More Evidence Of How The Real Estate Bubble Was A Result Of Fraud
Posted by admin under: Main Dec 26This is something that people should be aware of. real estate did not go up as a result of normal market results. It was falsely created and propped up by unscrupulous lenders, real estate developers, and others. Now we have the fallout and it will end up being another burden the taxpayers will have to pay for while the ones who caused it go unpunished.
Officials Falling Behind on Mortgage Fraud Cases
By JOHN LELAND of the NYTimesThe number of mortgage fraud cases has grown so fast that government agencies that investigate and prosecute them cannot keep up, lenders and law enforcement officials have said.
Reports of suspected mortgage fraud have doubled since 2005 and increased eightfold since 2002. Banks filed 47,717 reports this year, up from 21,994 two years ago, according to statistics from the Federal Bureau of Investigation and the Financial Crimes Enforcement Network of the Treasury Department. In 2002, banks filed 5,623 reports.
Mortgage fraud covers crimes like false statements on mortgage applications and elaborate “flipping” schemes that involve multiple properties and corrupt appraisers, title companies and straw buyers.
Here in Miami. there was one company who formed a group of investors. Developers need to presell enough units to get financing from banks. This company would take the money from it’s investors and buy up enough units in a development to help the developer get bank financing, making it appear that there was enough interest in the development to warrant the bank’s investment.
The developers in return would guarantee that the company could not lose on their investment in the units they bought and would make up the difference if they did have to sell those units for less than they paid for them.
They aren’t being prosecuted and people just say, “well that’s business.” No it isn’t. It’s fraud.
The Rest of The Story here
Source: More Evidence Of How The Real Estate Bubble Was A Result Of Fraud
Wednesday, December 26th, 2007 at 11:34 am and is filed under Main. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.