Sonoma Housing Bubble

Pulling the cork out of Sonoma's bubbly housing foolishness

Friday, October 27, 2006

Trainwreck of Fraud...


From SFGATE.com - "...a real estate agent called me. "I think I have a scoop for you," he told me, his voice vibrating with gumshoe grit. He'd heard that a prominent East Bay company was training its agents to inflate properties by $50,000 to $150,000, then have sellers return the cash after the close of the deal. Unlike the arrangement with the developer, these deals were concealed from lenders by adding the cash-back arrangement onto an addendum apart from the purchase contract."

"How did my friend hear about this practice? A local manager of a prominent real estate company had tipped off my friend's broker over lunch. The manager, who had been shocked at the behavior, had then gone back and looked at his own agents' files to see whether the practice ever happened in his own office. "The guy said he found so many in his own files in the past couple weeks, he didn't want to look anymore," my agent friend said."

"What exactly was happening here? The developer didn't think he was doing anything illegal, and the broker had no idea the inflation was happening under his watch. But in both cases, everyone involved probably would have been considered at least partially culpable if the lenders could mount a case that they were being deceived."

"Welcome to the convoluted world of mortgage fraud, a crime in which it's sometimes hard to disentangle victim from criminal, and crime from business as usual."

"Why? In the years of booming appreciation and bargain-basement interest rates, real estate has become a national obsession. With it have come certain run-of-the-madness practices. Appraisers agree to inflated property values. (By next month, the market will go up so much, they'll be valid.)"

"Agents write offers with increasing amounts of cash back. (How else can the poor homeowners get that Viking range?) Mortgage brokers play the "we'll get you that loan no matter what" game of social engineering. (How else can schoolteachers buy a home?)"

"But now the proverbial vultures have come home to roost -- mortgage fraud is being busted left and right. This month, the most spectacular example so far was reported in the Wall Street Journal: an $80 million federal grand jury case involving more than 100 homes in Indiana."

"Also, last year, one of the largest property owners in Buffalo, N.Y., was convicted of perpetrating a $4 million fraud-for-profit scheme, sentenced to a year in prison and slapped with a $1.5 million fine. Last July, the New York Times reported on the precipitous rise in mortgage fraud, quoting the FBI that lenders lost an estimated $1 billion last year, double the previous year's estimate, from mortgage fraud. (For a thorough list of recent cases, visit MortgageFraudBlog.com.)"

"Recently, a developer regaled me with a story about a house that seemed to be cursed. Although he beautifully renovated it and priced it below market, the Oakland bungalow just wouldn't sell. Deals fell through repeatedly for bizarre and unrelated reasons: Buyers got cold feet, or moved -- one was even arrested. By the time the fourth deal collapsed, the developer was in an acute state of financial panic. "

"So, when one of the mortgage brokers who had helped a previous prospective buyer called with a new one who would close the deal for -- get this -- $100,000 over the asking price, he naturally jumped at the offer. "

""The catch was that I had to give the $100K back to them after the close of escrow," the guy told me, still looking shell-shocked. "I couldn't understand why they would want to do that. The place was completely remodeled." (Most buyers who get cash back after escrow pour that money into repairs. Typically, though, lenders like to keep this amount to no more than 3 percent of the purchase price.)"

"The developer went through with the sale, wondering what his buyers (whom he never met) were up to. Because he wasn't lying about anything -- everything was disclosed on the purchase contract -- he didn't feel he was doing anything wrong. "

"As crimes go, mortgage fraud is hard to get riled up about. In many cases, the victims are institutions that earn billions of dollars a year. Even the banks have colluded in creating products, such as negative amortization and stated-income loans, that sometimes seem to encourage irresponsible borrowing. And straw buyers may claim they are victims, but, let's face it, they were motivated by the promise of easy money, so they are also perpetrators. (Of course, those whose identities were stolen are innocent.)"

"Whatever the case, it's important that we don't allow mortgage fraud to continue as one of those little illegal real estate things everyone does. Just as credit card fraud ends up on all our monthly bills, homeowners end up paying for lenders that get defrauded. As the saying should go, there is no free mortgage."

