FOLLOW UP - Casey Serin
Well, it looks like Casey Serin shut down his website. Too bad that Google keeps a cache of sites. I will show you the last things he had on his site BEFORE he pulled the plug.
I don’t have time at the moment for a long post, but there is a LOT of good info in the comments on the previous post. That said, here is what Casey’s website showed after he took it down…but before it was completely taken down. His website only says ’stay tuned’ at this time. www.iamfacingforeclosure.com
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What I did was Stupid!!
September 24, 2006.
This blog was the WRONG kind of exposure. I APOLOGIZE to my friends, family, associates and especially EVERYONE WHO HELPED ME with my real estate transactions.
I DO NOT BLAME ANYBODY for ANYTHING and take full responsibility.
What started as an honest desire to share my experience turned into something dangerous - playing with fire. After talking to a business associate this morning I realized I went TOO far and shared TOO much. I turned something small into a big exaggerated mess. Others were telling me this too, but I wasn’t getting it. Now I crossed the line. I misused my ambition.
I have damaged my reputation and I have damaged many good relationships through this. I never meant to hurt anyone. So to stop any further damage I am shutting down and laying low.
I am sorry.
–
Casey Serin [email}
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Before he removed the info completely from his site, these were the last few posts. I guess he was featured in the Voice of San Diego before he axed his site. Here is the text of his site before it was pulled down. Sorry there are no pictures and the formatting might be off a bit.
I am Facing Foreclosure .com
– September 23rd, 2006
Voice of San Diego Reports on My Story
Thanks to Kelly Bennett for writing a fair and balanced article about my foreclosure situation on Voice of San Diego.
Here it is for your convenience:
My Life is an Open Blog
Casey Serin is a 24-year-old Sacramento man who bought seven properties in four states within the first three months of 2006. Even after selling a home in Utah a few weeks ago, he’s $2.2 million in debt and will be four months behind on all of his mortgages come October.
He started a blog to tell people about his experiences and his mistakes as a novice investor — it’s called iamfacingforeclosure.com.
I talked to Serin this afternoon and he told me he first got into real estate as a 19-year-old in 2002, buying a condo as his residence in Sacramento. Originally from Uzbekistan, Serin and his family immigrated to the United States 14 years ago. His parents own their home in the Sacramento area, but haven’t invested in any other real estate.
He sold that first condo in 2003 and made about $30,000 in profit, he said.
“That was kind of my first experience,” he said. “This real estate is a good business if you do it right.”
And, Serin admits, “a rising tide floats all ships” — he knows he was successful then primarily because of the appreciation in the housing market.
But he admits he had no idea what he was getting himself into when he started investing in properties earlier this year. He financed all of the mortgages 100 percent and has been paying only the interest on those loans. (Click here to read my story about the risks involved with those loans and their popularity in San Diego.) He used “stated-income” forms that don’t require lenders to do background checks to make sure the borrower actually earns as much as he says he does.
And another reason he was able to get so much financing was that he claimed he’d be living in each of the properties. Normally, only one property in an investor’s portfolio can be claimed as “owner-occupied,” and it’s easier to get financing on that property because it’s supposed to be your only property. (Investor property financing often requires much larger down-payments, to avoid cases like this).
“Some lenders told me, it’s no big deal, as long as you can say that [living in the property] was your intent,” he said. “I just feel that’s not right.”
Because Serin was applying for financing for properties in California, New Mexico, Texas and Utah within days of each other, the banks couldn’t trace the pending loan documents to check up on his story — so it looked like each one really was his only property.
Now he’s trying to figure out what to do. He got married two-and-a-half years ago and his wife is in school to get a degree in accounting. They’re living with her parents while he sorts out his debt.
“I’m an example of what not to do,” he said. “It was a combination of lack of experience and also, buying too much, too fast. I’m kind of an open personality. If my honesty helps somebody, great.”
While he characterized his goals in investment as buy-fix-sell, he said he doesn’t like to be called a “flipper .”
“I don’t like the word flipping because it makes it sound like you’re doing something illegal,” he said.
