A lot of people ought to facing prison for this
Wow.
Once again the “nobody saw this coming” meme gets exposed as, well, a fraud. This is from an investigative series by the Sarasota Herald-Tribune. And pay attention to some of the numbers involved, to the scale of this thing, just in this one local area:
The Herald-Tribune investigation found that mortgage fraud ran rampant all over Florida. The newspaper looked for just one kind of fraud — illegal property flipping — and found $10 billion in suspicious deals this decade.
Lawmakers passed a law in 2007 making mortgage fraud a crime in Florida for the first time, and state officials created mortgage task forces and opened a hot line to gather complaints.
But even now, two years into a recession brought on by real estate speculation and fraud, state and local law enforcement is doing almost nothing to prosecute past fraud or prevent future fraud….
In November 2005, when the real estate market in Florida had just begun to slow, the state’s top law enforcement agency issued a warning that mortgage fraud was about to wreak financial havoc.
In sober language, a 36-page Florida Department of Law Enforcement report explained that banks would collapse and losses would be counted in “hundreds of billions of dollars.”
The level of fraud would rival the Enron case and the Savings and Loan collapse of the 1980s, the intelligence report warned.
The report, which was not released to the public but was sent to prosecutors and law enforcement officials across the state, laid out a series of responses to help prevent or lessen the disaster.
But instead of heeding the warning, most law enforcement officials — including Earl Moreland, the elected state attorney for Sarasota and Manatee counties, and Bill Balkwill, Sarasota County’s sheriff at the time — did nothing.
…. the amount of fraud dwarfs the number of cases being pursued, the Herald-Tribune found. The Herald-Tribune analyzed nearly 19 million property transactions looking for one type of housing fraud — illegal property flipping. The newspaper found more than 50,000 transactions in which prices increased so much, so quickly, that fraud experts interviewed by the newspaper deemed them highly suspicious.
These were the mortgages that Wall Street bought up and securitized, selling to banks and investors all over the world. These were the bonds the credit rating services said were AAA investments.
And the walls came a-tumblin’ down.
Tell us what you think about the site
Customer Care »
Vacation stops, manage subscriptions and more
AJC Services
Sections
Other Editions
Guides
Visitor Agreement | Privacy Statement
© 2011 The Atlanta Journal-Constitution
131 comments Add your comment
Normal
July 22nd, 2009
12:03 pm
I’m not sure how the Righties will blame this on Obama, but they will…
Turd Ferguson
July 22nd, 2009
12:03 pm
Cha-Ching!!
Finn McCool
July 22nd, 2009
12:04 pm
How does the house flipping work exactly?
Turd Ferguson
July 22nd, 2009
12:05 pm
Yet again the ole dutch tulip bulb scandel.
getalife
July 22nd, 2009
12:05 pm
Nice scam Obama…….
Just blamin.
Turd Ferguson
July 22nd, 2009
12:07 pm
One way it works is buy an old junker, fix it up in say 3 weeks and sell it. However I believe this article must refer to something other.
david wayne osedach
July 22nd, 2009
12:07 pm
This is the perfect scam1 There are no (legal) come backs!
Normal
July 22nd, 2009
12:12 pm
Finn, first you need a really big spatula…
Normal
July 22nd, 2009
12:13 pm
getalife…Good one…
Turd Ferguson
July 22nd, 2009
12:15 pm
Do we have laws against outhouse flipping?
People who live in out-houses, shouldnt.
I Report :-) You Whine :-(
July 22nd, 2009
12:18 pm
Making the free market illegal, welcome to socialism.
Seig Heil, bookman!
Yes we can!
Doggone/GA
July 22nd, 2009
12:21 pm
“However I believe this article must refer to something other”
Illegal house flipping: http://www.fbi.gov/page2/dec05/operationquickflip121405.htm
RW-(the original)
July 22nd, 2009
12:23 pm
If the report was sent to law enforcement in 2005 but this wasn’t illegal until 2007 what were they supposed to do?
Bosch
July 22nd, 2009
12:26 pm
Normal,
Big spatula. Good one.
Yeap, Jay knows it’s time to switch topics when Paul and I (and anyone who’ll join us) start in with the TV shows and food. Speaking of food…..I’m hungry.
getalife
July 22nd, 2009
12:26 pm
Thune gun bill failed. I’ll pack anyway.
Flake’s investigation for PMA lobbying group was killed by the dems. Murtha is smiling.
They are going to have a torture relief act vote. Amazing.
Kamchak
July 22nd, 2009
12:27 pm
“The newspaper found more than 50,000 transactions in which prices increased so much, so quickly that fraud experts interviewed by the newspaper deemed them highly suspicious.”
