Sarasota Herald-Tribune Reveals Results Of Their Epic One Year Investigation Into Housing Bubble Fraud – Part 1

In an gutsy expose of the white collar fraud committed during the Housing Bubble, the Sarasota Herald-Tribune is currently in the midst of a multi-part series of articles concerning property flipping in Sarasota and Manatee Counties on Florida's Gulf Coast.

The first article in the series sketches a sordid two county scene where many a white collar criminal . . . still uninvestigated and walking the streets as free men and women . . . colluded to manipulate property prices so as to land huge commissions, steal money from banks who were not aware they were set up on the sale, and rake in huge capital gains on properties which sometimes rose 100% in just one day.

To perpetuate the crimes, the Herald-Tribune says (after a one-year investigation) that the 37 "flipping rings" they've identified used insider buyers, sellers, Realtors, loan brokers, appraisers and title insurers. The newspaper says over 40% of these flipping rings were "Real Estate" insider run. In the most egregious acts of fraudulent flipping, it was usually rings led or "salted" by industry insiders . . . such as rings led by one of the Top 50 ReMax Realtors in the world, to the same ring who had an esteemed mortgage lender on board and who recently won a prestigious award from the Mortgage Bankers of America, to the same ring using one title insurer over and over and who looked the other way on many a fraudulent loan and who is still a member of a Real Estate board which is an overseer of Real Estate practices.

If you do nothing else this week, begin to read this investigative journalistic tour de force today, and I'll bring you the updates daily as it progresses. (As it is now, I am 3 days behind the actual launch of each piece in this series. I want to have time to assimilate them in my brain before commenting.)

The first piece in the series is simply titled, "'Flip that house' fraud cost billions", and it opens this way:

Fraudulent property flipping ran rampant during this decade's housing boom, with $10 billion in suspicious deals inFlorida alone, a Herald-Tribune investigation has found.

The deals -- many of them inflated sales among friends, family and business associates -- drove up property values and tax bills during the boom, fed bank bailouts and failures after the boom, and fueled the foreclosure wave that has gutted property values.

Unscrupulous property flippers would buy houses or condos, then drive up the price in a few days or weeks by selling it to someone they knew. Buyers used the inflated price to get bank loans for more than the property was worth, leaving money for flippers to split as profit.

Those are just the first three paragraphs. And after being introduced to a figure of $10 Billion in "suspicious deals" in Florida alone, and the idea that the newspaper had uncovered massive fraud in just its two county reach, we read the following:

Despite their role in one of Florida's largest white-collar crime sprees, the vast majority of unscrupulous real estate flippers will never be prosecuted. Most Florida law enforcement agencies have done little to investigate property flip fraud. The FBI has been left to chase far more cases than it can handle.

But evidence of illegal deals is available in the public records filed when a property changes hands.

The Herald-Tribune spent a year gathering and reviewing nearly 19 million Florida real estate transactions for red flags that can help identify flipping fraud. Using public records, including land deeds and mortgage filings, it found that:

I'm not going to divulge any more of the article (which can be read here . . . click this and read link which also contains maps and graphs), but I will tell you this: Realtors and everyone associated with the FIRE Economy are the Frankenstein monsters which the lower and middle classes are about to lash out with pitchforks and rifles.

Nothing in my lifetime has had such a national stench of open air fraud as the Housing Bubble and concurrent Housing Crash. How anyone floating a Realtor's trademark symbol by their names expects respect from future homebuyers is beyond me. I think I speak for 99% of blue collar workers I know: I don't trust anyone in the Realty profession as far as I can toss them. And let me say, I can toss a Realtor probably farther than the average man (might make for a great Bar Wars event, "Toss a Realtor"), but I still can count the Realtors from Key West on one hand with a finger and thumb left over who I would entrust my money and time to.

For everybody who thinks I've been to hard on the Realtors, Appraisers, Insurers, Brokers, Bankers, etc., who were all sucking on the FIRE Economy's teat during the Housing Bubble with no thoughts whatsoever to the damage they were doing, I say this: let the blame fall where it is deserved.

Read this series. Learn. Educate yourself. And don't trust anyone who talks like a Realtor circa 2005. And especially don't listen to the whiners of the FIRE Economy who destroyed Capitalism as we once knew it.

The damage done in the name of Mammon clothed in a Gold Century 21 Jacket and Goldman Slacks will be felt for decades to come in this Country. Our children's children's children will be paying the cost of the insider sociopaths who committed fraud at all levels during and after the Housing Bubble. I'd love to see hard time prisons fill up with these white collar fraudsters. None of them deserve to still be walking the streets.

May the FBI have a hiring frenzy so we can put more of these sick white collar criminals behind bars where they belong.

Caveat Emptor,

Rock Trueblood