Bill Melater writes:
Morning Music?


Now to read the post.


Bill Melater | 03.22.08 - 10:16 am | #

y writes:
Personally I want to hear stories about the folks who were priced out.

The folks who in normal times would have been able to buy a house at 2.5-3 times their yearly income with a 30-year fixed-rate mortgage paying no more than 30% of their monthly income as for housing.

These are folks who go to school, get a job, save their money for that 20% down-payment, only to be blown out of their water by folks "with poor credit" (as described in the article) came in and offered even $5,000 more than an already-inflated asking price.

I'm eagerly awaiting a meltdown which doesn't appear to be coming with all the scheming going on to let the current condition stand (new non-confirming rules, frozen ARM increases, whatever else Congress will think of).

--
y.
y | 03.22.08 - 10:21 am | #

sk writes:
First ?

I read that story last night before I went to bed - Heart-breaking and outraged me at first and in many ways still does, but there's a nagging but, but, but... - there's an oughtohavenode quality to all this and something else -

I've done immigrant rights/advice/translation work at not-for-profits work in the past. There are a few oddities here that I'm still musing about. I'll see if I can coherently describe them in a later comment.

I'd like to have seen an Honduran origin reporter in the tagline.

-K
sk | 03.22.08 - 10:22 am | #

Tanta writes:
These are folks who go to school, get a job, save their money for that 20% down-payment, only to be blown out of their water by folks "with poor credit" (as described in the article) came in and offered even $5,000 more than an already-inflated asking price.

You are letting your self-satisfaction get in the way of your reading skills. I find this happening a lot.

How can you read this story and be sure you know that Ortiz had "poor credit"? It's possible she just had "no credit." It's possible she had OK credit, but no one explained to her that her FICO wasn't high enough to get a 100% loan at 7.5%.

And it seems obvious to me that she didn't know the price was inflated. I can't believe she even knew she was offering more than list. Who would have told her what the price was? The slimy RE agent who was busy defrauding her?

All you're trying to do is drum up class resentment here, I think. You want to see "good" people like you the victims of "bad" people like Ortiz. It doesn't seem to occur to you that you both might be "victims."

Why is that?
Tanta | 03.22.08 - 10:28 am | #

eh writes:
One person's predatory lending is another's idiot borrower, I guess. Personally, I'm sick of stories like this -- don't even bother to read them anymore. I accept that there may be a few sympathetic figures ('victims') out there, and for every one of those doubtless a matching scumbag broker/lender. But I'm not going to reason indcutively from that to conclude that 'predatory lending' was a, certainly not the, major factor in the housing bubble.
eh | 03.22.08 - 10:28 am | #

Tanta writes:
One person's predatory lending is another's idiot borrower, I guess.

OK, fine. Assume she's an idiot.

Is it OK to go find an idiot who will make your mortgage payments for you, get none of the upside potential if the thing appreciates, and also get nothing for her trouble if it depreciates?

Does this make Hernandez the "smart borrower"? He got a loan, got on title to RE, and never had to make a payment. He got an signed agreement that says he can't be sued for fraud. It sounds like he got out in a short sale.

Is your only measure of someone's value how "smart" he is?
Tanta | 03.22.08 - 10:35 am | #

sunsetbeachguy writes:
All the non-Tanta comments yet miss the point.

I read Tanta's post as an exhortation to the journalists to do a better job

So far, the bulk of the mortgage sob stories have been canned and trite and woefully missing in important factual details.
sunsetbeachguy | 03.22.08 - 10:36 am | #

sunsetbeachguy writes:
This particular story was no different.
sunsetbeachguy | 03.22.08 - 10:37 am | #

Yearning to Learn writes:
I don't understand this part:

so this woman and her husband bought a home with a payment way higher than they could afford, with the goal that they refinance later...

but refinancing doesn't bring down the principal... is there any way that would have meaningfully brought down the payment?

was the plan to refinance and take money out and use that to pay the mortgage until you can refinance to pull money out to pay the mortgage, repeat ad infinitum?

or does refinancing work because you have 2 years of payment history and thus could get out of the subprime batch?

I've just never understood the logic of people who get into a house with payments that START at more than they can absorb.

or is the idea with this story that they don't speak English so they had no idea what they were buying?

(FWIW: I'm a little irritated by people who move somewhere for 9 YEARS and don't bother to pick up the language... I'm as liberal as they come, but c'mon, 9 YEARS? NO English?)
Yearning to Learn | 03.22.08 - 10:38 am | #

y writes:
Tanta, I was just reading the article:

"Despite her poor credit, Honduran immigrant Glenda Ortiz easily got a subprime loan for this Alexandria home, bought in 2005 for $430,000. It was foreclosed on last year."

My intention was not to stir up class resentment; Mrs. Ortiz is certainly not better off than she would have been if she had not been involved with this scam.

I admit I'm a bit suspicious of folks who think they may be getting something for nothing, or something for more than they can afford, and are faced with the rather fishy process and proceed anyway. Would you buy a house from someone going door to door? I'm leery of even getting Girl Scout cookies that way. I freely admit that the house-buying process is complicated by lots of players trying to secure their commissions.

I only point out that this article is about folks who were fell for the scam while there are folks who did not are nonetheless operating in an environment where this sort of thing is happening, to their detriment.

This "run-down, one-story duplex" sells for $5,000 more than the asking price and the folks down the block are going to think their house is easily worth just as much (I "zillow'd" it, it must be true!)
y | 03.22.08 - 10:38 am | #

Yearning to Learn writes:
I agree with Tanta et al, more details are needed on exactly what went on here.

part of the problem with a lot of these deals/scams was that they occured with bubble mania logic...

I remember perfectly rational people thinking houses would go up 20-25% FOREVER. It doesn't even make sense, but they believed.

So I'm sure it's the same with this story. back when it was proposed, it made "sense" in a bubble logic sort of way?

now it's collapsed (of course) and the fingers start pointing?

and when we try to reconstruct what happened, we can't understand what the heck was going on because
1) most of us never thought that crazily to begin with and
2) the bubble logic is hard to remember even for those who had it.

Does anybody know:
what kind of judgment can happen that would preclude the Ortiz family from suing for fraud. this part was very hastily written in the story... I didn't understand it.
Yearning to Learn | 03.22.08 - 10:44 am | #

crispy&cole writes:
Every speculative mania is the same.

The last suckers in the game end up as viticms, meanwhile the early entrants are perceived as genuises. The greater fool theory wins again!

We had an administration that pushed the "ownership society" and many people bought into it hook line and sinker.
crispy&cole | Homepage | 03.22.08 - 10:46 am | #

y writes:
sunsetbeachguy: I think I get Tanta's point: journalists, please do more research, dig deeper, uncover the entire scheme behind the fraud, and warn us of the dirty tricks yet to come.

I reject any tones of anti-immigrant backlash here, intended or otherwise ("9 YEARS? NO English?), having had grandparents (who were US citizens) here for twenty years who didn't see a need for English.

Perhaps it's the process which is part of the problem? Studies show that many of the global poor are poor because of the complexity of acquiring private property.

Tanta, could you comment sometime maybe about whether there is in fact an increase in the number of actors in the home-purchasing process? I'm thinking seller's agent, buyer's agent, appraiser, inspector, mortgage broker, real estate broker, etc. Were those guys always there? Or were the jobs increasingly staffed by newbies who moved into them as the marked boomed?
y | 03.22.08 - 10:46 am | #

Riggsveda writes:
RE: "poor credit" v. "no credit"---my father-in-law, who weathered the Great Depression and went on to spend 10 years in night school so he could get an engineering degree, never took credit on anything his whole life (except his mortgage). Cash for everything, including his cars. Saved like a crazyman. After he retired he was getting ready for a vacation and discovered he needed a credit card to validate his existence and creditworthiness. When he applied, he was turned down because he had no credit history, although the man never had a late payment on anything in his life.

That said, in PA where I live, predatory lending is closely tied to discriminatory lending, and the PA Human Relations Commission has done ground-breaking work on making inroads against it. Where you find the kind of business practices outlined in Tanta's post, you will often find discriminatory animus behind them. The fact that, in this case, it was Latinos preying on a Latina, doesn't invalidate the likelihood.
Riggsveda | 03.22.08 - 10:49 am | #

Tanta writes:
so this woman and her husband bought a home with a payment way higher than they could afford

No. You're confused already.

Ortiz's real husband was apparently not involved in this at all.

Ortiz was talked to "buying" a house with someone who she had never met, who was the brother of the relitter's "sales assistant." She was asked to sign a statement that she was the brother's wife only because that's how you scam the lender into accepting this transaction. It wouldn't have been so suspicious to the lender if a husband and wife were both on the deed, but only the husband was on the note. Back in the bad old days, that was common (married women rarely got credit in their own names). But the lender is always suspicious in a situation where two unrelated people are on the deed, but only one is on the note.
Tanta | 03.22.08 - 10:50 am | #

Anonymous writes:
Rubin demands a taxpayer bailout:

Former Treasury Secretary Robert Rubin called Friday for quick government action to tackle the rising level of U.S. home foreclosures and he indicated that taxpayer money would have to be used.

"There is a strong need for urgent action," Rubin, who is chairman of Citigroup's executive committee, said. "I would be very, very seriously considering the possibility of using public funds in one form or another."

The Federal Housing Administration should be involved in any stepped-up government effort to help homeowners facing the loss of their houses, Rubin said during an interview on Bloomberg Television's "Political Capital with Al Hunt."

"The piece that's missing now," he said, "at least in my judgment, is addressing all of these mortgages that face foreclosure."

http://www.iht.com/articles/2008...ss/ rubinweb.php


Remembering poor Richard:

http://www.pbs.org/wgbh/pages/fr...ill/ demise.html
Anonymous | 03.22.08 - 10:51 am | #

crispy&cole writes:
You commented that she had received a good rate. I dont think so. I dont care if it was 0%, she still could never afford this dump (home).