I want to add, that “flipping” is a misunderstood term and has a bad stigma in the media.
See Ron LeGrand’s article Flipping is Illegal.
Also, Steve Cook of FlippingHomes.com in his FAQ on Flipping puts it this way:
Flipping, also known as real estate investing or the buying and selling of a home, is not illegal in any shape way or form. There is absolutely nothing wrong with buying a home cheap and selling it for more then what you bought it for. There is also nothing wrong with buying a home, investing in fixing it up, and selling the same real estate for way over market value. If your buyer wants to pay you way over market value, and they have the means to pay you, then it is their choice. They can do that and so can you without any recourse.
The problem arises when a lender is involved. What people typically refer to as “illegal flipping” should be called mortgage fraud. The media has given real estate investors in general a bad name, because they aren’t focusing on the real problem. Without mortgage fraud, homes could not be sold for more then what they are worth when a lender is involved. Lenders want to lend based off of what a house is worth today. They lend at varying different Loan to Value ratios depending upon the borrowers credit worthiness. The problem with “illegal flipping” is when investors, mortgage brokers, loan officers, appraisers, etc… get together to “create” a better picture of a loan package to a lender. They do things such as inflating appraisals, gifting down payment, drawing up false w-2’s, manufacturing pay stubs, writing credit letters, etc…
– September 22nd, 2006
Is This a Scam? Why am I doing this?
Reading through the initial feedback I received, many people think that I am making this up. They think I’m just blogging about facing foreclosure to get traffic, exposure, leads, whatever.
You may also be thinking:
* Why would I share my financial details with the world and risk being embarrassed, criticized, made fun of or taken advantage of? Don’t people in distress normally want to hide and save face?
* Why would I admit to doing “shady loans” and risk going to jail?
* Am I really facing foreclosure on all these houses?
* How can I be so calm talking about my distress?
I was amazed that people mistake my honesty / confidence for a scam. However, I understand how that may be. I went from being embarrassed and distressed about my situation to being confident about overcoming it, learning from it and sharing it publicly. Maybe it’s my new-found confidence that made people suspect it to be a scam.
Nevertheless, I still feel down about the whole situation and feel sorry for making bad moves this year. But, instead of crying about it I decided that I will be writing about it.
Here are my goals for IamFacingForeclosure.com:
1. Market Non-Performing Properties. When I first realized I am facing foreclosure and that I need to sell all the houses very quick, I started marketing everywhere. I sent an email to everybody I know. I posted ads on craigslist. I brought my deals in front of investment clubs. Keeping track of all the details and keeping everyone on the same page was hard. I am using this website to solve the problem.
2. Sell Fast by Being Up Front. It was embarrassing at first to tell everyone that I’m in trouble. But then I figured, I will have the best chance to move my properties quick if people understand that the time is running out!
3. Demonstrate Genuine Hardship. I share my financial details to show publicly that I’m really in trouble. Banks want to see evidence of distress before they offer options like loan-modification, payment plans, or allowing a short sale.
4. Show You What NOT to Do. By telling my story honestly and in detail I have the best chance to help others learn from my mistakes. The lessons I’m learning are costly and painful. I don’t want people re-inventing the wheel like I did. Whether you’re looking to buy a house to live in or you are a beginner real estate investor. Learn from me!
5. Expose Shady Industry Practices. Too many real estate professionals encourage you to cheat and lie in. Yes, I am not innocent. But I decided to take a stand with this blog. No more compromise!
6. Expose Bad Real Estate Gurus and Education. Don’t get me wrong. There is a lot of good books, tapes and seminars out there. However, some of them teach you just enough to be dangerous. A lot of education is overpriced / incomplete / inaccurate / shady.
7. Help You Stop Foreclosure and Recover. Are you facing foreclosure too? I know the feelings of denial, desperation, helplessness and intense financial pressure you feel. As I learn and get out of my situation I can help you through my experience. I will help you to either save your home, or help you sell it fast. I want you to understand the foreclosure process, the time line, your options, forbearance, loan modification, short sale, etc. Know when (and if) to file bankruptcy. Learn how to rebuild your credit. Learn how to get back on your feet.