Does the state of Florida and the municipalities involved take in revenues from these fraudulent sales? Did these sales trigger reappraisals on surrounding homes? Does Florida raise revenue from property taxes based on appraised value? If the answer is yes to any of these questions, it is no wonder that officials turned a blind eye.
Paul
July 22nd, 2009
12:27 pm
Anyone care to make the case we don’t need more laws and more oversight and regulation?
This stuff makes me sick.
Once more: if there isn’t a law to prevent it (and sometimes even if there is) people will do it.
USinUK
July 22nd, 2009
12:28 pm
TF –
the dutch tulip was a bubble, but not a scandal.
however, the south sea was both a bubble AND a scandal, due to the dubious behavior of the king and his ministers …
TnGelding
July 22nd, 2009
12:28 pm
But will they?
Verifies what I’ve been writing for months.
Bosch
July 22nd, 2009
12:29 pm
Paul,
“Anyone care to make the case we don’t need more laws and more oversight and regulation?”
You socialist hippy.
Paul
July 22nd, 2009
12:30 pm
Bosch 12:26
Cosmic consciousness!! I’d just put some rice in the cooker to go along with the leftover Peccadillo. Then I came back in and thought “Jay’s gonna get a new thread up…”
USinUK
July 22nd, 2009
12:32 pm
hey, ya big whiner …
your question was ansered more than 3 times downstairs … do you need reading comprehension classes???
Doggone/GA
July 22nd, 2009
12:33 pm
“Once more: if there isn’t a law to prevent it (and sometimes even if there is) people will do it.”
No law is EVER going to stop everyone from committing a crime. If they did, surely after how many thousands of years, we’d be crime free now.
“Anyone care to make the case we don’t need more laws and more oversight and regulation?”
I will. How about: we enforce the laws we already have.
Curious Observer
July 22nd, 2009
12:40 pm
If Florida wasn’t aware of fraud, it wasn’t looking terribly hard. When 300 condos in a new 15-floor beachfront building in Miami are all bought up by 20 individuals before construction is even completed, you have to be hog-stupid not to suspect there’s some potential for flipping going on. For a while, condo developers couldn’t build them fast enough. Most people never bought directly from the developer; they always bought from the flipper, who would pay $350,000 for a small condo and sell three months later for $450,000. It was simply the way business was done.
I was in Miami Beach a few weeks ago. The huge, multi-story condo buildings that remain uncompleted serve as grim testimony to the fraud that occurred and to a government that saw benefit in looking the other way.
Paul
July 22nd, 2009
12:41 pm
Doggone/GA
My point was, people do things beyond the pale, society, through their representatives, enacts laws to prevent recurrence.
As RW-(the original) pointed out, prior to the law being enacted, the actions were not illegal; therefore, there were no laws to enforce or statutes whereby people could be prosecuted.
AmVet
July 22nd, 2009
12:41 pm
And that King of Frauds aka the Wyoming Wuss looked in the camera and said, “Don’t blame Bush. Nobody saw this coming.”
Truly a professional liar that must make some here green with envy.
For the life of me, I still don’t understand why those two are not in an 8 x 12. Along with a whole boatload of their white collar criminal friends.
What we need is less regulation. The “free market” can police itself just fine. It’s not like the foxes are going to do anything untoward with the hen house are they?
And what the hell?!
I go out for a couple of hours to help out the little ladies at Congregation Beth Shalom and you evil liberals have run off Wyld Bull?
Forsooth!
He did wax eloquent in that Cult of Victimality cut & run capitulation though.
I dare say it was damned sight better than the one given by Sarah BarraClueless.
Now if only you lazy socialists and America haters would do something about Bud…
jconservative
July 22nd, 2009
12:42 pm
One law – any institution that grants a mortgage must hold that mortgage for 7 years before selling. That should solve any problem from the lending end.
Not my idea – Republican proposal from late 1960’s.
Brad Steel
July 22nd, 2009
12:43 pm
Florida would be a great place for an open casting call for “America’s Most Wanted” and now for CNBC’s “Scam.”
No wonder OJ Simpson and the Madoff family have homes there.
USinUK
July 22nd, 2009
12:43 pm
“Thune gun bill failed. I’ll pack anyway.”
getalife … I just don’t understand how the same party that supposedly reveres states’ rights want to override them with a law that says “your gun laws don’t matter if your neighbor’s is more lenient” … talk about not walking the walk
Halibut Maoir
July 22nd, 2009
12:44 pm
Doggone-DING-DING!!!! You are CORRECT Sir. Well Done!
Bosch
July 22nd, 2009
12:45 pm
I guess this kind of blows a hole in the theory that the housing market collapse was because of all them poor folks.
Halibut Maoir
July 22nd, 2009
12:46 pm
Enforce the Laws that are already on the books,such a simple but correct solution to many of our woe’s.