This scam is right out of the REIC's playbook.
crispy&cole | Homepage | 03.22.08 - 10:56 am | #

Nude writes:
Tanta,

I'd love to see stories about "predatory real estate selling" but, as a layman, I'm not sure I would recognize it until after it became a widespread problem so I don't have much hope of reporters getting wind of it until it becomes commonplace.
Nude | 03.22.08 - 10:57 am | #

Yearning to Learn writes:
so this woman and her husband bought a home with a payment way higher than they could afford

No. You're confused already

Ortiz's real husband was apparently not involved in this at all.

Sorry, it's hard to talk about this story due to the story itself

Ortiz got a straw-buyer (fake hubby) to help with her "credit", but she and her true husband moved into that house and made the payments. It was she and her real husband I was talking about. I consider them as having "bought" the house even though neither were on title.
Yearning to Learn | 03.22.08 - 10:58 am | #

Tanta writes:
Tanta, could you comment sometime maybe about whether there is in fact an increase in the number of actors in the home-purchasing process? I'm thinking seller's agent, buyer's agent, appraiser, inspector, mortgage broker, real estate broker, etc. Were those guys always there? Or were the jobs increasingly staffed by newbies who moved into them as the marked boomed?

Well, you know, there are a lot of people involved. The theory, of course, is that it's harder to run scams with that many "independent" participants.

I would never be nostalgic for a world in which the RE agent, the lender, and the appraiser were all the same party, or in which the same RE agent "represented" both buyer and seller. It's awfully easy to have a "conspiracy" when you get to play several different roles in the same transaction--it's like "conspiring" with yourself.

There were not just too many newbies, there were too many operators looking to shake a few bucks out of the rubes. They were therefore not hard to recruit into the conspiracy.

In our case, we seem to have the mortgage broker and/or title agent married to the RE agent, and the RE agent's "assistant" being the brother of the "co-buyer." So it's not that there were "too many" parties; it's that in reality there was so much incest here that there were too few.
Tanta | 03.22.08 - 10:59 am | #

Average Citizen writes:
y... I can tell you that story. Working like a dog, driving a 1987 car (which I love)not remembering the last time we had steak? Sitting on the couch with a revolver because... well don't go out after dark. Being called doom and gloom by friends, because 'smart' people know it's a great time to buy a house. Our senator had a town hall meeting yesterday morning regarding a housing bill that he is proposing, involving a 15,000 tax credit for anyone who buys a home in or approaching foreclosure, and within 3 minutes of sitting down a reporter was asking me what I was doing there! Something stumbled out of my mouth about being a taxpayer and registered voter, if I'm not mistaken though, some would question my right to vote... not being a landowner and all!
Average Citizen | 03.22.08 - 10:59 am | #

bailey writes:
have a great weekend, Martha. :>)
bailey | 03.22.08 - 10:59 am | #

Bill Melater writes:
Tanta's post was to serve two purposes; one, to highlight (typical) journalistic sloppiness; and the other, to point out an even more (apparently) blatant example of RE purdify.

Anyone imputing stupidity regarding this "buyer" Ortiz, should consider that there are a lot of people who trust those whom they believe to be professionals because they believe in the inherent idealism of professionals; and, they acknowledge that they're not experts themselves. They're not necessarily stupid, just not as cynical as most of us have become.

One needn't be stupid or greedy to be taken in by con men. The "con" is a recent contraction of confidence. These criminals gain people's confidence.


Bill Melater | 03.22.08 - 11:00 am | #

Rob Dawg writes:
...the judge's order corrected the "erroneous" housing document to clarify that Hernandez and Ortiz are not married.

Add the judge to the list of perps.
Rob Dawg | Homepage | 03.22.08 - 11:00 am | #

crispy&cole writes:
BTW - I have now heard of three people who are buying new homes now and "renting out" their property which is underwater. The intent is to let the rental go back to the bank.

We should read about these scum bags in a year or two if they fail. If they succeed and they bought down their mortgage they will be hailed a real estate experts.
crispy&cole | Homepage | 03.22.08 - 11:02 am | #

Tanta writes:
I consider them as having "bought" the house even though neither were on title.

Ortiz was, in fact, on title.

She was not a borrower for the loan.

At the end of the day, all she did was rent the house from her "helpful" co-buyer, who was planning on taking half the appreciation when she cashed-out someday without having ever made a payment on the loan.

While there's this confusion over "bad credit" and "no credit," please notice that for all the months that Ortiz did make the payments, before finally running out of options, she never got "credit" for that on her credit report or her FICO, because she was not the mortgage account holder and it was not reported in her name.
Tanta | 03.22.08 - 11:03 am | #

Yearning to Learn writes:
Tanta or lawyers: did you understand this:

Ortiz sought out lawyer Howard Woodson for help. In October, he urged her to sign an agreement to gift the house to Hernandez. Although she refused and asked for a hearing, a Circuit Court judge ordered Ortiz to gift the home to Hernandez. It includes a clause prohibiting Ortiz from suing Salgado and Hernandez for fraud, according to court records.

1) why must Ortiz gift the house to Hernandez if Ortiz isn't on the deed (and Hernandez is). why couldn't hernandez just sell the house out from under Ortiz?

2) why would a judge say that Ortiz can't sue Salgado and Hernandez?
Yearning to Learn | 03.22.08 - 11:03 am | #

Average Joe writes:
Great disection Tanta,

I recall a realtor here in my city who was responsible for selling half of an entire phase of condos (talked to the site supervisor). Apparently he would bring up people from Mexico and get them to buy new condos from the builder. They are mostly empty and bank owned now but the builder got theirs and I think everyone new it. The builders were predatory sellers here.

People have been getting suckered by bubbles since forever. That is why institutions such as lenders and builders have a greater responsibility. This is the reason you have standards developed over time, immune from emotion and greed, that will act as a buffer against understandable greed, ignorance, and deceipt. The fact that these institutions ignored and/or changed the standards is inexcusable. Everyone's to blame, but the banks and lenders knew better. Unlike individuals, who tend to draw on their own history, the institutions have the benefit of generations of mistakes.
Average Joe | 03.22.08 - 11:04 am | #

sk writes:
OK - from a recent immigrant minority angle I muse about these things in the article:

0. There are a variety of gradations here. The really poor and completely uneducated ( the Sylhetis of the world - ok I'll take the brickbats from Sylhetis here) just wouldn't figure in these stories - they wouldn't even HAVE $4200 monthly incomes, so we are looking for people a step up from that with some of the things it implies - some understanding of things financial, some understanding of the ways of the world, the middle-class in this context of gradations.


1. Where is the husband in the story - All we read is that he is a air-conditioner installer. In macho cultures( please send stereotyping responses to USDA reg 404) its not credible to me that he wasn't involved in the negotiations. Similarly to say you are married to somebody else in the docs ??? I know of how people brought up in highly government regs and bureaucratic and corrupt and bribery filled environments find ducking and diving to avoid the predations of government perfectly acceptable but marriage to somebody else ? Its an oddity.

2. Where are the relatives in all this - we know she has a niece, is that it ? And traditionally you'd borrow from them, you'd buy and sell from them, its a network of trust - so are Ortiz and Salgado related ?

3. Of the 4200 monthly income, a proportion hmmmm at least 420 would be sent "home", with kid, perhaps more ( or is that a tax-kid ) - surely 3720 into 3000 monthly mortgage doesn't go - anybody can see that no ?

But the underlying story of predation is quite intact and both outrageous and heartbreaking.

-K
sk | 03.22.08 - 11:05 am | #

Yearning to Learn writes:
Oh tanta,
now it makes total sense.

this goes to show how convoluted the game is. "normal" people (like me, and possibly Ms. Ortiz) don't think about the possibility that the mortgage could be in one name, and the deed in another.

I wonder why the lending bank allows this? or is it something they never check?

I honestly wouldn't be able to understand anything without you.

gosh.
Yearning to Learn | 03.22.08 - 11:07 am | #

jussumbody writes:
I agree with your criticisms. But I think her emphasis on the monthly payment as a percentage of the couple's income instead of the actual mortgage interest rate made sense. The interest rate was probably quite reasonable for the borrower in question. But the fact that anyone would have made such an unconscionable loan that was doomed to forclosure was the galling part that she felt needed emphasis. But still, it only would have taken, what, five characters [x.xx%] for her to tell us the interest rate? You get the feeling it was deliberately left out because it might not contribute to the readers outrage. I hate that manipulative shit.
jussumbody | 03.22.08 - 11:07 am | #

WPA (Works Progress Administra writes:
Once again (and again, and again) Tanta is absolutely right about the underlying story behind the story. The Post Watergate "President's Men" era of modern journalism is by and large abysmal when it comes to real news stories. Sure, the NYT magazine still produces nifty and interesting cultural pieces. But the prevailing template for the hard news stories of our times i.e. credit, housing, fiscal, and monetary implosions is broken. Broken by lazyness, herd psychology and foggy J. School brains. Excellent journalism currently looks like a lot more like what appears daily in Calculated Risk and not the mainstream outlets. Viva bloggers in pajamas. Viva Calculated Risk. Viva Tanta.
WPA (Works Progress Administra | 03.22.08 - 11:08 am | #

Tanta writes:
why must Ortiz gift the house to Hernandez if Ortiz isn't on the deed (and Hernandez is). why couldn't hernandez just sell the house out from under Ortiz?

ORTIZ IS ON THE DEED.

I told you guys that these scams are hard to follow.

ORTIZ and HERNANDEZ are both on the deed, jointly vested in title to the house.