Bottom line, why this is not a scam:
A couple of weeks ago I sent an email to everybody in my address book - friends, family, real estate contacts, associates, past clients and co-workers. In the email I shared the situation and provided a link to this blog. Why would I lie to EVERYBODY and destroy my reputation?
You can check all the facts. Drive by the houses. Call the lenders and verify. Check the public record next month for Notices of Default. It’s all legit!
What do you think?
– September 21st, 2006
Brutal Comments and The High Cost of Honesty
I was featured on The House Bubble Blog with Attitude and received a flood of mostly angry comments. People are giving me a beating! (NOTE: it was the housingpanic.blogspot.com blog that ‘featured’ this story)
Yes I do deserve a beating. I fully own up to my mistakes and choose to take the consequences!
However, some people are taking it a bit too far with obscenity and just pure HATE. I had to delete a few comments to keep this blog PG. I am all for honest feedback but lets be reasonable.
So I enabled comment moderation. And NO I am not trying to silence the critics. Anybody who has something helpful or honest (but not overly brutal) to say will receive my approval. As you can see from my blog I am not trying to hide anything.
Aside from the brutality, there has been a lot of good and constructive feedback. You can look through the different posts in the sidebar and check out the comments.
On the constructive side, I did receive some good advice from Osman, a real estate blogger in Colorado. Thank you.
The High Cost of Honesty.
It’s true I got into some shady loans this year including….
1) Calling investment properties OWNER OCCUPIED
and
2) Stating a high income that I can’t prove
But…
Shall I continue to lie to cover up my old lies??
That’s not right!
I am braking the lie cycle. On this blog I will tell the world the full truth. I will take whatever consequences that come as a result.
Some future topics will include:
* The truth behind stated income loans aka “Liar’s Loans”
* What some mortgage brokers will tell you to make a quick commission check
* The truth about owner-occupied loans and ” the intent to occupy”
* The truth behind cash-back at close
* Consequences of lying on your mortgage application
* Does “flipping houses” cause housing inflation ?
* Is buying, fixing and flipping houses wrong / illegal?
* Do “house flippers” improve neibhorhoods and provide credit-challenged buyers a way to realize the American Dream and Pride of Home Ownership?
* Is it wrong to make a profit while providing a valuable service?
* The consequences of not having a solid exit strategy or two.
* The result of not having a business plan
* The effects of the “Get Rich Quick” mentality in housing
* How the Real estate Gurus teach you just enough to be dangerous
* The true cost of fixing houses with no construction experience .
* When and why should you file for bankruptcy?
* Can you go to jail for mortgage fraud?
* And more on my situation, selling houses quickly, foreclosure, short sales, subject-to, etc…
* Did I miss something?
Hopefully people will learn from my mistakes and be positively encouraged by the way I handle it.
The Truth Hurts… as they say.
– September 20th, 2006
Very Honest “For Sale By Owner” Sign
Honest For Sale By Owner Sign
My For Sale by Owner sign for Muncy Modesto property with I am Facing Foreclosure. com address and my phone number.
I’m really putting myself out there and taking a risk by being honest about my situation. Hopefully people will sense the urgency and help find me a buyer.
I was a little embarrassed putting up this sign. Good thing I was there mid-day and nobody saw me. Although, after I put it up and started leaving I saw a neighbor from across the street go over to pick up a flyer.
Buyers may try to exploit my weakness. They tell you to negotiate from your strength, right? Is being honest = weak? I don’t know. I don’t really want to negotiate anyway. My terms are pretty straight forward. I just want some cash and walk away.
I will need to put on a thick skin. This may cause me to become the talk of the neighborhood. People might laugh, criticize or ridicule. The concerned parents of teenage or 20-something kids will tell their kids “See! This is what happens when you take dumb risks!”. Some may think “Facing Foreclosure .com” is just a ploy to make a sale.
I don’t care… I’m desperate.
– September 19th, 2006
Not Your Typical Flyer
Here is a flyer that I put together for the Muncy property. The big “I am Facing Foreclosure” will hopefully attract extra attention. I am going down to the property today and will put up a For Sale By Owner sign and put my flyers in the flyer box.