5 Comments:

At 10/28/2006 04:28:00 PM , Anonymous Jack Olson said...

NAR (National Association of Realtors) released figures that 40% of all 2004/2005 home purchases were allegedly for Second Homes, an all-time high. Ha Ha. How many were Occupancy Fraud/Mortgage Fraud as how about those For Rent ads in the RGJ with the property address in them at close of escrow while signing the lenders' Second Home Rider(s). That's what's really driving the downward Reno market adjustment. The Realtors were the biggest Fraudsters of it, their clients the second biggest Fraudsters. Mortgage Fraud is the main culprit for our drive up in prices a couple years ago and the drop in prices we are still experiencing, and will continue to experience for another couple years, with all its resulting collateral damage to our community. Mortgage Fraud creates a buyer. Result? A fraudulent drive up in demand. The Fraudster Realtor doesn't care, he gets his commission. All the Fraudster Realtor is representing is his commission. His commission is part of the purchase price. Realtor's commission is the signle largest fee by far in the purchase price. A Realtor involved in Mortgage Fraud has an unfair advantage over Realtors that don't. Same for loan officers and escrow officers involved in Mortgage Fraud. Until all the real estate agents and their brokers understand that and stop the real estate agents and their Brokers orchestrating the Mortgage Fraud, the Mortgage Fraud just continues to escalate. Our community continues to suffer as the prices continue going down, leaving the innocent ones, us locals, owing more than the property is worth. It's easy to learn why Reno is forecast to be hit so hard for drop in housing prices. Any title company can pull for free all the Second Home Riders in the Washoe County public records from the last three years. Some Reno Realtors have several Second Home Riders on their Reno properties, (from several different lenders to hide it from each lender) and their client's Reno properties all located within a few blocks of each other. Then match the dates of those Second Home Riders up with the dates of the For Rent ads with the property address in them being run at close of escrow in the public record RGJ. Voila, instant Title 18 violations, federal felonies. Gosh, you can even match the telephone number in those RGJ ads up in the public record reverse directory and find out it belongs to a Reno Realtor who didn't put his NRS 645 required Broker disclosure in any of the rental ads. A quick check from the NV RE Division reveals neither the agent or his Broker had the NRS 645 required property management permit while they managed these properties. Every mortgage payment made under these fraudulent loans is probably made by mail or wire, so instant Mail or Wire Fraud, more federal felonies. And that's why Reno's home slump is forecast until 2008. Don't believe it? Look it up. It's all there in the public records. What if you bought in the last couple years and your home is now worth less that you owe on it and you have to sell? Can't sell it as you owe more than it's worth. Can't rent it as your payments are way more than what you could rent it for. Negotiate a short sell with the lender(s) but pay taxes on the forgiven debt when the 1099-C arrives in your mail the following February. Go into foreclosure. Who ya gonna call? An attorney. Who ya gonna blame? That answer is all in the public records.

 
At 10/29/2006 08:24:00 AM , Anonymous trailer trash said...

Speaking of fraud, CASEY SERIN is the poster boy for everything that's wrong with today's real estate market.

Casey is not one to let $2,200,000 worth of delinquent shady loans, gross over-leveraging, $140,000 in credit card and credit-line debt, five houses in foreclosure and the prospect of bankruptcy slow him down. Casey Serin is back in action! Or is it inaction? Whatever. He now has a special "position" with his "Rich Dad", who has become his real estate mentor. Casey has taken a "job" as an unpaid Internet Technology Monkey in exchange for the use of free office space. HERE, he can be seen with his blue eyes, in his blue shirt, sitting on his blue exercise ball, with his blue Dasani water bottle and his blue patch cord.

Notice how Casey stares intently at his computer screen as he emails his buddies, writes to his blog and goofs on the Internet while looking for great real estate "deals" to show to his new boss. Click on this picture and it can be jumbo-sized and used for wallpaper. PROBLEM: This obviously-staged photo missed one important detail: At the bottom, left side of the desk there is a visible kegger cup.

"Nine to Five at My Rich Dad’s Office."