ORTIZ and HERNANDEZ both then had to sign the mortgage document, because only owners of real estate can pledge it as collateral for a loan.

But only HERNANDEZ was a "borrower." The note was signed only by HERNANDEZ, who was the only party the lender could collect from.

My guess is that the judge thought the current noteholder (not the original broker) had been defrauded, because ORTIZ' ownership interest in the property was getting in the way of the lender foreclosing against/suing for non-payment HERNANDEZ.

The judge probably thought ORTIZ was getting out without an FC on her record--by deeding over the house to HERNANDEZ only (that's a deed given from O and H to H only), she's out the picture. She was never on the loan, so no FC will ever appear on her credit report.

The agreement not to sue is probably because the judge thought she should have known better.
Tanta | 03.22.08 - 11:12 am | #

Yearning to Learn writes:
the more I think about it, the Ortiz family knowing English wouldn't have helped in this case anyway.

the reason: most of these stories we've heard to date are convoluted strategies, and are only printed in fine print on page 397 of the loan documents...

then later the loan docs are sometimes changed anyway.

So I doubt English had much to do about anything.

same story could've happened with an anglo-saxon catholic grandma who teaches English at the local High School being approached by a "nice christian man" who helped get her into a house until it all falls apart later.

I just feel like there must be a better story out there somewhere than this one.
Yearning to Learn | 03.22.08 - 11:14 am | #

jussumbody writes:
Yearning to Learn,

Good catch. That makes me think the victim was more complicit in the scam than the article leads us to believe, and maybe this was a case of "no honor among thieves".
jussumbody | 03.22.08 - 11:14 am | #

Tanta writes:
Sorry, YTL, we crossed comments there.

Yes, even very bright people who are not RE/mortgage experts can get sucked into confusion vortices about the note/mortgage distinction and the owner/borrower distinction.
Tanta | 03.22.08 - 11:14 am | #

Tanta writes:
Similarly to say you are married to somebody else in the docs ???

You are assuming she knew that's what the paper she was signing said. I am not. I suspect she found out about that part later.

As far as the rest of your comment goes, I haven't got the unmitigated gall to claim I "know" all about what all those immigrants all do in all cases because, you know, they're all alike. So I will remain an ignorant white citizen who assumes that the immigrant community is just as diverse as my own community, full of good and bad, naive and informed, "macho" and rational, etc.
Tanta | 03.22.08 - 11:21 am | #

jussumbody writes:
Thanks for clearing that up Tanta. But I think the judge's ordering her to waive her right to sue is very strange. If she was really wronged, a decent judge wouldn't have done that to her. And if the judge didn't know enough of the facts involved, I can't see how they would arrogate to him/herself the presumption to preclude her from suing the malefactors. I suspect there's a significant part of the story there, and the reporter missed it.
jussumbody | 03.22.08 - 11:23 am | #

crispy&cole writes:
I wonder if the rainbow coaltion (or some other group) would have held a march if this woman was not allowed to get a loan in the first place?
crispy&cole | Homepage | 03.22.08 - 11:26 am | #

Tanta writes:
I just feel like there must be a better story out there somewhere than this one.

"Better" for what? On the assumption that it's true, what's better than the truth?

You mean the "better" story is one where the "victim" is 100% sinless ivory-pure white-hatted, and the "perps" are 100% evil black hats?

Why the hell do educated, informed people require Sunday school tracts and treacly one-dimensional fables before they find these stories satisfying?

Why is it that nobody can be both foolish and a little dumb and still a victim?

Why is it that we can't see this as a problem with financing and real estate transfer practices, instead of a tear-jerker?

Look, people, the world's a complicated place and people are complicated people. No story of predation and profiteering is ever going to make anyone happy if your requirement is that the "victim" be Mother Theresa.

The classic excuse of every con man is that the idiot mark had it coming. Jeebus.
Tanta | 03.22.08 - 11:27 am | #

Yearning to Learn writes:
Like I said Tanta:

I can't understand anything without you.

Are you interested in a "Chief-Executive of Helping YTL" job?

it comes with a company pony.

I have to say, as always I'm not sure if the victims in this story are really victims or if they were accomplices that turned victim when it all went down.

if this family was the victim of a predatory ring, then my heart goes out to them. They wasted 10's of thousands of dollars on overpriced RE.

if instead they were speculators who understood what was going on originally, but now feel bad because it went wrong, then they get no sympathy.

there is no way to tell.

and I get these sneaking suspicions that the WaPo purposefully chooses these types of stories so that we can blame the possible-victims more (non English speaking people, so silly immigrants, etc etc etc)

there are unequivocal examples of predatory lending. off the top of my head:

in the movie "Maxed Out" (worth seeing IMO) there is an obviously retarded African American man. mortgage folk had him refinance his home (out of low rate govt mortgage), taking huge fees and leaving him with nothing. They had to help him sign the papers (he couldn't read or write) then they foreclosed on him and took the home.
(on YouTube it is at the 30:00 mark, he signs at 31:55)
Yearning to Learn | 03.22.08 - 11:28 am | #

Outsider writes:
I haven't read the comments here, but I do have one beef about stories like this. Forgive me if this is a misperception.

It appears these journalists are taking situations from the skinny ends of the bell curve. They are picking out stories that are not mainstream, and sensationalizing them to sell papers. People will and have always been taken advantage of, and that will always continue to be so. However, that doesn't mean this has anything to do with the predicament we're in now.

I'm not saying it isn't true, and I'm not saying it doesn't happen. I'm not saying nothing should be done about it.

But I am a little tired of out-of-the-mainstream, peculiar situations that are treated as run of the mill situations that are happening across the board.

That's all.
Outsider | 03.22.08 - 11:30 am | #

Ministry of Truth writes:
ORTIZ should never have made a payment and lived in the place for free since they were never the borrower.
Ministry of Truth | 03.22.08 - 11:32 am | #

Anonymous writes:
"(FWIW: I'm a little irritated by people who move somewhere for 9 YEARS and don't bother to pick up the language... I'm as liberal as they come, but c'mon, 9 YEARS? NO English?)
Yearning to Learn | 03.22.08 - 10:38 am | # "

Ditto on that one.

I was perusing the NYS Retirement System Website and noticed that they now provide all services in Spanish.

You need to work for ten years to vest in the retirement system.
Anonymous | 03.22.08 - 11:33 am | #

Tanta writes:
The last suckers in the game end up as viticms, meanwhile the early entrants are perceived as genuises.

Exactly. Here we are, in another thread, going to "dissect" the last sucker over and over, without any mention of what I tried to get at in my post: who were those "early entrants"? What kind of human being sold that home in the first place?

Is it, like, not allowed to criticize sellers?
Tanta | 03.22.08 - 11:33 am | #

winjr writes:
"What's so "innocent" about taking advantage of a naive, uninformed, and unrepresented buyer to profiteer off real estate?"

Chalk that up as 10X worse when the buyer is represented by an attorney who sees a gigundous cut from the title fee.

Saw this not too many months ago vis-a-vis an attorney in our own firm (who, I'm happy to say, is no longer with us after we booted him out).

What a terrible deal. Attorney's friend came into a windfall (measured in the millions), and seemingly out of nowhere came a Florida developer who offered to build the guy a house (as an investmnet), and, in exchange for this developer's generosity, client would agree to split, 50-50, whatever gain was later realized. If the house was ultimately sold at a loss -- tough stuff, client eats the entire loss.

This was in Florida ...

In 2007 ...

I repeatedly told the attorney involved -- "Are you crazy? You may as well just go ahead and draft the malpractice suit that will be filed against us."

He didn't care. Big, BIG title fee, and he has his own overbloated mortgage payment to make.

In the end, we (I) wrote the best CYA letter I could fashion under the circumstances, and we booted the lawyer out the door several weeks later.

My point -- If you're the buyer, never trust counsel who's on the title company's "approved attorneys" list.
winjr | 03.22.08 - 11:35 am | #

Allan writes:
Most reporters were, I believe, born after 1996.

Consequently, a high interest rate to them is anything more than 6%.

Apparently, they never heard of an era where banks routinely paid interest of 6 or 7% on bank accounts...
Allan | 03.22.08 - 11:38 am | #

Yearning to Learn writes:
Tanta,
I understand your ire, but I'll try to explain where I'm coming from.

A story like this WaPo one leaves us thinking that EVERYBODY is to blame. and perhaps everybody is.

but by saying this, then the Financial firms get off the hook.

we look at this victim, and don't know if she is really a victim or not. maybe she was, maybe not.

Maybe she got a raw deal and this was a tale of predatory lending, or maybe all parties were involved and knew what was going on and the deal just fell appart and karma was served (the lender took a loss on short sale, Hernandez gets credit blemish, Ortiz loses lots of money)

in fact, I distrust this story from WaPo, as it may be one of those "look at the silly immigrant" stories disguised as a "poor homeowner loses house" story.

just read the comments over there. 99% of them are "she's a stupid illegal" variety. (nowhere do I see that she is illegal)

I feel that we need to look at the NEFARIOUS deals that were done, where the victim is an unequivocal victim. This leaves the financial houses naked.

they can't say "well, we all had a little blame here".

instead, they would be in the spotlight. WHY did they loan this way, WHY did they allow this to happen, WHY did they cheat these people so.

The WaPo leaves us with "wow, everybody sure got what's coming to them."

if they used the story from Maxed Out, people would be aghast that a respected financial firm (Citi) went to a retarded man on a gov't mortgage and refinanced him into a high interest rate mortgage extracting tons of fees and putting him in a higher mortgage, and giving him NOTHING.

there would be no "everybody has a little blame here"

it would be "the financial firms are out of control"

of course this story won't run, because then it would be harder to bail out these firms "in our interest"
Yearning to Learn | 03.22.08 - 11:39 am | #

Marcus Aurelius writes:
Sorry to keep harping on a point, but it's an important point that gets no traction.

