How is it possible to get into so much debt...

[dullard]

Originally posted by: Vic
Dullard, banks DO NOT tell people that homes are worth more than they actually are, or encourage people to buy homes for more than they are worth. I've explained this to you in the past, and I do not wish to go over it again. Brokers, realtors, and appraisers do not work for the lenders, and lenders actively work to protect themselves from this type of fraud. Unfortunately, they can't stop them all, nor can they predict market trends, nor should they be expected to. There comes a point when the buyer has to be responsible for something.

Here is a clarification. You misread what I typed. Thus, I edited it above to be more clear.

I wish that these two groups would both realize their problems in these transactions:

(A) banks and
(B) the people telling him the homes were worth $100k more than the selling price.

It was not my intention to say that banks tell the buyers their homes are worth $100k more than the selling price. But I clarified (without changing the wording at all) with the letter A and B.

I know for a fact I've never said banks tell people homes are worth more than they are. You are confusing that with my complaints about appraisers. Two different entities. Yes, the buyer has responsibility for these problems. But also, the banks should have a system in place where they see he has $2,000,000 in mortgages and nearly $200,000 in CC debt and reject the loans.

Also, the people telling him the house is worth $300k+ when it is selling for $190k need to realize they contributed to this problem.

Ultimately the buyer is to blame. But the buyer couldn't/wouldn't have done it without these accomplises. The industry as a whole needs just a few more checks in the process to help the idiotic buyers from doing such transactions. That is true even if the buyer is trying to commit fraud. There needs to be a little bit more fraud prevention.

 

[DaShen]

Originally posted by: Don Rodriguez

Originally posted by: mugs
I hope nobody donates any money to that tard.

QFT mugsy

Agreed

 

[Vic]

Originally posted by: dullard

Originally posted by: Vic
Dullard, banks DO NOT tell people that homes are worth more than they actually are, or encourage people to buy homes for more than they are worth. I've explained this to you in the past, and I do not wish to go over it again. Brokers, realtors, and appraisers do not work for the lenders, and lenders actively work to protect themselves from this type of fraud. Unfortunately, they can't stop them all, nor can they predict market trends, nor should they be expected to. There comes a point when the buyer has to be responsible for something.

Here is a clarification. You misread what I typed. I edited it to be more clear.

I wish that

(A) banks and
(B) the people telling him the homes were worth $100k more than the selling price

would both realize their problems in these transactions. It was not my intention to say banks tell the buyers their homes are worth $100k more than the selling price.

And like I said, banks actively work to protect themselves from this fraud. They don't just take the realtors' and appraisers' word at face value. They have extensive appraisal review and property valuation systems in place that are applied in varying degrees at underwriter discretion as necessary to each and every single property (Countrywide, for example, one of the lenders burned here, owns its own nationwide appraisal network, Landsafe). In the end though, they are in the business of risk, and a portion of that burden lies on the expectation that the buyer is competent enough to make at least a relatively sound decision.

edit:

. But also, the banks should have a system in place where they see he has $2,000,000 in mortgages and nearly $200,000 in CC debt and reject the loans.

If you read the USA Today article, you will see that he bought all the properties within the span of a few months. It is normal for credit reports, etc. to lag behind a couple of months in reporting (particularly with new accounts), so it almost a certainty that another of the frauds he committed was the failure to disclose all of his debts.

 

[dullard]

Originally posted by: Vic
And like I said, banks actively work to protect themselves from this fraud. They don't just take the realtors' and appraisers' word at face value.

See my edit. They don't work enough to prevent fraud. Finally, one bank discovered it and rejected a loan. Why couldn't the other 7 banks detect it? If only 1/8 fraud detections succeed, the fraud detection isn't sufficient. Also, taking the appraiser's word at face value has no impact on this case, so I'm not arguing that part. Here is the issue:

"The wholesaler said the property was appraised at $310,000, and the owners would sell it for $190,000, but it had to close quickly. Unable to get another loan so fast, Serin went to a private lender, who appraised the property at $275,000."

No, the first $310,000 was NOT taken at face value. Good for the lender. The lender did right in that situation. However, that "wholesaler" helped contribute to the problems by saying a house selling for $190k was worth $310k. I thought you've always argued that a house is worth what the market pays for it. Are you changing your mind on this transaction?

 

[mugs]

Originally posted by: JEDI

Originally posted by: BarneyFife
I found this blog a couple weeks ago http://iamfacingforeclosure.com/ and have been following it daily. Its reality tv on the internet. This 24 year old managed to get over $200k in unsecured credit and nearly $2 mil in mortgages without any assets or a job. How is this possible? Their are people with jobs and get rejected for much smaller mortgages.

he lied on the apps. but he'll walk away with bankrupcy w/o a problem.

the bansk have something called due dilligence. apparently, they didnt do that, so he's off scott free

We can only hope they nail him for the fraud.

 

[dullard]

Originally posted by: Vic
If you read the USA Today article, you will see that he bought all the properties within the span of a few months. It is normal for credit reports, etc. to lag behind a couple of months in reporting (particularly with new accounts), so it almost a certainty that another of the frauds he committed was the failure to disclose all of his debts.

I did read the article. And right there you pointed out a flaw in the system. There should NOT be such a delay. A system should set up so that there aren't months of delays. Banks do well with what they have, but what they have is insufficient. I think you confuse that with the idea that "banks are doing poorly".

I'm not saying that you, Vic, commit fraud in your job. I'm saying that you don't have enough tools and/or current data to prevent many forms of fraud. Big difference.