Mortgage fraud arrests? The news says hundreds swept up in mortgage fraud. Hundreds? Wow.. amazing but a little late, huh? Well in a difficult economy it looks like the lawyers will have plenty of business.
While it looks like the Feds are finally announcing results of their investigations, it’s not just the mortgage brokers who are being looked at. Hedge funds are also now prime targets for investigation as to their role in the subprime mess. And two former Bear Stearns executives were arrested this morning. Seems at least one of these gentlemen may have been secretly withdrawing his own money from a failing hedge fund while smiling to other investors about how well they were doing.
After touring southern California last week it was amazing to see how prices have come down. Builders are still building, but are also scrambling to close deals on various houses and subdivisions. I even saw one sign: “Any Offer Accepted.” They probably left out the word reasonable.
I talked with several people who were seeing 40% reductions in the valuations of their homes. They sighed acknowledging that in addition to supply and demand, it was primarily an income qualification issue for how much of a home people can really afford. Reality was coming home to roost.
But during the hey day of the real estate boom, it wasn’t just the mortgage brokers leaning towards fraud. Many speculators and home buyers fudged their applications with exotic loans just to buy a property. Of course the speculation and application fraud is mostly history as more stringent mortgage qualification standards are now in place. But amazingly enough, mortgage fraud is still a problem across the nation.
I wonder if there’s any fraud in the oil or refining industry? Well maybe fraud is a bit strong of a word, but how about rampant oil industry speculation?
“As business and consumers consider the implications for them of crude oil selling at US$130-plus per barrel, they should bear in mind that, at a conservative calculation, at least 60% of that price comes from unregulated futures speculation by hedge funds, banks and financial groups using the London ICE Futures and New York Nymex futures exchanges and uncontrolled inter-bank or over-the-counter trading to avoid scrutiny.”
We’ve been through the dot.com boom and the real estate boom. If this is the oil and gas boom, does that mean prices will come down later too? More importantly, what’s the next boom? I’d like to get in on that one…
Sphere: Related ContentNo comment - Post a comment
« Alternative Everything is the Future | The Not So Cheap Matinee »
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_2.gif)