The point:

This. Is. A. Law. Enforcement. Issue.

Period.

Only law enforcement, backed by sufficient CPA brainpower, can stop the scam. Efforts to bail-out or provide assistance to any part of the enterprise is to play into the hands of the scam artists (and the scam artists exist at every level).

We continue to be robbed, while we fret over the collapse of the "system".

Too late.

We are holding the door while the looters steal the silver, furniture, fixtures, and anything else of value, on the premise that a crime has not been committed until it has been committed to the fullest. We can always call the police later.

A few harsh jail sentences - spread equally among the various levels of participants - will stop the crime dead in its tracks.

Until then, we are all feckless fools.
Marcus Aurelius | 03.22.08 - 11:39 am | #

Anonymous writes:
"What kind of human being sold that home in the first place?"

The one's who live by the motto: "get them before they get you."
Anonymous | 03.22.08 - 11:41 am | #

MaxedOutMama writes:
Tanta, I don't think you are being nasty enough. The conclusive statements in the article don't match the facts.

Such as In fact, to understand the housing crisis that has swept the country, one need only listen to the tale of the Ortiz family.
...
She agreed to a high-interest loan that would cost her more than $3,000 a month, more than 70 percent of the $4,200 that she and her husband brought home monthly.
...
Gutierrez blames the government for allowing so many subprime loans, such as Ortiz's, which required no proof of income.
...
"This is emblematic of people preying on their own and emblematic of bad brokers, but also emblematic of legitimate financial institutions either helping this happen or ignoring some facts so they can make a lot of money," said Alys Cohen, an attorney with the National Consumer Law Center.

This is such bullshit! Mortgage fraud is a problem, but it isn't the main driver of the mortgage problem, so this story does not help anyone understand the housing crisis. Ortiz never got a loan. The straw buyer did. The financial institution involved granted a loan to a completely different applicant, and federal law mandates that they couldn't require Ortiz (purportedly the wife of the borrower) to be a co-applicant.

Just try refusing to write such loans because the spouse isn't on the app even if the applicant qualifies. You'll get your a$$ handed to you! Those ECOA lawsuits can be extremely expensive. Punitive damages!

This is a completely demented, wildly misleading piece of godforsaken "trained journalism" that makes me want to slap a "trained journalist" silly. If you want to write a story about people getting stated income loans they can't possibly repay, find someone who did. It's not even relevant that the mortgage payment was 70% of Ortiz and her real husband's income. The creditor didn't know what that income was, or who Ortiz' real husband was. The creditor didn't even have Ortiz' income on the app, because otherwise she'd have been on the freakin' loan.

This is a story about a mortgage fraud ring ripping off both banks and would-be homeowners while specializing in ethnic targeting, not a story about bad lending standards. The mortgage fraud ring's actions were vile, but you cannot blame the creditor!

This is not a good article. It's a bizarre exercise in misleading the reader.
MaxedOutMama | Homepage | 03.22.08 - 11:41 am | #

Ministry of Truth writes:
In 1998 I had a 3 year ARM at 7.25%. Oh the horror in those rates, how did anyone survive?
Ministry of Truth | 03.22.08 - 11:42 am | #

sk writes:

You are assuming she knew that's what the paper she was signing said. I am not. I suspect she found out about that part later.


Point taken on that but it goes with my underlying question on where is the husband in all these negotiations ?


As far as the rest of your comment goes, I haven't got the unmitigated gall to claim I "know" all about what all those immigrants all do in all cases because, you know, they're all alike.


Well, I made the same point, that the people are diverse, they aren't ALL totally poor and uneducated, nor they all 7-11 owners, nor doctors or programmers or gardeners or social workers or whatever and they are definitely not all alike.

We seem to be in splendid harmony there.

-K
sk | 03.22.08 - 11:44 am | #

Anonymous writes:
1988 I had a 30 year fixed at 11%.

But the solid little house was only 75K.

This point seems lost on people who love low rates.
Anonymous | 03.22.08 - 11:44 am | #

Tanta writes:
YTL, I am in no doubt that the WaPo is getting tons of racist rants about "them illegals." I will not go over there to look; I'll take your word for it.

But you seem to want us all to play into their hands. If you can't write about corruption in the immigrant community--and that's what this story is about, a Latina screwing another Latina--for fear it'll fire up the Klan, then you can't write about corruption in the immigrant community. The ones who suffer are--those immigrants who do not know that the fellow immigrants they trust are looking to victimize them, and/or do not really understand the rules of U.S. finance/RE like they claim to.

There's an assumption lurking here that "those people" don't read the Washington Post. Just "us people" who need to hear about an "innocent" white person who got stiffed by a "faceless" bank in order to be made to feel sympathy.
Tanta | 03.22.08 - 11:46 am | #

Jeorge Bush writes:
Just doing the job (of sucker) that Americans won't do. We need hordes more of these.
Jeorge Bush | 03.22.08 - 11:47 am | #

Bill Melater writes:
Tanta asked incredulously: Why is it that nobody can be both foolish and a little dumb and still a victim?

The classic excuse of every con man is that the idiot mark had it coming. Jeebus.

And the predominant tone of the commentary seems to resemble blaming a rape victim. Jeebus indeed, T.

Would it help shift the focus toward the predatory RE scum to use a silver-haired librarian at the Smithsonian who was hornswaggled into refying three times in three years mostly to get the SOBs to stop calling on the phone?


Bill Melater | 03.22.08 - 11:50 am | #

NW writes:
It would be interesting to see who paid 380k for and financed this place last December after the crunch began. I can't find the transaction on the WaPo site.

The street address is apparently 106 from the picture but I couldn't find a street name which is required for the Alexandria, VA public records site. Any cyber sleuths out there?
NW | 03.22.08 - 11:52 am | #

Tanta writes:
Just try refusing to write such loans because the spouse isn't on the app even if the applicant qualifies. You'll get your a$$ handed to you! Those ECOA lawsuits can be extremely expensive. Punitive damages!

As it happens, I have in the past been the one somebody brought some file to that involved a titled non-borrowing spouse, and I have concluded that it was some rich lawyer with a scam in mind and I have in fact demanded that the deal go no further until we ran a credit report on the non-borrowing spouse, which you can do in a community property state, and I have put my elegant little dinosaur foot down and refused to let the deal go through.

Sorry, but I'm tired of ECOA getting blamed for lenders not exercising basic due diligence. The fact that HERNANDEZ wasn't on the effing SALES CONTRACT woulda been Clue #1. The fact that half the closing costs came from ORTIZ would have been not just Clue #2, but would have violated the non-borrowing co-owner rule: if you are taking money for down payment or closing costs from somebody, you qualify them even if you end up not making them sign the note. 'Tis a rule.
Tanta | 03.22.08 - 11:53 am | #

Yossarian writes:
Right on, Tanta!
The fraud involved in the RE bubble has been incredible. And it's disproportionately affecting minorities.. and women, too by the way.
And comments I often hear from middle class folks is that, 'the poor were just stupid and uneducated', but with the caveat that only 'the middle classes' are the victims of fraud.
I find the whole subject of RE fraud just astounding. Maybe it's true that the Fed helped create most of the RE bubble.. but where have the regulators been when it came to the actual loans?
Yossarian | 03.22.08 - 11:55 am | #

jalrin writes:
The other topic that this article seems to be overlooking is the absence of the criminal justice system in all of this. Agreements not to sue (especially one's as dubious as this one) are absolutely no use against criminal prosecution. Considering that Virginia and the federal government have their own fraud statutes, it is outrageous that there does not appear to have been any form of prosecution or even an investigation (even in my anti-consumer jurisdiction, I could probably get a felony conviction on these creeps).

It would also be nice if the reporter had looked into the behavior of the judge, but that is too much too hope for.
jalrin | 03.22.08 - 11:56 am | #

Max writes:
My blog partner and I did a few reports on houses in the Sacramento area being used as marijuana grows. When it was all said and done, over 50 houses valued between $300k-$600k were being usedby the ring, all bought with 0% down IO loans. The kicker: the buyer's agent was the same for almost all the transactions!

Our local rag (Sacramento Bee) only managed to file a reactionary report, with no digging into the RE transactions or the mortgage fraud that took place. We even posted a series of "suggested" questions the Bee reporters could ask when following up. Never happened.

Overall I have great sympathy for the average newspaper reporter. They're woefully underpaid, seldom very knowledgeable about the subject matter, and constantly stressed by coverage requirements and deadlines.

That being said, I wish they would lose some of the arrogance. (I've had my stories stolen at least three times by local news outlets with no credit given.) Reporters: It's OK if you don't understand the subject matter yet! Dig a little deeper; ask some questions; make them explain it to you; investigate!
Max | Homepage | 03.22.08 - 11:58 am | #

Yearning to Learn writes:
I agree with you Tanta to a point.

my issue with these "heartbreaking stories" is that a significant % of them involve immigrants.

so people start viewing this as an immigrant problem.

keep the immigrant stories, I'm fine with them. but this is not just a problem for immigrants.

so expand it a little bit. Show us why ALL of us are being screwed over.

the longer the stories keep highlighting only a certain demographic, the longer the big financial houses can pretend they're doing us a 'service'.

so I want stories of immigrants being swindled, and also grandmas, and military men, and people in old homes, and senile people and retarded people, and middle class people and so on.

we need to make people realize that it's not "them" that got swindled, it's US. the immigrant stories make Joe-6 (including me) say, "geez, why doesn't this lady speak English. I'm glad that I speak English, so this will never happen to me

it's only later that I realize "huh, those documents sure were confusing when I signed them. maybe I was lucky that Wells Fargo followed through with my loan, because I didn't read every page, there were so many of them" which lead to my EUREKA moment of "hey, this lady speaking spanish likely didn't matter anyway!"

unfortunately, it seems that the average American is neither skilled enough or interested enough to educate themselves as to what is really going on.

so we need "heartbreaking stories" to give them a personal feel for why this stuff matters.

and IMO parading around immigrants every time doesn't do it.