Muncy Modesto CA Flyer
I offer owner financing “takeover my payments” as an option. The flyer includes information on my loans as well as a break down of all the costs to justify the price.
I’m getting ready to list this property on MLS with a flat fee broker for only $249. Of course I will still be offering 2.5% to the buyers’ agent.
The MLS listing and the I am Facing Foreclosure flyer should help me sell the property quickly.
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Well, there you have it. It will be interesting to see what happens to this whole situation. I am sure that we will hear more about this in the future. Keep the comments coming. I will have more content coming down the pipes.
Stay tuned…
SoCalMtgGuy
September 25th, 2006 20:26
Too bad he shut down his site. The comments he received from many of the bloggers from your site and Bens blog were some of the best entertainment I have ever seen. I was laughing for hours.
His site was one for the Housing bubble history books.
SoCal.. your site too will be a good blog for the history books on this housing bubble. Keep up the good work.
September 25th, 2006 20:29
Thanks Bubble Butt!
Send me an e-mail when you get a chance…
SoCalMtgGuy
September 25th, 2006 20:38
Great House Flipping site!
http://thisoldhouseflip.blogspot.com
September 25th, 2006 20:40
I think there is one post missing from your cache! Casey also made a comment on this post: http://boulderrealty.blogspot.com/2006/09/facing-foreclosure.html
where he mentions that his last post, on 9/24/06 was entitled
“Will I goto Jail for Mortgage Fraud?”
http://iamfacingforeclosure.com/33/will-i-go-to-jail-for-mortgage-fraud/
At this point, I was curious to read his post & poof it was gone. Perhaps he got some legal advice that confessing his “sins” this way was perhaps a poor idea?
September 25th, 2006 21:17
When he goes into foreclosure, doesn’t the banks investigate the loans and paperwork? Won’t they see all the homes are ‘owner occupied’ and do something about it?
If someone like this can get away with stealing over 2 million dollars, then Mel Gibson is right and our country is going down the toilet.
September 25th, 2006 22:25
I’ve heard that, theoretically at least, you can do jail time for mortgage fraud.
Something tells me if the PTB actually decide to get serious about this, they’ll have to move all the petty drug dealers and marijuana smokers out to make room for the mortgage fraud people.
Glad his story made it to Voice of San Diego and Motley Fool. The more people begin to understand that the bubble was pumped by easy credit and lending fraud and NOT fundmentals, the more they’ll understand that the market’s headed for the crapper and the less inclined they’ll be to jump into a falling market.
September 26th, 2006 05:34
Whare are people feeling sorry for this guy. He intentionally “bent/broke” the rules to buy a number of houses by…
1. Stating his income is higher than it is / FRAUD
2. Buying a number of houses at once so that lending companies won’t see all the debt his was taking on / SHADY but INTENT = FRAUD
3. Stating that all the properties purchased were “owner-occupied” when they were not / FRAUD
People like this need to GO TO JAIL. They are commiting FRAUD in search of a quick/easy $$$. Sending people like this and the lender/brokers that enabled this type of fraud to jail is the ONLY way to make it stop.
It amazes me how short-sighted everyone is. Doesn’t anybody remember the Savings and Loan scandal that rocked the housing market 16 years ago?
PUT THIS GUY IN JAIL ALONG WITH EVERYONE THAT ENABLED HIS ACTIVITIES.
Shadash
September 26th, 2006 05:58
I love how he always talks about his honesty. Wasn’t very honest when he claimed that each of the homes would be owner occupied. He wasn’t very honest when he claimed income that he couldn’t prove. He’s just like the death row inmate who finds God when TPTB really get serious about flipping (no pun intended) the switch.
