——the “investors” obviously never heard of Carlo Ponzi-—
We have one in Bakersfield: Crisp and Cole.
Its bottom fell out a couple of months ago, with the FBI apparently at the helm of the round-up.
Related news reports on this mortgage fraud case:
“The man in the center” - http://www.pe.com/reports/2007/wealth/stories/PE_SR_20071118_duncan.d5cf6f1.html
“Early warning explained away” - http://www.pe.com/reports/2007/wealth/stories/PE_SR_20071118_lanuzo.d5e5918.html
“Key players: Among the people named in lawsuits filed by investors” - http://www.pe.com/reports/2007/wealth/stories/PE_SR_20071118_bios.d5a1ef6.html
“Companies named in investor lawsuits” - http://www.pe.com/reports/2007/wealth/stories/PE_SR_20071118_firms.d5db12e.html
“E-mail exchange: How crisis grew for one clergyman” - http://www.pe.com/reports/2007/wealth/stories/PE_SR_20071118_emails.d5f15c5.html
The cornerstone was greed, pure and simple. I have absolutely no sympathy for the speculators. They drove the price up on us all.
The FBI in Chicago has predicted that mortgage fraud is the coming tsunami that will engulf the nation in a wave of fraud within the next two years.
www.chicagotribune.com/news/specials/chi-mortgage-1-story,0,5744461.story
chicagotribune.com
‘If you are still making money selling drugs, you are an informant or about to be busted.
Mortgage fraud is the thing to do now.’
By David Jackson
Tribune staff reporter
November 5, 2005
A white-collar crime wave is raking Chicago’s poorest communities, robbing vulnerable families of their homes and draining billions of dollars from the U.S. economy.
During the last five years, as home loans became easier than ever to get and identity theft blossomed, mortgage fraud surged.
FBI officials say it now threatens to become a national financial epidemic. Gang members call it “the new street hustle.”
I wonder what these people think when they see a get rich quick on real estate info-mercial now?
The problem with taking that cash kick back on that over inflated appraised value when they short term financed those “investment properties” is that all it really was, was a second mortgage.
Greedy people that never thought this scheme through properly is what this is. It will sort itself out if the government would just leave it alone.
I have no sympathy for the greedy.
Wow. I live in the area, this is big and bad.
I feel no remorse for those much wealthier than I.
“Tsunami” alert.
I think last week it was “fire and brimstone.” Or locusts. Or frogs. Hard to keep up.
Scott Grossman, a lawyer representing Stonewood and Hendrix Montecastro, said investors are responsible for the truthfulness of their mortgage applications and cannot dispose of that responsibility by saying they signed papers with blanks that were filled in by others.
"It is a principle in California law that you cannot accuse someone of defrauding you if you were a willing participant," Grossman said.
Real estate bubbles are one of the worst things that can happen to a modern society, short of catastrophic natural events and total war.
Alan Greenspan encouraged this particular manifestation.
I have to read “Memoirs of Extraordinary Popular Delusions and the Madness of Crowds” this afternoon, as it will be overdue soon.
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The script/talking points used by the perps to con their targets:
http://www.pe.com/reports/2007/wealth/Script.pdf
There have been similar schemes in other areas and they’ve happened before.
They run-up prices higher than they should have been and it always involves some company that promises to make payments for them.
Aside from the larger-scale ramifications, it gives legitimate real estate investors a bad name.
You pays your money.
You takes your chances.
Investments really can only go up, or they can go down.
If you buy a mutual fund. It can go up, or it can go down. If you buy that mutual fund on margin, you can lose a lot of money, if it goes down.
Same with real estate.
Buying a house, with a no-down mortgage, is like buying equities on margin.
Except, without the margin requirement.
A lot of people, decided eventually after watching real estate soar skyward year after year, after year, while their friends and co-workers mentioned how many millions of dollars (literally) they were now worth simply from rampant real-estate value appreciation.
And they finally. In desperation, and with clouded judgement, concluded they would never be able to buy anything ever, unless they hurried up and did so RIGHT NOW.
Buying ... right at the top.
It’s sad so many didn’t remember, whenever there appears to be a “new paradigm”, it always means, a bubble is about to burst.
Now it has.
Investments now, are going down.
That happens.
Investments which never go down, are not investments.
They’re called welfare.
Sorry, no sympathy at all. Boom times always bring out shysters looking to scam innocent people. The smart innocent people say “if it seems too good to be to be true, it is.” The dumb innocent people get greedy and talk themselves into being taken by these “can’t miss” deals. All the warning signs were there.
They just got greedy. They got tired of working hard and saving and wanted the quick easy kill. They wanted something for nothing and fell for the promise for it. Greed will get you every time. I hope they learned way you don’t get something for nothing. Sorry they had to learn the hard way. Just hope the shysters do real time.