I want MORE.
I want OUTRAGE
and yes, I want a PURE victim

only then can the financial houses be put under the magnifying glass.

the tone would be very different if every week WaPo highlit a retarded person and a senile grandparent in an old home and a military man (yes, some of them white and blue eyed and blonde haired) who were screwed by the lending industry.
Yearning to Learn | 03.22.08 - 11:59 am | #

Jillayne writes:
In October, I speculated that mortgage fraud was going to get worse.

Yes, we'll see past mortgage fraud exposed now that values are no longer appreciating.

However, I believe NEW fraud throughout the industry will continue on. A different kind of desperation will now take hold.

We have desperate home sellers, relitters who have been eating boxed mac and cheese for the past several months and living off credit cards, we have mortgage brokers who set up lavish lifestyles and they're also desperate for cash.

Many of the mortgage fraud players are still out there holding professional licenses, telling each other that it's not their fault if the seller doesn't read what they're signing.
Jillayne | Homepage | 03.22.08 - 12:01 pm | #

eh writes:
Is your only measure of someone's value how "smart" he is?

Dear Tanta, I read your work regularly and admire it. A LOT. I have learned much. But really. I said nothing about this woman's "value" -- e.g. as a human being. (Or what exactly do you mean?) In fact, clearly -- CLEARLY -- the right thing to do here is for her to be given a pass on everything -- wipe the slate clean for her.

My one point is and was this: I don't personally care for this sort of anecdotal story anymore. I have seen enough of them by now -- I get the point. I do not have much sympathy for her financial predicament, one her naivete or stupidity -- take your pick -- has gotten her into. And I won't reason inductively from such stories to conclude that borrowers are largely blameless victims.
eh | 03.22.08 - 12:03 pm | #

AllenM writes:
The realiiter still has a license and is out of jail?

Um, regulatory failure.

Flat out. Wall Street has encouraged outrageous practices to fill paper pipelines, so fraud is what you get. YSP? How about that for undisclosed kickbacks?

What I am tired of is the fraud that had to be complicit in the persons licensed by the state in the process- the Realtor? the Appraiser?

Why is the realtor allowed to keep dime one from this transaction?

Why is the realtor and mortgage broker not blacklisted/fined by the industry and the licensing agency?

Come on, fraud deserves to be actively punished, not have a blind eye turned to it.

As for the folks who got scammed, the community newspapers (uh, geez that crappy univision comes to mind too, should have been telling folks about what could happen to them if they don't watch out!)

Lots o' failure and blame to pass around, but the regulatory sins that enabled the game are at the heart of the matter.

Deregulation has failed, time to call the Reagan fiasco for what it is, a failed experiment.

ARMS are something that should only be offered to folks rich enough to take the payment shock, and most common folks can't hack it. The death of the S&Ls is really being felt in this country.

Someday this war's gonna end...
AllenM | 03.22.08 - 12:04 pm | #

NW writes:
Why weren't the brokerage names included in this story? Or were they?
NW | 03.22.08 - 12:05 pm | #

Marcus Aurelius writes:
Minority, schminority. White, black, brown or green. Smart, stupid, or somewhere in between. Male, female or transgendered. When it comes to the housing bubble, you can't swing a dead cat without hitting a criminal.

Mortgage Brokers, banks, shadow banks, appraisers, ratings agencies, settlement officers, buyers, builders - by collusion or not, the entire supply chain (for lack of a better description) is fraught with criminality.

Ours is not to wonder why, ours id to be diligent, smart, pragmatic, and conservative by putting people in prison.

Otherwise, we will only be able to wish we had.
Marcus Aurelius | 03.22.08 - 12:06 pm | #

sk writes:

and yes, I want a PURE victim

Yearning to Learn


I don't think that exists, YTL - its warts'n'all type of stuff. I want to point up some of the possible ones from one angle of the story.

Ambiguity and tentative conclusions rule ( or gets ruled ? ) - I was about to say this is unlike math ( my field ) or medicine but I _know_ it rules in math ( cf Godel's Theorem ) and looking at PSA testing efficacy, treatment ( and nontreatment ! ) outcomes etc - I'd say it rules in medicine too - Judgment is necessary - so long as its tentative and open to change as additional facts are known.

-K
sk | 03.22.08 - 12:07 pm | #

lama writes:
When immigrants come here, they seldom know the rules (both written and unwritten). Most latin people come from places where under the table payments, bribes and side deals are the norm. This deal would almost seem perfectly straight to someone from So. America.
Imagine coming from a place where you could never imagine owning your own house, never mind having the prospect of getting rich as a real estate mogul. Latin immigrants tend to have limited access to advice outside their own community and are perfect fodder for bad information or downright deception.
I'm guessing that for every story like this one, there's another 10 where the relitter himself has only been in the US long enough to know that real estate goes up 10-30% every year. Why not do anything to get someone in a house?
lama | 03.22.08 - 12:08 pm | #

Tanta writes:
Why weren't the brokerage names included in this story? Or were they?

The mortgage broker was not mentioned by name, only noted in passing as being "out of business."

I agree that it's a problem that there is this coyness in the article about naming names. I do, however, wonder if the reporter isn't trying to protect Ortiz that way: if she was prohibited from suing for fraud, she might also be vulnerable to accusations of slander.
Tanta | 03.22.08 - 12:09 pm | #

Interesting Times writes:
Off topic but this is a great site with media quotes before during and after the great depression.

http://www.gold-eagle.com/ editor...mour062001.html

I think we are somewhere been #15-19 ... can't wait until 20... yikes.
Interesting Times | 03.22.08 - 12:10 pm | #

Tanta writes:
Ours is not to wonder why, ours id to be diligent, smart, pragmatic, and conservative by putting people in prison.

Fine. Fine.

CAN WE START WITH THE PROPERTY SELLER?

CAN WE IMPRISON EVERYONE--I MEAN EVERYONE--WHO SOLD DURING THE BOOM TO SOMEONE WHO DIDN'T QUALIFY FOR THEIR LOAN? CAN WE? CAN WE?
Tanta | 03.22.08 - 12:11 pm | #

fred writes:
Tanta - Max gets at some of the problems and stresses that reporters face but nowhere near all.

Reporters do what their editors tell them to do, spend as much time on the story as their editors allow, write the story and then hope (pray) that it will come out of the editing process resembling what they originally wrote and then actually appear in print.

Editors are under enormous pressure to fill the space allotted in the time allowed. Each editor has another editor looking over their shoulder up to the managing editor who has an executive editor and a publisher demanding that everything be done in such a way as to create a profit that will satisfy Wall Street expectations.

Read Jack Shafer on a recent attempt at the WaPo to streamline their Byzantine editing process:

http://www.slate.com/id/2186624/
fred | 03.22.08 - 12:11 pm | #

Marcus Aurelius writes:
Tanta:

We can prosecute anyone who committed the crime of fraud.
Marcus Aurelius | 03.22.08 - 12:12 pm | #

John Stark writes:
One thing every practicing journalist knows: many of your readers could have and would have done a better job on any story you write, and they will tell you so.

Tanta's critique of this story (and its genre) is on the mark as usual. I suspect I'll be making my own modest contributions to this genre in the months ahead, and I'll have a miniature Tanta perched on my shoulder like the little conscience in the cartoons.

Thanks again to you and CR for what you do.
John Stark | 03.22.08 - 12:12 pm | #

Tanta writes:
Why is the realtor allowed to keep dime one from this transaction?

Why is THE SELLER allowed to keep one dime from this transaction?
Tanta | 03.22.08 - 12:12 pm | #

Marcus Aurelius writes:
Oh, yes: and imprison those fount guilty.

To ask a related question:

WHAT IS THE ALTERNATIVE? TO SUBBORN CRIMINALITY AS A CULTURE?

CAN WE?

CAN WE?
Marcus Aurelius | 03.22.08 - 12:14 pm | #

js writes:
Here's my question: Was Aguilar the seller's agent on the $380k transaction? If yes, you know you've got a fraud ring.
js | 03.22.08 - 12:14 pm | #

Marcus Aurelius writes:
The seller committed no fraud. If they did, they should go to jail.
Marcus Aurelius | 03.22.08 - 12:15 pm | #

Anonymous writes:
I would think the motivation for a reporter to focus on minority or unsympathetic "victims" is clear; it's the same reason we never see middle class criminals on cops.
Anonymous | 03.22.08 - 12:16 pm | #

Marcus Aurelius writes:
The last comment is not in relation to this case, particularly. In the scheme of things, the average seller was not guilty of fraud. If there were undisclosed conflicts of interest on a particular deal, then yes - the seller gets prosecuted.
Marcus Aurelius | 03.22.08 - 12:17 pm | #

js writes:
I think the larger point is that we - everyone who was not complicit in this - are all victims. Some to larger degrees than others, to be sure. Every property-tax payer is affected by having their property taxes increased as a result of these sham prices that lead to higher tax bases for surrounding properties. Even the renters are affected now, as cities are forced to cut services after letting their budgets get too big during the boom.

And for those of us who have been renting the entire time, we sit and wait another day for sanity to return so that we can finally buy a home for ourselves, throwing away another rent payment on the first of every month.
js | 03.22.08 - 12:18 pm | #

Tanta writes:
The seller committed no fraud.