September 26th, 2006 06:00
This jerk should be investigated by his AG’s office and prosecuted if the evidence is there. By following the paper trail, they could also pick up the mortgage brokers, appraisers and anyone else who colluded with him in this fraud. Since his loans are almost certainly securitized and then offloaded, the risk finally belongs to who? Fannie Mae, and then ultimately the taxpayers? i don’t care about his frigging apology, or his sudden “honesty” now that his back is to the wall. If convicted, a serious stretch during hard time in a serious jail for this scuzz and his lending and appraising co-conspirators would be a example of some fairness in the justice system. These white collar criminals are eating us alive. After his jail term, since he’s an immigrant who’s committed fraud, deport the sucker. Let him build a real estate empire in Uzbeckistan.
September 26th, 2006 06:03
> PUT THIS GUY IN JAIL ALONG WITH EVERYONE THAT ENABLED HIS ACTIVITIES.
Someone made already a better suggestions: offer him a plea bargain with probation instead if he testifies against his mortgage brokers who (he said) encouraged him to be dishonest.
September 26th, 2006 07:32
I think the tax payers can get a little of their money back by investigating all the flippers who bought more than 1 property in the last 5 years. I bet a majority of them had “owner occupied” when they sold for a profit.
September 26th, 2006 07:38
He updated his site. Now he needs an attorney! bwahahaha!!!
“Stay tuned…
I just wanted to share my experience. Didn’t mean no harm.
Now I need a good attorney (preferably one that’s internet/blog savvy), QUICK!
Casey Serin”
September 26th, 2006 08:59
offer him a plea bargain with probation instead if he testifies against his mortgage brokers who (he said) encouraged him to be dishonest.
That is a good idea. It should be common practice. Putting the small fish into jail costs money. A lot of money. Let these guys pay with their wallet and from their future income, let us ruin their credit for good, and bring down the lenders instead. Lets not put the individual FB’s into jail, because we would be paying for that, and we don’t want to. This bubble cost us enough already. Only the lenders should be prosecuted. That way we can get some sense into the lending standards quickly and hopefully it will keep that way.
September 26th, 2006 09:26
The problem with the housing market is that “small fish” are the same person/people as the “big fish”. What I mean by this is that the RE agents are often also mortgage brokers.
Here’s something that will make you mad. Did you know that most properties that make it to the MLS have been bought and sold between agents before it’s even listed? At least in San Diego that’s why you never see a home selling for 1/2 the price of all the others.
To get the true deals buyers need to get smart. Start knocking on the doors of houses in the neighborhood you would like to move into looking for people that want to sell. (Realtors do it all the time) Post to Craigslist stating the neighborhood you are looking to buy in and what price you are willing to pay. Chances are someone is out there willing to sell to you if that stupid middleman (RE agent) wasn’t in the way.
September 26th, 2006 10:14
Someone mentioned a “plea deal” for this kid. While that is viable, I still think he should be held accountable in some way. And if that involves some jail time, it is a hard lesson learned.
But I agree that many in the lending industry used shady tactics to encourage this type of behavior. I do not consider that an excuse for Casey’s situation. Just because someone hands you a gun and tells you to run amuck with it, doesn’t mean you should. Nonetheless, just like the all other fiascos of this nature, the Savings & Loan debacle, the dot.com stupidity, the real estate bubble will likely have some legislation passed to tighten lending practices and make accurate information more available to the public.
In my personal opinion, I believe the entire real estate industry is obsolete and that will become more evident as people realize they can easily adverstise and sell their homes privates using the power of the internet. Why fork over 6% to some idiot (a substantial amount when you consider the cost of a house) just because they are a ‘Realtor’. (Not a real word by the wake) And ultimately, are they providing you a service that you cannot easily perform on your own? How hard is it to sell a used car? Why should selling a home be difficult. Post it on craigslist. Set up a few open houses yourself. By a ‘For Sale’ sign from Home Depot for $20 bucks. Ultimately, the only difficulty is the paper work. Which is actually quite easy.
So in closing, if any good can come out of this is that people will realize the ponzi scheme that is real estate and determine they are quite capable of buying and selling homes without the help of some greedy individual more interested in lining his pockets than serving his/her customers.
September 26th, 2006 10:57
In reference to Diomedes comment about 6% real estate fees being way too high…
1. The architect/engineering fees for designing your average tract house usually amount to much less than 6% - and AE fees are based upon the Construction Value only. RE Agent fees are based upon the Construction Value + Land Costs!!! Are RE clowns really adding more value than architects & engineers?
