I am hoping that in a year or two John and I will “upgrade” into a house. We are waiting for
- his new job in this neck of the woods and what the commute will be
- The market to go down just a tad
- Find a house that is larger than the condo (which is pretty darn big actually)
I think we will see more foreclosures in the future because many peeps ARMs are re-adjusting and unlike the past few years banks are not so readily handing out loans. I ran across this blog today: http://iamfacingforeclosure.com.
Casey, a 24 year old web developer from Sacramento, started investing full-time in January of this year. He went to real estate seminars, quit his job and became a full-time real estate investor. In the last 8 months he bought 7 houses in 4 different states, mostly with the help of 100% LTV stated income loans. With no income he was able to borrow 2.2 million dollars. He attempted to flip the houses: buying them, fixing them up and then selling them at a profit. He seemed to have problems with contractors, and other mundane issues with fixing a house and then selling the houses quickly and then at a loss as the market cooled.
His house of cards crumbled down when he wasn’t able to get a buy/cash-out-at-loan out at his last loan. Why? A few days before the close the bank denied the loan. The bank had Googled him.They found one of his early blogs that talked about flipping houses. The mian thing Case did that was illegal ( not to mention stupid) is saying he was living in these places when he was just going to flip them. Owner occupied loans get better rates, which is why he was telling the banks this.
So now he has a blog where he talks about his troubles, acknowledges the mistakes he made and hopes the pr from this blog will help in selling the houses before its too late. It might be working, he has sold one already.
Okay this guy was stupid, but he is not the only one. He has about $140,000 of debt in credit cards and business lines. The minimum payments on credit lines are over $3500 per month. However he is not the only one, how many more times will we hear about foreclosures. And its amazing that a unemployed 24 year old could get that much financing. What type of economy do we have where a very young “businessman” can get access to millions of dollars when he lacks the skills, vision and financial soundness of mind to execute good business decisions?
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God bless the free market economy! :p
I just posted an update with details on what exactly I did that may be considered “SHADY”:
Will I Go To Jail For Mortgage Fraud?
After I get feedback on this post and talk to some attorneys I will hopefully know if jail time is a realistic expectation.
I honestly didn’t think the stuff I did was THAT bad. Especially since all the people helping me do it (gurus, wholesalers, investors, mortgage brokers) didn’t seem to think there is much to worry about.
I think taking the blog down is a little too late. I might as well keep going.
My Plan:
1) come clean [done]
2) figure out what I did that was so illegal and HOW illegal is it?
3) appologize
4) EXPOSE shady industry practices
in the process
5) become an example for others facing foreclosure who may have done SHADY loans
I think that would be a good use of free speech and personal journalistm.
Yes I will have to take whatever consequences that come.
Wow. I am impressed. I do think this is, however, a two-way street: Even though no one said “stop”—and perhaps even encouraged some suspect things, there also needs to be a personal ethical, moral, and legal check (which I think I see going on right now). Unfortunately that is not something you will get from businesspeople. In fact, you may have missed it, but graduate students in business school are mosre likley to cheat to get their degress than anyone else (nearly 60% admitted to plagiarizing a paper or cheating on an exam). Their No. 1 excuse? That it was an accepted practice and that, as that is what they would need to do to get ahead in their chosen profession, it was therefore acceptable.
Sigh.
I agree. Casey’s blog, before he shut it down, was full of pretty harsh comments and foretelling of his future in debtors prison from the peanut gallery.
Like you said Tim, it was a 2 way street and the loan business practiced in the past 5 years have been Way to Lax. I hope he takes care of his financial and legal problems. Jail (as some have predicted) seems harsh, a waste of time and taxpayers money.
Because if he goes, why not have all the mortage brokers who told him “where to sign on the dotted line” and then picked up their commission check accompany him?
I am going to have to close the comments, too many darn spammers.