THAT is the unexamined premise in this whole thing.

Suddenly, when it comes to the seller, we're awfully damned legalistic. It's "not fraud" to accept a bid that's even more than your already ridiculously inflated price, and sit there across the closing table (which happens in VA) with a befuddled woman who apparently just met the guy who is "her husband" and who doesn't understand the language spoken or in the printed documents, and just keep your lips zipped because after all, you "deserve" the money and it's the lender's problem, not yours.

I find that revolting.
Tanta | 03.22.08 - 12:20 pm | #

Ralph Cramdown writes:
Tanta wrote: Is it, like, not allowed to criticize sellers?

If the seller was a related party, there's rules and ethics. If not, however...

Caveat Emptor. The traditional thinking goes that if you've amassed enough money to pay cash for real estate, you're a sophisticated party. If you haven't, your lender is a sophisticated party. Rarely in history have there been times where lenders lent without scrutinizing either the borrower or the security. Traditionally, the bank held the note to maturity and it behooved the banker to ensure you could pay. The recent period where PhD quants figured they could price a loan without examining the house or the borrower was an anomaly not soon to be repeated.
Ralph Cramdown | 03.22.08 - 12:20 pm | #

Rob Dawg writes:
CAN WE START WITH THE PROPERTY SELLER?

CAN WE IMPRISON EVERYONE--I MEAN EVERYONE--WHO SOLD DURING THE BOOM TO SOMEONE WHO DIDN'T QUALIFY FOR THEIR LOAN? CAN WE? CAN WE?

I thought one of the reasons for intermediaries was to explicitly insulate sellers from needing to make personal judgement calls as to the suitability of the buyer. Any blame you might wish would flow through to the seller stops with the agent who presents the potential buyer in the first place. It is their job to judge the suitability of the buyer and not the owner's job.
Rob Dawg | Homepage | 03.22.08 - 12:21 pm | #

Prufrock writes:
"The last suckers in the game end up as viticms, meanwhile the early entrants are perceived as genuises. "

I believe this is called the Greater Fool Theory": The last buyer is the greatest fool of all.
Prufrock | 03.22.08 - 12:21 pm | #

Marcus Aurelius writes:
Interestingly, the seller has no fiduciary duty to assess the wherewithal if the buyer. That's why the middlemen in these transactions are so highly regulated (I just vomited into my own mouth).
Marcus Aurelius | 03.22.08 - 12:21 pm | #

js writes:
As for Ortiz and the judgment that she cannot sue, it is likely because the judge felt she was - to some degree - complicit in what happened.

Our courts have a doctrine known as "clean hands" - meaning that those seeking equity remedies (as opposed to money damages) must have been innocent of any wrongdoing. Even if you're a victim, if you do not have clean hands, you cannot receive relief for getting the worse end of your scam.
js | 03.22.08 - 12:21 pm | #

Tanta writes:
Interestingly, the seller has no fiduciary duty to assess the wherewithal if the buyer.

In law, or in basic ethics?

Fifteen years ago I sold a old junker car that wouldn't run to a 17-year old who wanted to fix it up. He offered me $200.

The thing had thrown a U-joint; the repair bill would have been many, many multiples the value of the car. It might well have been worth $200 for scrap parts and the battery.

I called the kid's parents and grilled them about it: did they know the true condition of the car? Did they understand that it did not run at all? Did they really think the kid could fix it? Was this really a wise use of the kid's babysitting money?

Only when the parents assured me that they were involved and in fact the kid's dad and uncle were going to help him fix it up, not just so he'd have a car but to teach him about auto repair, did I agree to sign over title and take the kid's money.

There was nothing in state law that required me to do that. I just like sleeping at night.
Tanta | 03.22.08 - 12:26 pm | #

Marcus Aurelius writes:
Tanta:

W I'm not talkin' fair or unfair - I'm talkin' legality.

If there is a law on the books, and that law has been broken, a crime has been committed. No such law - no crime.

I don't give a damn who the criminal party was, or what drove them to their criminal act(s). Every criminal that ever lived had a reason for committing their crime.

We need to stop the crime, and we need to stop it now.
Marcus Aurelius | 03.22.08 - 12:27 pm | #

other Jim writes:
Well, to address one of your concerns, I have sold houses twice in my life and never once had a moments concern about the ability of the buyer to pay the mortgage. Both of those transactions were back in the day of underwriters looking at documents, licensed RE agents (separate ones for each party of the transaction, mine looking out for my interests) dealing with the mountain of paperwork. I worried about my ability to pay on the new house, I assumed the buyer of my old house was doing the same. When I sold, I trusted the agent to come up with a reasonable asking price, and took his word about the reasonableness of the offered price. As it happened, we used an agent my father-in-law had used and trusted over a long period of years.

This particular story of Ortiz and her husband being taken in by a confidence man has been repeated with variations over the ages, this one takes advantage of the current mess in housing.

I understand that people can live in a country where they don't speak the primary language but I still cannot understand why they would want to put themselves at such a disadvantage. One advantage of learning the local language is a greater understanding of the local culture and customs. There are lots of people at my workplace fluent in both English and their native language. When some situation comes up that they don't understand, they have the ability to ask the local natives (me among others) for an opinion.
other Jim | 03.22.08 - 12:30 pm | #

Prufrock writes:
"This is a story about a mortgage fraud ring ripping off both banks and would-be homeowners while specializing in ethnic targeting, not a story about bad lending standards. The mortgage fraud ring's actions were vile, but you cannot blame the creditor!

This is not a good article. It's a bizarre exercise in misleading the reader."

Maxed Out Mama,

Totally agree.
Prufrock | 03.22.08 - 12:30 pm | #

Tanta writes:
We need to stop the crime, and we need to stop it now.

I hear all the time that con games can't work without a willing victim.

I am observing that some of them can't work without a seller willing to look the other way, a seller who believes that it is his right to get a bubble price.

Sauce for the goose is, famously, sauce for the gander. Yet most people are incredibly resistant to finding fault with the seller.

I think that's because a lot of folks sold at the height of the boom, and don't want to look back and wonder what happened to the buyer. "Not my fault."
Tanta | 03.22.08 - 12:30 pm | #

Marcus Aurelius writes:
Tanta | 03.22.08 - 12:26 pm

That's a bit simplistic.

Now, if you had financed the purchase, based on fraudulent claims as to the quality and road-worthiness of the vehicle, and if you had then securitized the loan and spread it like cancer around your community, this would be a better analogy.

BTW: The people involved sleep perfectly well knowing what they did (in many cases, they sleep in the lap of luxury). That's why they should be on the rock pile for a few years.
Marcus Aurelius | 03.22.08 - 12:32 pm | #

John Stark writes:
Reporters do what their editors tell them to do, spend as much time on the story as their editors allow, write the story and then hope (pray) that it will come out of the editing process resembling what they originally wrote and then actually appear in print.

Editors are under enormous pressure to fill the space allotted in the time allowed. Each editor has another editor looking over their shoulder up to the managing editor who has an executive editor and a publisher demanding that everything be done in such a way as to create a profit that will satisfy Wall Street expectations.

All true. But we get a "do over" every day, and on our good days we remember that and try to do it better than yesterday. We do try to learn from our own experience and from the feedback we get from readers and bloggers.

The feedback is a great thing. When I started in this business, it was minimal--a few letters to the editor, maybe a phone call. Now the online comments and emails pour in, and a significant part of my day is spent responding to that. If I missed some important point, somebody is going to call it to my attention and I won't miss that point the next time--and there usually is a next time.

Especially with houses and mortgages. I'm guessing I could wind up spending half my time on stories directly or indirectly related to this issue in the months (years?) ahead.
John Stark | 03.22.08 - 12:34 pm | #

Ralph Cramdown writes:
On the other hand, I've got this mental image and it's just cracking me up:

I'm sitting across the closing table from the buyer, the buyer's RE agent, lawyer and banker, and I bellow out "I cannot in good conscience sell you this house at this price, because SOME OF YOU ARE CHEATS AND THE REST OF YOU ARE FRICKIN MORONS!!"
Ralph Cramdown | 03.22.08 - 12:35 pm | #

sk writes:

Fifteen years ago I sold a old junker car that wouldn't run to a 17-year old who wanted to fix it up. He offered me $200....
I called the kid's parents and grilled them about it: did they know the true condition of the car?


Now we are talking ethics.. I didn't sell my high CoG gravity Kawasaki Concours to anybody under 5'9" ( my height ) - their feet would barely touch the ground and at 730 lbs and high CoG keeping it upright would be hard. They had to have full motorbike licenses of course and while I wouldn't discriminate by age, I was really leery about selling to someone under 30 - luckily I found a 35 year old buyer..

But that's because I didn't want blood on my hands, literally.

In these real estate cases, its only money ?

-K
sk | 03.22.08 - 12:36 pm | #

jalrin writes:
If the seller knew that the property was worth less than what they sold it for and/or knew about the dubious nature of this transaction (the former at least seems likely) than they may very well be guilty of at least being an accessory to the fraud. If they had any sort of prior understanding or dealings with the other crooks in this transaction to find a buyer, then they are liable for all of the crimes involved as co-conspirators (that's what I would try if they were here in Alabama).

Clean hands" is an equitable doctrine and does not generally govern common law tort and property cases. That the judge would decide that someone deserves to get screwed and behave like this is outrageous that a judge would run around and misue it in a case like this.
jalrin | 03.22.08 - 12:36 pm | #

Marcus Aurelius writes:
Tanta:

Outside conspiratorial collusion between the seller and the party providing financing, I can't see where the seller has any duty here (I'm not just trying to argue a point - I really can't see it).
Marcus Aurelius | 03.22.08 - 12:38 pm | #

John Stark writes:
Only when the parents assured me that they were involved and in fact the kid's dad and uncle were going to help him fix it up, not just so he'd have a car but to teach him about auto repair, did I agree to sign over title and take the kid's money.