2. In the UK Real Estate fees are 1.25 - 1.5%. This includes the services of a Chartered Surveyor who documents the home and provides measured drawings. In addition RE Agents provide all the marketing services per the US. In Hong Kong the fees are 1% (no measured drawings though). They all seem to make a decent living out of it.
I’ve owned/own property in all 3 markets and worked in the business in NA & Asia. NA has driven the costs of every other brokered transaction down to almost zero - so why has this perverse industry managed to keep paying unskilled people wages that a professional would be (is!!) envious of?
I can’t believe North Americans think a 6% fee for marketing a house is value for money!
September 26th, 2006 11:20
In respect of Casey…
There is no financial recourse for his soon-to-be creditors. Like many others, he’ll be a debtor with no means to make good on his debts.
I’m willing to venture that his ‘born again’ honesty is genuine, though of the ‘there are no athiests in foxholes’ variety. But, as the matter stands, he was patently dishonest with his lenders and appears to be remorseful. People like him are unwittingly larcenous - probably most thought they’d pay back their lenders like good citizens and pocket a nice profit in the process.
If nothing else, this is a chance for society to underscore the importance of personal responsibility. A calculated ‘mistake’ should not carry the same penalty as an honest mistake.
Jail is a bit medieval for financial malfeasance committed by people who aren’t motivated by criminal intent - but a few hundred hours of community service might start making amends for all the trouble caused to the more responsible segments of society.
And it might be timely to make sure we start teaching the next generation some basic financial fundamentals …
September 26th, 2006 11:29
Who are all you bleed hearts that whant to give this guy a “strong scolding” rather then PUTTING HIM IN JAIL? Don’t you see that he IS the reason the price of houses is so high right now? Don’t you see that he IS the reason your property taxes are so high. And finally don’t you see that he WILL BE the reason taxes will go up when the government has to bail out the lenders that will beg and plead congress to have Uncle Sam buy their bad investments so they don’t go broke?
Wake up and get a clue. These people are criminals and deserve to go to JAIL!
September 26th, 2006 12:21
Thanks for the feedback haggis. And well stated.
It is interesting to note how much profit Realtors were landing based on the amount of service they actually provided. And when you examine their inherent ’skill set’ more readily, you realize they are not offerring you any real expertise whatsoever. Many have minimal background in the various nuiances of economics; and for the most part, they are little more than glorified door-to-door salesmen.
To put things in relativistic terms, consider how much a doctor charges for a visit and base that to how much actual schooling they needed to accomplish to provide their service. Yet if you look at real estate, the statistic is skewed to idiotic levels. Here is someone with most likely no post-secondary education and little more than a few night classes to attain their license and now demanding a 6% commission for a property that could be valued in the hundreds of thousands of dollars.
Not to sound too preachy, but if anything is symbolic of the demise of our culture, it is the type of phenomenon representative of Realtors and individuals like Casey. Those that want to get through life the ‘easy way’, through the buying and selling of speculative investment classes without adding anything intrinsic to our society. What does that say about our future when the day traders and condo flippers are the sought after professions while jobs in the medical, engineering, teaching, etc. fields receive little or no praise. I can only hope that this real estate bust produces a new class of individuals, like those who had to experience the rigors of the Great Depression, who understand the value of a dollar and what it takes to earn one.
September 26th, 2006 14:42
Maybe Casey should become a Realtor!
September 26th, 2006 15:03
Why on earth would it be good for this kid to go to jail. He needs to go to work to pay for those loans by bankruptcy. He won’t be able to get out from under the loans as they were obtained with shall we say less than candor disclosure. His punishment will come due every month for a very long time.
Those who should be afraid are those in the loan pipe whose name comes up repeatedly on misstated stated income loans that go bad. As a “professional” they are expected to be knowledgeable and to execute their agency with diligence. A few bad loans is normal error, a lot are overt action. A parade of “owners” stating the same broker advised them to over state their income will not look good in court. It will also show intent and profit. Now you have a fraudster Ma and Pa juror will be eager and willing to forcibly relocate to a open plan, very secure state condo.
