Perhaps justice will be served on some of those who have contributed to the current housing and economic crisis. The article discusses the activities of two businessmen who acted as "straw buyers", allowing their name and fico score to be used to purchase properties. Usually these properties are rented out, but the rent "paid" is pocketed rather than paid to the mortgage company. The homes are then either allowed to go into foreclosure (unbeknown to the renters) or resold using inflated appraisals to turn a tidy profit.
The straw men get kickbacks for the use of their name and score, but are not usually directly involved with the rest of the scam. In this case they also inappropriately utilized money to "pay" for false fees involved in the buying process.
"The trio is accused of one count of conspiracy as well as multiple counts of mail fraud, wire fraud and money laundering."
The primary vicitms in this case were lenders and builders....oddly enough the renters who were fooled were not included in the list.
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I wonder what happens in a person's mind to make it okay for them to do these sorts of things. Are they so egocentric that they don't see the impact of their actions on the lives of others? Or do they just not care? Can they sleep at night knowing that families are now out on the street? I try, but I just can't wrap my head around it. What are they thinking?
ReplyDeleteUnfortunately, I know people involved in these kinds of activities and have been approached to participate in other "innovative" ways of making money. The master mind usually promotes these schemes in such a way that many of those involved have no idea they are doing anything harmful or wrong. It's a sad sad thing....
ReplyDeleteIn this case at least there appears to be knowledge of the activities on all counts. The article notes they were using a business fund to "pay" for "expenses" the lender thought were valid when in fact they were being generated by the "buyer" and then paid out via the business when no services had actually been used, hence the money laundering.
ReplyDeleteThere will always be someone will to help fools and their money part. I am sure I will have my fair share of offers over my lifetime.
Lucas,
ReplyDeleteThanks for your comments on my blog; your point about Fannie and Freddie being a secondary market in theory is a good one, and that it was just the implementation of it that was flawed.
What a scheme! What if these "creative" people put their time and energy into a legitimate market activity?
I'm with Paul on this one. It starts when someone decides that working 9-5, five days a week is not "for them." They are 'smarter' than the rest and are sure they know ways to make easy money. It's best [in their minds] not to think about victims. We all know the rest...in the immortal words of the 1970s Dallas TV show star, J.R. Ewing, "once you give up your integrity, the rest is easy."
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