There was nothing in state law that required me to do that. I just like sleeping at night.
Tanta

The problem is we have too many people who can pick other peoples' pockets and then go home and sleep the sleep of the just.

Another problem is we have no way of legislating people like Tanta into existence.
John Stark | 03.22.08 - 12:38 pm | #

Tanta writes:
OK, some mortgage lending trivia for y'all.

The basic rule is that any person whose income or assets are used to "qualify" for the loan must be a borrower.

You can't have a situation in which Joe and Jane's joint funds are used to make the down payment and pay the loan, but only Joe is on the note, unless you can verify that Joe's income and assets could be enough for him to qualify by himself.

In this situation, it would have taken a real underwriter a couple of minutes to notice that there are no joint accounts on the "husband's" credit report, and that funds to close were coming from an account belonging to Ortiz only. Only an idiot relies on some piece of paper stating that they're married to justify not ordering a credit report for Ortiz and putting her on the loan.

It appears that the loan was done as a NINA--exactly so that this confusion about whose money was involved would be obscured. But NOBODY I know who is any kind of reputable EVER does a NINA that involves a non-borrowing spouse. Holy shit, every about-to-be-bad divorce in the country would start out that way.

I realize the rest of you aren't up on this kind of thing, but I'm here to tell you that it makes no sense to me to let the creditor off the hook.
Tanta | 03.22.08 - 12:38 pm | #

FT Woods writes:
Fascinating information about the 'clean hands' doctrine. Thank you.

I'm curious who the last two sellers were. The house sold in 2004 and then sold again in 2005 to Ortiz.
FT Woods | 03.22.08 - 12:38 pm | #

Lord writes:
Sure the seller may have been involved, but there is no evidence of that. Sellers generally don't have access to the buyers financial details, so wouldn't even be in a position to evaluate the buyer. That is the job of the lender and the job of escrow/title to see that the sums balance out. While there probably are sellers involved with this, it is not as sellers they are predatory. Sellers can't be predatory. They are just the other half of the transaction, looking out for their interests. This is just more lenders trying to shift the blame from themselves.
Lord | 03.22.08 - 12:40 pm | #

Tanta writes:
Another problem is we have no way of legislating people like Tanta into existence.

Well, you wouldn't want to do that even if it were possible. You'd get the whole package, and I'm not sure the world needs more people who like ABBA videos.

Of course we can't legislate morality. What we can do is call a spade a spade to shame people into it. What I'm reacting to is the assumption that since it's legal, it must be morally peachy.
Tanta | 03.22.08 - 12:40 pm | #

Mark writes:
Um, did anyone else read the surnames of these people - Ortiz, Selgado, Hernandez, Aguilar - and basically feel like they knew everything they needed to know about the story? Sounds like corrupt Mexicans cheating another Mexican. What's new about that? Nothing - the only difference is that it happened in Washington D.C. instead of Oaxaca or Mexico City. This is the kind of stuff we're going to see when we allow millions of latinos from corrupt cultures to emigrate here.

Sounds "racist"? Maybe. Sounds true? Absolutely.

If these are the kinds of people that make up the bulk of the pity cases we're supposed to shed tears over because they let themselves be suckered by a real estate deal, then I don't think it's as big a problem as the Post wants to make it seem. That kind of stuff is just par for the course south of the border.
Mark | Homepage | 03.22.08 - 12:41 pm | #

Anon E. Moose writes:
We had an administration that pushed the "ownership society" and many people bought into it hook line and sinker.

crispy&cole, Not to forget the infamous "Just go shopping to support the war effort!" line. Now we're tres bad for having credit card debt. Can't win!
Anon E. Moose | 03.22.08 - 12:45 pm | #

Marcus Aurelius writes:
Apparently, the crime is too big to prosecute.

We're all criminals now.
Marcus Aurelius | 03.22.08 - 12:45 pm | #

Tanta writes:
Mark, go deface someone else's website with your racism, please.

If you can't even read a story that says "Honduras" without substituting "Mexico" so that it feeds into your prejudices, you're also a stupid racist.
Tanta | 03.22.08 - 12:47 pm | #

jalrin writes:
Mark,

Lenders. sellers, and real estate agents engaged in fraud, theft, felony syndicalism, and racketeering are evil and must be dealt with. How are we supposed to maintain any kind of society if we adopt a "they deserved to be screwed, so it's okay attitude?"
jalrin | 03.22.08 - 12:47 pm | #

Mark writes:
I didn't read the story, just your summary. Honduras, Mexico - what's the difference? Corrupt latin nations, like all of them are.
Mark | Homepage | 03.22.08 - 12:48 pm | #

Kid Clu writes:
I too am getting a little tired of the "poor immigrant" mortgage/RE fraud stories in the MSM. This is not because I am unsympathetic towards ANYONE losing their home. It is more that I feel these stories are being used to hide the elephant in the room. The truth is that people all across the economic and racial spectrum have lost and are going to lose their homes because our government did not do, and is not doing it's job of regulating mortgage lenders and prosecuting those lenders who broke lending laws. These laws are already in place, there is just no enforcement.

The focus on the "poor immigrants" by the MSM helps keep the middle class from demanding that our government do it's job. Because the housing bubble is a slow unwind, the middle class people who are being gradually foreclosed on are not objecting because foreclosure is being mythically portrayed as something that only happens to the "poor & the dumb".
Kid Clu | 03.22.08 - 12:48 pm | #

lawyerliz writes:
Gosh, I'd better post now or will never get to the bottom of the thread.


First of all, English is a very hard language to learn. Since it has a romance language superstructure on a germanic base, with a total weird method of spelling, a romance language speaker might be bewildered. Spanish has rational spelling and is mostly a romance language. Since English has 2 sources, there are 2 words for nearly everything, a simple old English/Germanic one and a fancy romance language one. (Say $hit vs feces). These have different connotaions usually, and are used in different contexts.

Since I work off in the foreign county of Miami-Dade, I have made dissultory efforts to learn Spanish. I got up to being able to read the Harry Potter books in Spanish, but I will, I regret to say, will never be able to understand spoken Cuban, which is a truly awful version of Spanish, which is, like English, a distinguished world language.

Therefore, I am very sympathetic to people who find it difficult to learn English.

Secondly, NOBODY reads the papers thrust before them. Except me. My grandma told me to never sign anything without reading it, and I thought that was good advice. I real very fast, so that is usually ok.

Some people when I do (did) a closing don't even want to listen to my canned explanations. The worst was a
non-ethnic white litigation atty who was actually annoyed with me when I tried to explain the papers. I assure you he didn't understand them.

The smartest people do listen to my explanations, want to understand the closing statement, and want to have it pointed out on the note, where it says what the interest rate is, and that it is a fixed rate. I am happy to comply. At the end, I hand (used to hand) over the package and say they should read it if they ever have insomnia. Lots of laughs.

If the very smart posters here went to a foreign country, they might get taken too, because in all countries, there are the rules, and then there are the real rules, which are not written down anywhere.
lawyerliz | 03.22.08 - 12:48 pm | #

fred writes:
John Stark:

Everything you say is true as well, at least for the good ones (as you appear to be).

I suppose my larger point is that Tanta and others should be more careful in their use of the term "reporter" since these are institutional failures. Perhaps the terms newspaper or media or more specifically in this case WaPo would be better and help to spread the blame around for the problems that she raises. And lets not forget to heap on the readers their share of the blame for if they have not gotten out of the newspaper habit altogether probably rarely read a story past the jump.
fred | 03.22.08 - 12:49 pm | #

js writes:
jalrin - While you generally wouldn't use equitable doctrines for tort or property issues, this - at its core - is more of contract dispute. Neither of us knows exactly what the facts were here, but if I were a judge (rather, when I become a judge), and was convinced that two people were trying to use me to settle their scam-gone-wrong, I wouldn't hesitate to ban them from the courts.
js | 03.22.08 - 12:50 pm | #

Average Joe writes:
Reminder!


Many tend to look at this through the broken pieces of the popped bubble. In other words, we have the benefit of hindsight and perhaps at the time the seller, who was told that there was no bubble by none other than the entire banking industry, every NAR rep alive, Greenspan, Bernanke, et al., was hesitant to let the place go so cheap....afterall the buyer was gonna make 70G off of it in no time. The realtor may have thought they were helping an immigrant make easy money and any fraud was simply a way to get around rules written for white people or as the saying goes...banks only lend to those who don't need it.

Is it possible that rules were broken not to screw someone, but to help everyone get a peice of the American pie. Afterall, part of the elemant of a bubble is that no one really knows it exists until it pops. It's hard to put nefarious motives on people who couldn't have been expected to expect the unexpected.
Average Joe | 03.22.08 - 12:50 pm | #

Mark writes:
I'm not saying it's ok that they are screwing one another. I'm pointing out that it is no surprise that they are screwing one another, and that is what we get. And you know what? You all, including Tanta, know it, too. You just can't admit it.
Mark | Homepage | 03.22.08 - 12:51 pm | #

sk writes:

Um, did anyone else read the surnames of these people - Ortiz, Selgado, Hernandez, Aguilar...Sounds like corrupt Mexicans cheating another Mexican.


And it starts. I suppose you want your people of Hispanic origin to be named Richardson, huh ?

And my 3rd generation Hispanic telecomms specialist called Lopez was a cheatin' Mexican ? Or my pattern recognition math colleague Hernandez was a cheatin' Mexican..

No doubt you think my VP, a Mr. Meier was a money-grubbing, vile Jew ?