September 26th, 2006 15:29
I’m going to venture a little guess here that Casey is the victim of some very bad people who used him as a strawman for a mortgage fraud scheme. It would be very interesting to check out the sellers on all his properties. Somebody made a ton of money selling Casey these houses, and I’m guessing that money is already parked far far offshore. I mean, doesn’t the fact that he bought all those houses so quickly in a matter of weeks strike anyone as odd?
He probably pulled down his blog because one of his “partners” probably got a little miffed. But too late, I fear. I’m guessing some regulator at a state or Federal agency is pulling all of his financial records as we speak. If I were Casey, I’d be checking for funny-looking wires under my car seat for the next few months.
[Gosh, it all sounds so melodramatic. Have I seen too many seasons of the Sopranos? I mean, mortgage fraud is a huge business and one avidly pursued by organized crime. Is my theory really that whack?]
September 26th, 2006 17:10
Oh, I don’t think there is anything diabolical. Just brokers who thought the rules didn’t matter anymore. I just was reading The Housing Bubble Blog when I read this:
“One broker, ‘Dennis,’ works for a mortgage company where he says a whopping 85 percent of loans are stated income. He says out of that 85 percent, they all have inflated numbers. ‘All of them, because that’s why you’re going stated.’ Dennis added.”
Not even smart enough to know they were/are running a criminal enterprise.
September 26th, 2006 17:45
Viovov (post 22)
The reason why many of these ‘investors’ bought the properties at the ’same’ time is because it is much harder for the underwriters to track. It takes time for the process to work and for the property to show up in your name.
I caught it several times…people that were buying 2 properties at ONE time with 2 different brokers/lenders. The borrower ‘knows’ they won’t get the 2nd house approved because the ‘liability’ of the other mortgage payment will kill their DTI or make it so that they would have to state a COMPLETELY ridiculous amount of money.
By buying properties at the same time, it makes it much harder for the lenders to catch. That is also how they can pull the ‘owner occupancy trick’ on several properties at the same time. The lender doesn’t ’see’ the other properties, so it makes more sense that if somebody is buying their first and only house, that it will be there primary residence.
I hope this helps to clarify.
SoCalMtgGuy
September 26th, 2006 21:09
What would this 24 year old “MAN” be saying if he had made a ton of money? Dance’s at the strip club, a new boat, new Hummer, new Rolex, and to brag to all his buddies about how much smarter he is than everyone else to make so much flow. He should go to jail and then have his wages garnished until the debt is paid. He committed financial fraud for over 2 MILLION DOLLARS and should get off with the equivalent a slap on the wrist as a “learning experience”? No way! This isn’t a kid stealing a piece of candy from the store. Many could have gone out and done the same thing but they knew it was illegal. He is a thief and a criminal and he took his chance. There are bigger fish to fry but this one is in the boat.
September 27th, 2006 01:16
Crashwatcher & Shadash,
He won’t go to jail for debt - he’ll just declare bankruptcy. That much of the story is above board and legal. And, if we start chucking people in jail for overstated income & multiple ‘primary’ residences I strongly suspect the jails will fill up all to quickly. Perhaps the stocks need to be pulled out of storage and given a good airing in the public square!
SoCalMtgGuy,
I’m surprised there’s no computerized central registry? It would seem that loans of hundreds of thousands of dollars would warrent some real time - online credit checking mechanism. Though, I suppose that would defeat the the purpose of stated income loans.
What a truly strange industry. I suppose thats a result of having a commissioned person processing paper that someone else is holding the bag for. I suspect in 6 months there will be a lot of angry pensions funds (and no doubt, Chinese & Japanese investors).
This whole thing is like a dog turd on your shoe that you’ve just tracked through the wall-to-wall carpeting in your new house.
September 27th, 2006 06:57
haggis…
There are many tools out there…but IF the loan hasn’t closed, and the property is NOT in the persons name yet, how can a data base check that?
That is why they do it simultaneously.