AmVet
July 22nd, 2009
12:46 pm
“As RW-(the original) pointed out, prior to the law being enacted, the actions were not illegal; therefore, there were no laws to enforce or statutes whereby people could be prosecuted.”
Great! Let’s see if I have this straight.
You get 10,00 lobbyists to descend on Washington and have them pressure and pay off politicians so they don’t pass the laws making these obvious crimes illegal like they should have fifty years ago.
Yeah that should work…
Bosch
July 22nd, 2009
12:47 pm
Sorry AmVet, we didn’t mean to run off Byll.
Don’t lie about helping church ladies, we all know you were out celebrating the death of soldiers with your wicked evil ways.
USinUK
July 22nd, 2009
12:48 pm
jconservative –
7 years??? society is too mobile … I’d be happy with 2 years … or, at least, a stiff tax penalty if we opt out of a minimum
Doggone/GA
July 22nd, 2009
12:48 pm
“always bought from the flipper, who would pay $350,000 for a small condo and sell three months later for $450,000.”
But that isn’t necessarily fraud. There has to have been something more than just a rise in price. If the developer wants a quick profit and sells at a lower margin to get it, and the market increases and the “flipper” can get a better price than was paid…well, as you said, that’s how it’s done.
Fraudulant flipping is done based on things like inflated appraisals, or inflated upgrade costs…stuff like that.
Doggone/GA
July 22nd, 2009
12:50 pm
“As RW-(the original) pointed out, prior to the law being enacted, the actions were not illegal; therefore, there were no laws to enforce or statutes whereby people could be prosecuted”
Not necessarily. It depends on the circumstances. There are already laws against fraud, if those laws were broken then what they did was illegal. We don’t need laws that list each and every tiny detail of a fraud for that fraud to BE illegal.
USinUK
July 22nd, 2009
12:50 pm
Bosch –
“I guess this kind of blows a hole in the theory that the housing market collapse was because of all them poor folks.”
and just who do you think was BUYING all those Miami condos??? hmmm??? it was the undeserving, sub-prime-borrowing POOR, that’s who … why they each had a string of 8 or 9 houses to their names …
Bosch
July 22nd, 2009
12:51 pm
Soooo……those hideous water towers booming that “Gwinnett is Great” and “Success Lives Here” are coming down. I’ve always thought that false advertising, so glad to see those eyesores and pillars of lies come down!
USinUK
July 22nd, 2009
12:51 pm
Bosch –
“we all know you were out celebrating the death of soldiers with your wicked evil ways”
right after our abortion parties and big gay marriages … we’re libruls, that’s how we roll …
I Report :-) You Whine :-(
July 22nd, 2009
12:52 pm
“Where does the federal government get this “aid” money in the first place?”
Certainly not from Alaskans.
what part of “net RECIPIENT of federal money” do you not understand … ???
Andy, AK residents stopped being net revenue contributors 20 years ago, looks like.
Still waiting on an answer.
Bosch
July 22nd, 2009
12:53 pm
USinUK@12:50 –
Of course!
It’s all the poor folks fault! No, wait…….
Curious Observer
July 22nd, 2009
12:53 pm
Doggone@12:48: Of course there were inflated appraisals, skimpy due process by the lending institutions, etc. Often, the developer would arrange for such things before even beginning to build. How else would a few individuals be able to buy up so many condos?
Bosch
July 22nd, 2009
12:55 pm
USinUK,
Roll? Shhhhh….don’t mention the rollin’ — K?
DB, Gwinnettian
July 22nd, 2009
12:55 pm
If I were Benevolent Dictator of the Universe, Calculated Risk would be everyone’s default homepage.
And now to have a look at what Jay’s actually posted…
AmVet
July 22nd, 2009
12:56 pm
“…right after our abortion parties and big gay marriages … we’re libruls, that’s how we roll …”
Bosch and USinUK, I was gonna add a real doozy along these lines but thought better of it.
(And John Ashcroft, wherever you are, f___ you!)
Turd Ferguson
July 22nd, 2009
12:56 pm
One never hears of flipping mobile homes unless there was a tornado afoot. I guess for once the mobile home owning public are safe.
“Aw hell, I gotta double wide. Sherun pop the top on another cold PBR!”
Doggone/GA
July 22nd, 2009
12:57 pm
“How else would a few individuals be able to buy up so many condos?”
It’s called “investing”…there’s no laws against legitimate investments. There really ARE people out there who have a lot of money to invest, didn’t you know that? Try looking at what actors do with their money.
USinUK
July 22nd, 2009
12:58 pm
Whiner –
“Still waiting on an answer.”
then you have some serious reading problems for which you should seek help.
USinUK
July 22nd, 2009
12:59 pm
Doggone –
““How else would a few individuals be able to buy up so many condos?””
don’t forget, there are also investment groups where individuals pool their money -