Fraudtastic Times at 176 Lewis Avenue
We were browsing the upcoming foreclosure auctions listed on Property Shark when this one at 176 Lewis Avenue in Bed Stuy caught our eye. Check out the action on it back in the fall of 2006: The lender handing out that $675,000 mortgage must have really done some hard work on that appraisal! 176 Lewis…
We were browsing the upcoming foreclosure auctions listed on Property Shark when this one at 176 Lewis Avenue in Bed Stuy caught our eye. Check out the action on it back in the fall of 2006:
The lender handing out that $675,000 mortgage must have really done some hard work on that appraisal!
176 Lewis Avenue Profile [Property Shark] GMAP
Oh. Ok, that gives me pause. But it still burns my butt that are essentially shoring up fraud in the process.
Snappy – cause it’s not just banks that hold the securities – it’s also good guys like pension funds!
Oh, and if Maly scenario is in fact the case why the eff is the government shoring up/bailing out this bullshit? Though I have no real knowledge in this arena, I feel like saying ‘let the shit fall, financial institutions and all.’
Maly, got it, thanks. So what’s the way to prevent this from happening? Or is there a way?
…and Goldman gets investigated by the SEC, settles for half a billion, which causes them jubilation because this is a tiny percentage of the profits were making back then trading crap MBS (and much less than many expected they’d have to pay). Their stock price jumps with the unpleasantness behind them.
Someone buys a shell for 375K, and the same day mortgages the property for 675K through a fake transaction. Everyone took a slice: the mortgage broker, the flipper, the straw buyer, the lawyer and the appraiser.
The mortgage defaults immediately, but the bank (New Century Mortgage in the case) has already resold the loan as a package for investors. Repeat the process over 20 or 30 properties, and you’re talking millions of dollars for the scammers. Repeat over 100’s of scammers all over the US, and you’re talking billions of truly worthless Mortgage Backed securities (MBS.) Then John Paulson picks the most fraudulent and worthless MBS, Goldman Sachs packages & sells them to Deutsche Bank and others. When everyone realizes that the house of cards is falling down, the government has to step in to guarantee the major financial institutions, lest we experience a 1929-style freefall.
So Jessi, now that the thing appears to be up for auction, that means the mortgage was never paid, buyer and seller walked away with huge cash amount, purchaser of the mortgage assignment left holding the bag and is essentially assed out? And the name on the mortgage, this MERS company, is shady and going out of business/will file bankruptcy and the loan never gets paid? If yes, YIKES!
Snappy – Buyer and seller pretend purchase price is waaay higher and get a mortgage in the higher amount and split the proceeds. This bank doesn’t care because it sold the mortgage (and got paid back) the second it issued it!
Ok…I’m slow. What am I looking at here? Can someone explain what the above shows?