Casey has set down some strict work rules for his new job: "I will not work more than 8 hours a day. Monday through Friday 9am to 5pm or something similar. This way I’ll have room for daily exersize, social life and a full night’s rest. No working on weekends. I will keep all work in the office. No taking work home.."

Originally, Casey reported that his financial problems had caused him to plunge into the depths of despair. But now that he has bared his soul and confessed to his crimes, he has become perky, upbeat and disgustingly-hopeful and optimistic about his situation. This whole confession deal has apparently satisfied Casey's desire to be chastised for his real estate crimes. He asked his readers for comments about his new unpaid position, as well as comments regarding the rigorous work schedule he has created for himself. Here are excerpts from a random sampling of the responses he received:

*** *** ***

"Yeah, I’d love to hire some punk who watches the clock, doesn’t take any work home to get things done on time, and spends his time during work hours blogging. Guess what shmuck...you already missed the dot com bubble…"

"Man, at least when you were depressed you were in touch with reality."

"You are nothing more than a lazy, deluded slacker."

"Nobody with a brain buys your spin and rationalizations. It borders on insanity."

"So… your plan for repaying the $2,200,000 of debt you’ve run up through real estate speculation is by… speculating in real estate?!"

"I want so bad to believe this is all some crazy hoax. But I know it isn't."

*** *** ***

Oh, I almost forgot about Casey's exciting new WEBSITE. He's really on to something here. If shady real estate deals got him into trouble, surely, more shady real estate deals can get him out of trouble.

"Able Buyer of Sacramento -- It's always a good time to buy!"

Own a Home with No Banks...
-Remodelled Homes with Seller Financing.
Pickup a Sweet Deal...
-Fixer-Uppers at 20-50% below market.
Cashout and Walk Away...
-We Buy Houses Fast. No Equity No Problem.
Get 12-24% Return...
-High-yield notes secured by Real Estate.
More info coming soon...

Nobody knows real estate better than Casey Serin. I only hope he can continue to blog from prison.

 
At 11/12/2006 10:36:00 AM , Anonymous Anonymous said...

John,

Casey is deleting my posts. The site is a total scam. I posted links to the Sacramento County and Stanilsus County clerk's office where it showed the Notice of Defaults, and also that his relatives own or have owned multiple properties.

Go to those web sites:

Sacramento County Clerk:

http://www.erosi.saccounty.net/Inputs.asp

Type in "SERIN" and "2000" for the decade.

Who's Aleksey & Anna? Didn't Casey admit that he used Aleksey's email 10 years ago for that PONZI scheme? Look at all those properties... hmmmm

See under Casey's name the information?

Now, go to Stanislaus County and Placer County web sites:

http://www.criis.com/

In Placer County, look under "Fictitious Names Search" and type in "SERIN".

Doc Nbr Date Business Name
2005-0001097- 15-APR-2005 FINCH PROPERTIES

Owner SERIN, CASEY

Owner SERIN, GALINA


Doc Nbr Date Business Name
2006-0000435- 14-FEB-2006 ABLE BUYER

Owner SERIN, CASEY K

Owner SERIN, GALINA

These are two different REAL ESTATE companies that he AND his wife , GALINA established. The first in MARCH of 2005.

WHY no explanation of these?

Now, for Stanislaus County,

http://www.criis.com/stanislaus/srecord_current.shtml

Type in "SERIN". Here you will see the Notice of Default.

Casey will not answer my questions regarding these items. He chose to DELETE the posts instead.

I agree with you that he is a con artist and that the site is a scam.

You need to pressure him on this.


Dumb & Dumber

 
At 12/06/2006 02:26:00 PM , Anonymous Anonymous said...

Aleksey was Casey's first name before he Americanized it.

 
At 12/07/2006 11:49:00 PM , Blogger sercasey said...

I kept Galina's name of the blog because she asked me to. And Aleksey is not my original name, its actually my relative's name. I was using his email address when I posted the newsgroup message back when I was 14 years old. You guys are reading too much into it.

 

Post a Comment

Subscribe to Post Comments [Atom]

Links to this post:

Create a Link

<< Home

My Zimbio
Top Stories Bloggapedia - Find It!

Estate Real, House New

Housing Crisis

Free Site Submit by
SiteSubmitService.COM