Sheesh..
For the record, Ortiz was from Honduras - as I watched with great amusement as a colleague asked to server at the cafetaria - "Serve it as hot as it would be in Mexico" and she replied - "But I'm from Guatamala"..
Then there was the time that Bridge WORLD champion the Brazilian Chagas was asked to say something in Spanish..

F*cking ignoramus...

-K
sk | 03.22.08 - 12:51 pm | #

Tanta writes:
Average Joe, I have no problem really with your point there. But in that case, why doesn't it also apply to the hapless buyer?

If the seller was caught up in a media-enabled bubble that made "greed" acceptable, the buyer was too.

This is really all I'm asking: that the same explanations and excuses and rules apply to everyone.
Tanta | 03.22.08 - 12:52 pm | #

Tanta writes:
Maybe I should change my blog name to "Tia" instead of "Tanta."

Then Mark would know right away I was not to be trusted.
Tanta | 03.22.08 - 12:55 pm | #

Marcus Aurelius writes:
I wouldn't hesitate to ban them from the courts.

js | 03.22.08 - 12:50 pm

____

But would you recommend an investigation based on your knowledge that there was a criminal scam being perpetrated?

Criminality exposed in a civil matter must be prosecuted by the state.
Marcus Aurelius | 03.22.08 - 12:55 pm | #

FT Woods writes:
Tanta, there were two sellers.

One in 2004 and again in 2005 to Oritz. Under the circumstances, both sellers warrant looking into.
FT Woods | 03.22.08 - 12:55 pm | #

Tanta writes:
FT Woods, how do you know?

I don't know how to find Alexandria RE records without a property address.
Tanta | 03.22.08 - 12:56 pm | #

John Stark writes:
One more thing--

While the details in this WaPo story no doubt lack the precision and clarity one might wish for, those details are going to be lost on the average reader anyhow. I think it does convey the big simple messages: Be careful who you deal with. Beware of complexity. Don't assume they wouldn't be doing this if it wasn't legal. Don't assume anyone besides you is looking out for your interests. Etc.

You would think just about everyone would understand this stuff by now, but no. You can't repeat it enough.
John Stark | 03.22.08 - 12:56 pm | #

FT Woods writes:
It's in the second paragraph of the article though it's easy to miss because of the way it's worded.

She looked at only one house and paid too much for it: $430,000 for a run-down, one-story duplex in Alexandria, triple what the house had sold for the year before, and $5,000 more than the asking price, according to real estate records.
FT Woods | 03.22.08 - 12:58 pm | #

Tanta writes:
John Stark, that's why I basically said I thought it was a pretty good article.

I wanted to complicate matters just to keep eggin' you all on, you know.

That and I do want us to get ahead of the title transfer scams that are on the way.
Tanta | 03.22.08 - 12:59 pm | #

lawyerliz writes:
Marcus--these frauds are not going to be prosecuted. There was a forgery case I knew about where the relatives really tried to get the police interested and it went nowhere.

Nothing done. Nada. Heard about another one Friday. Police said go prosecute your civil suit. If you want these prosecuted, then vote to pay taxes to hire 50% more judges, prosecuters and support staff, as well as renting extra space for the courtrooms and offices, and prison. Well, maybe we could let the dopers out because they do less harm. . . and fill the space with real estate fraudsters.
lawyerliz | 03.22.08 - 12:59 pm | #

Fair Economist writes:
Looking at the story, I think the agreement not to sue Salgado and Hernandez is reasonable. They seem to have been defrauded too. The fraud ring is Aguilar and his wife, who handled the mortgage. That's pretty blatant. Salgado was kind of involved, but she was probably basically suckered into it.
Fair Economist | 03.22.08 - 12:59 pm | #

js writes:
Marcus Aurelius -

Of course. I mean, I wouldn't tell them I was going to have the DA start investigating their scam, but I wouldn't let them waste the court's time dividing the spoils of their scam.

And to be clear, I'm not saying there clearly was collusion with the buyer, only that it is a possible explanation for the otherwise odd-seeming outcome.
js | 03.22.08 - 1:01 pm | #

Tanta writes:
It's in the second paragraph of the article though it's easy to miss because of the way it's worded.

Sorry, I thought you meant the house had been sold in 2005 again and then flipped to Ortiz.

As I said in my post, I figured the appraisal was "overpriced" because you have to get an "expensive" appraisal to justify tripling of price in a year with a "run down" (i.e., not improved) property.

I was just interested in whether people would be willing to assume that the seller in this case was "innocent."
Tanta | 03.22.08 - 1:02 pm | #

liberal writes:
I live in the DC area and read the article in the dead-tree edition.

This part I didn't understand:

"Is [what they did] illegal? I don't think it's illegal," Woodson said. "But you've knowingly induced people to enter a bad agreement."

Average Joe writes:
Tanta: 'I have no problem really with your point there. But in that case, why doesn't it also apply to the hapless buyer?"


I agree...greed and ignorance applies to both sides and everyone in-between.

Greenspan said that bubbles are impossible to spot so it's hard to ask more of even the most fluent english speaking natives.

That is why you have institutional standards based upon unemotional lending practices.

Ironically,

I suppose people's presumption of racism allowed those institutions to abandon those standards since everyone assumed they were meant not to protect the banks from losing money, but to protect white people from having hispanic neighbors.
Average Joe | 03.22.08 - 1:03 pm | #

John Stark writes:
And you know what? You all, including Tanta, know it, too. You just can't admit it.
Mark

Here's what I know. There are crooks and corrupt subcultures on both sides of the Rio Grande. A lot of the people who emigrate here (with or without their paperwork) are looking to get away from corrupt systems...and yes, I know that the political systems in these countries make our system (with ALL its flaws) look pretty good.

I just love that argument: You're all racists like me but you're too afraid of THEM to say what you believe. Actually no, Mark. We just disagree with you, because we have enough life experience to know you're wrong.
John Stark | 03.22.08 - 1:03 pm | #

Fair Economist writes:
triple what the house had sold for the year before

Oooh, I missed that. Irony of ironies, if the 430,000 price produced a payment 70% of her income she could actually have afforded the house had it been fairly priced. Not a good business decision to buy in 2005, but she could have made it.
Fair Economist | 03.22.08 - 1:05 pm | #

Tanta writes:
Looking at the story, I think the agreement not to sue Salgado and Hernandez is reasonable. They seem to have been defrauded too.

OK, now I'm worried.

You think those two were defrauded?

I have to ask: if your sister asked you, as a favor, to "invest" in RE by pretending to be the wife of a stranger, with the deal being you'd get any upside and if the worst happened you could take the house away from the stranger, would you do it?

Hernandez is guilty of mortgage fraud. No question about that. He signed a 1003 (uniform residential loan application) over verbiage that makes it a crime to lie.
Tanta | 03.22.08 - 1:06 pm | #

Marcus Aurelius writes:
Signing a paper that says you're married to another party, when you aren't, in order to receive financial benefit, is a crime, independent of race, creed, color, country of origin, language, sexual preference, income or educational level.

I'm not picking on the buyer, here, as there was apparently beaucoup criminality involved.

As Joe Friday was known to say, "Just the facts, ma'am."
Marcus Aurelius | 03.22.08 - 1:07 pm | #

Tanta writes:
liberal, I think he's talking specifically about the RE transfer/co-titling thing, not the mortgage part.

There's no question someone lied to a lender.
Tanta | 03.22.08 - 1:08 pm | #

SGV writes:
Lord writes:
Sure the seller may have been involved, but there is no evidence of that. Sellers generally don't have access to the buyers financial details, so wouldn't even be in a position to evaluate the buyer. That is the job of the lender and the job of escrow/title to see that the sums balance out. While there probably are sellers involved with this, it is not as sellers they are predatory. Sellers can't be predatory. They are just the other half of the transaction, looking out for their interests. This is just more lenders trying to shift the blame from themselves.
Lord | 03.22.08 - 12:40 pm | #

What Lord said, plus....

In my experience as a seller, we are in a position to trust that the buyer, buyer's agent, lender and title, etc, etc, are doing their do dilly and everything is honest and legal. I couldn't begin to know how to verify the work of those others...

What comes to my mind is that the sellers have to be very careful with regards to Fair Housing Laws...What are your thoughts, Tanta, on how the Fair Housing issues come in to play in a situation like this?...assuming the seller is not involved.
SGV | 03.22.08 - 1:08 pm | #

Bill Melater writes:
What you said, Marcus.

The underlying, overarching fraud started with lending vast sums of money to... anyone... no questions asked. Not just lending but badgering the entire country to come into the bank to pick up large sacks of dough to become real estate millionaires.

Gangs of people didn't spontaneously assemble in front of banks, pounding on the doors, demanding large wads of cash because they said so.

Banks and mortgage companies force-fed the no-questions-asked concept on the doltish public for years.

Still, this would all be small potatoes if the pass-the-hand-grenade game (the derivatives market,) hadn't expanded like a cancer.

Prison time. Rock breaking. Leg irons. And not just a few examples pour décourager les autres. Whoever mentioned RICO recently had the right idea.
Bill Melater | 03.22.08 - 1:10 pm | #

YLSP writes:
Real Estate hasn't been "fairly priced" for 5 or 6 years now where most people live (which constitute most of the bubble countries). Even with all of the ideas floated by the FED, etc.... it's still not going to solve the underlying problem of the bubble, right? So they can do something like keep the house prices inflated (which more state/local govts will clamor for as they lose tax money... who are the crooks again?)... but they can't do anything to entice buyers. Even a $15k incentive is pennies when you are talking about a $400k 50 year old 2 bedroom condo in an area where median income is $65k.

Frauds/cheats come in all different skin colors, surnames and ethnic backgrounds.... as do honest people.
YLSP | 03.22.08 - 1:11 pm | #