There are only small signs that a person might be doing such a thing. I am not going to post the things a borrower can do to make it harder to catch. You would be surprised at how ‘dumb’ some people can be, and how surprised they act when you ‘catch’ them trying to do such a thing.
I don’t think it was much of an issue until the past few years when people wanted to ‘leverage’ as much as possible to make even more ‘easy money’.
SoCalMtgGuy
September 27th, 2006 09:15
SoCalMtgGuy,
Sounds like the basis of the problem is that no one perceived their actions as having criminal intent - or to put it otherwise, most stated loan borrowers viewed their actions as nothing more than a ‘white lie’. And as you’ve describe it, it seems impossible to verify things ‘on the fly’.
Which leads to a big ouch! And a bigger ouch when the tab for tottering financial institutions is picked up by the taxpayer.
From your description the system is in disarray. It should have precluded people like Casey from borrowing that much but evidently it didn’t. I know that some will argue that that’s just capitalism at work, and you should own up to your mistakes. But loansharking is capitalism too, and that’s illegal. And giving a 24 year old access to ’stated income’ money is like giving them a Ferrari and bottle of scotch.
In the absence of moral hazard, the old rules of 20% down and verified income seem like they provided a good hurdle to fraud. It’s too bad those standards have been mothballed. I’m getting teary eyed thinking about the ruthless grilling the mortgage loan officer gave me some 20 years ago.
We’ll all be picking up the tab for this mess.
Cheers.
PS - And BTW, the mortgage officer of 20 years ago was right…
September 27th, 2006 14:20
> He won’t go to jail for debt - he’ll just declare bankruptcy. That much of the story is above board and legal.
declaring bankruptcy = filing for bankruptcy PROTECTION from creditors
having applied for loans fraudulently => bankruptcy protection denied
I don’t want to see him in jail (which is also expensive to us, as someone already pointed out). I want him to see working for paying back his debts over 10-20 years, following a court-ordered payment plan, with this plan written into his credit report. Some hours of community service might fit in, too, as suggested.
> And, if we start chucking people in jail for overstated income & multiple ‘primary’ residences I strongly suspect the jails will fill up all to quickly.
Not jail, but paying off their loans without ability to discharge them through bankruptcy protection. Bankruptcy protection should be a privilege of the unlucky, and maybe stupid, but honest debtor. Fraud because of greed should be rewarded with a lower standard of living for a long time.
September 27th, 2006 15:21
His site is back up! (Complete with my suggestion that he move to Novosibirsk in the comments…)
September 28th, 2006 12:45
I am in agreement with Peter.
Part of the issue with the manner in which these loans are handled is that people are too nonchalant when acquiring them. They are just under the comfortable notion that they will not be held accountable if they decide to default on their loans. Just file for bankruptcy and walk about with a poor credit rating.
How much more responsible would we be as a society if there were recriminations on loans and that we needed to work off all our debt. I bet that would produce some nice stabilization in both the credit card and mortgage industries.
Incidentally, although I am not a conspiracy theorist, but does anyone not find it VERY coincidental that the bankruptcy laws were changed last year? Certainly appears as though our government had an idea of what was coming and starting taking proactive measures to protect the banking system at the expense of people like Casey and his kind.
September 29th, 2006 06:51
At least Casey admitted his fault. THe enablers should be deep fried in peanut oil and fed to the fish. But this kid should be ‘working’ a LONG time to pay back some of the debt. And it should hurt really bad.
October 2nd, 2006 15:15
Check out how the lending standards changed on FRIDAY!!!
This will definitely help the bubble POP!
http://www.federalreserve.gov/boarddocs/press/bcreg/2006/20060929/attachment1.pdf
:-)
I can’t wait ’til all the homes in escrow TODAY will fall out of escrow this month!!!
hhahahha
January 4th, 2007 02:31
Array
May 13th, 2007 05:08
RE: Casey Serin:
Some similarly business-minded folks from the old country also run into tough times, due to their own innovative ideas for creating wealth, just like Casey:
Uzbekistani immigrants await discussion of entrepreneurial methods