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Editorial Comment
FBI:
Mortgage Fraud is Rampant in US
by
The Associated Press
September 18,
2004
See:
link
EDITOR'S
COMMENTS
by Ole Bear
Gee Whiz! Mortgage Fraud is Rampant in the USA, having the "potential to be an epidemic" according to Chris Swecker, FBI assistant director for criminal investigations, which one "can find anywhere in this country." The Associated Press's little essay is short, sweet, and to the point. This article has even made the financial channels on BubbleVision such as CNBC on Friday, September 17th! So what else is new? This is perhaps the greatest mea culpa since Alfred E. Newman's "What, me worry?'
The essay describes the fundamentals of property flipping, fake identities and credit histories, and straw buyers. Generally there is a fraudulent realty valuation of the said realty in question as part of the scam. The end result is that the mortgage lender is left holding the bag [actually the taxpayers are holding the proverbial bag] on an inflated property [Poor Baby!]. Billions of dollars in potential losses are described to amount to about $3 Billion FRNs [Dollars to you, Federal Re$erve Notes to me] as a result of 151 charges being currently investigated. Dream on! The potential losses are in the Trillions, Folks!
We find it interesting that Missouri is targeted as one of the "hot spots" where mortgage fraud is prevalent! Seeing as how I have dossiers on five properties and five realty valuation folks in my central Missouri region where I suspect mortgage and appraisal fraud to have taken place over the past 2-3 years, tell me something I don't know, please! From our field experiences and dossiers, we were able to create our Toy Boys of Fraud essay series on how this really works in the micro realty market here in the Show Me State. This essay even made ScoopNZ in March of this year in its original version.
The Associated Press essay, although it identifies some of the ways the mortgage lender folks are hoodwinked, and definitely implies that it takes two to Tango in the fraud schemes, the nice mortgage folks are portrayed as being the "good guy." With the large degree of lender client pressure on appraisers to hit a number, use of drive by appraisals, the Fannie Mae Form 2055 [as well as other spurious valuation reporting forms, such as the 2060, 2065, and 2070], the use of blacklisting honest appraisers, the use of the AVM [alternative valuation model], and moving realty appraisals off-shore to Pakistan and India [and only God knows where else], isn't this a great mea culpa on part of the Federal Re$serve, the FED's Bastard [bloated, false, spurious] Step-Children, [the GSEs who operate as a second central bank anyway], and the nice mortgage lending industry folks, who have created the greatest money pump to Wall Street in the Histories of the Markets since Tulips in Holland and Inflating Assignats at the time of the French Revolution? To portray the mortgage lending money pump as completely innocent in the Tango of Mortgage Fraud tells me that the nice FBI folks are asleep at the switch. Now we have Fannie Mae with the stoke of a pen changing USPAP through their assassination of the URAR residential appraisal report form in lieu of a form which is easier to forge, fake, and mislead lender clients [who don't care if they are hoodwinked at all!] All of this is the result of The Fraud of Appraisal Regulation, FIRREA 1989! Nope, let's not forget that HUD, FHA, and the VA are part of this lender pipe food chain as well, so Alfonso Jackson, when you warn appraisers -- "Don't play games with appraisal. Don't fool with the numbers or turn a blind eye to the obvious property defects. If so, prepare to face severe financial penalties" [1} -- who's kidding whom, Mr. HUD Secretary? "One good thing from Jackson's utterances is that he warned lenders that they too will be penalized if they knowingly make loans based on inflated values. [Isn't this fraud, Secretary Jackson?"] [2]
The Communicator Mag's editorial that we cite goes on to say that Secretary Jackson's remarks to the realty valuation community are "insulting" and that the realty valuation community is one of the most regulated in the USA. It certainly is one of the most regulated and centralized trade groups in the USA under the mandates of the Federal Re$erve for an obvious reason -- to have been able to establish the greatest money pump in economic history of the global markets! To say that Jackson's comments are insulting to the realty valuation professional with honesty and integrity to say the least is just being damn polite -- they are just damn infuriating and imply ignorance is bliss on Secretary Jackson's part on housing, money and banking, and the fraud of FIRREA 1989 -- not to mention the covert fraud at HUD losing $59 Billion Bucks. We wonder if Jackson really understands how HUD is part of the Mandrake Mechanism which operates as a second central bank in the USA to pump money to Wall Street in the greatest real estate markets bubble in economic history? Grin! Secretary Jackson, where is the missing $59 Billion at HUD, Sir? Another, bigger Grin!
The banking cartel is responsible itself for mortgage and appraisal fraud in our view. They have set up the greatest lender food chain mechanism in economic history to cover up what's really going on in the micro and macro realty market level. They blacklist honest appraisers who tell it like it is with overbuilt markets, and properties of questionable condition, who take their time to complete valuations, and who charge honest fees for their work product, in lieu of quickie quiz turn around times, and cheap fees they [banking cartel] dictate instead of quality work at a fair price. Every major big lender has their own appraisal management company which are generally affiliated in some manner with professional realty valuation organizations or foundations, and are able to exert centralization and control over both designated realty valuation experts and those outside of professional organizations as part of the lender food chain mechanism currently in place. It seems to me the FBI Boys as well as Mr. Jackson need to go back to school to learn Lender Food Chain 101, before they get too carried away locking honest realty valuation experts up in Leavenworth! Perhaps the FBI Boys really need to start snooping around HUD first, before they really hit the streets -- could save 'em a lot of investigative time on Main Street America!
Our sources indicate that in the People's Democracy of California, that large numbers of SRAs [residential designation in the Appraisal Institute] are giving up their designations since it adds little to their income in this economic environment. From what we understand the AI dudn't really give a Tinker's Damn, won't lower the pound of flesh dues for SRAs, nor do much to improve their circumstances,[3] since they are so busy restructuring and alignment toward the banking cartel, and pushing AVMs down everyone's gullets, as the next best thing to safe-financial sex and sliced Wonder Bread.[4]
We are also informed that the People's Democracy [Mobocracy is another synonym for same] is projecting to have 10,000 trainee realty valuation licenses out soon, when it was about 5,000 a month ago.[5] We anticipate the quality of realty valuation work in California's Mobocracy to take a big nose dive in the immediate future as a result of this. At least the Associated Press essay on mortgage fraud does identify California to be a hot spot of fraud. I am afraid it may not only be a hot spot... they may need to build a new FED prison there to contain everyone they find dancing the Tango! -- since Leavenworth may be getting pretty much near capacity just from Missouri, Kansas and the other border states.
I anticipate more folks leaving the Appraisal Institute to be a National Trend -- not only residential specialists with SRAs, but commercial gurus with MAIs and SRPAs as well, since the same games are being played in commercial mortgage lending and realty valuation. Hey, what you expect in a Negative Return Economy! What, me worry? -- Alfred E. Newman
Ole Bear Editor
Footnotes:
[1] "Here We Go Again!," The Communicator Magazine, Summer 2004/Issue 34, page 10, Allison Iacopini, Managing Editor, Sand Diego, California, www.frea.com, from the issue's Editorial page, author unknown. Nope, this is not on-line at their website that I could find.
[2} Ibid., [1].
[3] from an email from one of my reliable sources.
[4] Ole Bear connecting the dots explaining how to follow the money trail.
[5] Ibid, [3].
© 2004 Realty Reality
