consumer complaint or investigation starts out at the state level and the state examiners discover that the fraud crossed state lines, they bow out and give the case to the FBI.

When a loan funds, money is transferred from one state to another via wire so they get them on wire fraud.

The FBI is also the enforcement mechanism for HUD.

The person signing the loan documents is signing as the buyer. Read all of the documentation and you may find that the person who signs the documents meant to default.

Here's how it works. The seller has a loan for a million. They bought the house from a person who has a loan for $750K. The seller is selling for $1.5 million to some one who can afford to take the hit to their credit. The buyer can some times be paid or told they will be selling the home for $1.7 million in a few months.

Either way the people who set up these progressive sale loans usually have a stake in the proceeds.

While working this evening it occurred to me that the point being missed is that the bank is more creating paper to be sold to the secondary market rather than making loans.

The buyer or signer on the note makes little difference to the bank. The bank simply needs plausible deniability. The loan originators were instructed to generate loans. That is the term Loan Originator, it is plausible deniability. We blame the buyer, the Loan Originator, or the seller or Real Estate agents, but the bank makes the money.

We are now looking at who is left holding the remainders in the bag, but along the way banks, and investors made tons of money.

The loans were sold in bundles. Those bundles became the basis for profits that made the stock market look good. You bought stocks in companies that showed paper profits. Now you pay, but the buyer was only a very small cog trying to make a couple of bucks.

If it's common knowledge then why is the focus on the buyer in these comments? For that matter why is the loan originator the villian?

The banks always seem to get a free pass. People talk about bank losses, or getting credit moving again. The perps are the ones who engineered this system.

These people worked the system less complex then David "thinks".
Owner X knows their house is worth $500k. LO and Owner are friends. LO says he can get a buyer and split profits with Owner. LO qualifies and gets a loan for a buyer at $1m. The $500k is their fraudulent profit. Buyer gets $10k or whatever for signing off on this. The other part is when the Buyer gets the keys the LO finds another Buyer for this same house 6 months later in order to reappraise at new value for $1.5M.
Reviewing what these guys did is funny as to how every knuckle head that does anything of this sort out there buys a Lambo or a Ferrari, and always has a name that ends with "sky".

Hopefully they will go down for the full 30 however reality is for good behavior they will probably go for 5-7 total.

Unfortunately won't deter people from doing this later unless third party origination rules and guidelines are changed.