Fraud Ethics Test

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IrvineRenter_IHB

IrvineRenter_IHB

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<a href="http://bubbletracking.blogspot.com/2007/04/roman-realty-realtors-helping-realtors.html" set="yes">Roman Realty: Realtors Helping Realtors</a>

OC Renter just put up a great post about a realtor in San Diego who routinely gets houses to sell for above comps and asking price even in their imploding market. It seems pretty clear she is running a fraud machine and making a bundle doing it.





So my question is:





If you were a desperate homedebtor facing foreclosure and bankruptcy, and you knew this realtor was going around bailing out people like yourself with fraudulent transactions, would you have her come bail you out knowing she was going to commit fraud to do it.





Would you sell your soul? Let the rationalizations begin...
 
<p>Wow! How does she do it? </p>

<p>I wouldn't sell my soul, but certainly sell my house through her if I was facing foreclosure and bankruptcy. As long as the fraud is committed by her, not me. </p>

<p>It's a no brainer.</p>
 
finally buyin,





To knowingly be a party to fraud is to commit fraud. It could be prosecuted as a conspiracy. You would have to show up in court and lie and say you knew nothing about it.





Your soul again...
 
<p>The more appropriate question would have to be: "If you were facing financial ruin and bankruptcy, would you participate in fraud to bail yourself out IF YOU KNEW THAT YOU WOULD GET AWAY WITH IT". That would reduce it to a pure exercise in ethics. </p>

<p>I would realistically have to say "Yes".... and I would speak volumes about how it was justified, since my fraud is simply getting back at the corrupt financial machine of subprime loan providers. I would then take a VERY long shower and spend ten years doing community service. Anything short of that would be a lie.</p>

<p>Luckily I saw the bubble early for what it was and avoided it... so I don't actually have to answer the question. I would guess that most people, when facing this kind of financial disaster that will take them 10 - 15 years to crawl out from under will do ANYTHING to avoid it. As a matter of fact, I don't think anyone can truly guess what they would do until they find themselves in desperate straits..... certainly not the sideliners watching the show.</p>

<p>I have a question: Does anyone have any information on this Realtor? I looked everywhere for Roman Realty and I could only find the one in Chicago. I just wanted to see if this Realtor was for real.</p>

<p>Question 2: Where the hell is the FBI when you need them? Don't they read the blogs? One prosecutor that I read put it best "I take down the fliers for the fraudulent offers as I see them on the street. I figure, one less fraudulent deal means one less person I have to convict and throw in jail... and that is just fine with me."</p>

<p> </p>
 
<p>I agree with NickStone - its hard to say what I would do if I was on the brink of financial disaster. I avoided buying during this entire bubble so it is easy for me to say that I wouldn't have super realtor rescue me but I really do wonder how low I would go if my family and financial future depended on it. </p>

<p>Also, I believe the lenders are just as much involved in the fraud as super realtor and straw buyer are. Isn't it fraud to knowingly sell Wall Street crappy loans? The lenders have pretty much asked anyone who can sign their name to borrow money from them as they knew they could turn around and sell it to Wall Street. (well at least until recently) </p>
 
NickStone,





I would do it. I would probably cut the the rationalizations and just admit to myself that it is wrong and I did it anyway, but I would probably still do it. The long-term ramifications for going through foreclosure and bankruptcy are so large that I would do a lot to avoid it. I suppose that is just human nature. I am thankful I am not in those circumstances.
 
<p>Strange isn't it? I would venture a guess that NONE of us would rob a bank to get out of that situation.... but participating in this type of fraud IS equivalent to robbing a bank. However, in this case, the banks more or less created the environment where this is done so easily that a 24 year old with no job can purchase 8 homes in 8 months. So when I hear about this sort of fraud being conducted, I really don't feel sorry for the banks at all. They pretty much removed Quality Control from the equation. </p>

<p>One other side point: Until appraisals take affordability into the equation, they will always be the victem of bubbles. Appraisals using comps alone is how we got into this mess in the first place. The same is true for the mathematical models used for Automatic Underwriting. Too much emphasis is placed on the FICO scores, which in turn put too much emphasis on payment promptness and not enough emphasis on debt to income ratio. As long as HELOCs were available as equity rose, they borrower could maintain decent credit by increasing their debt (nice irony). The models were wrong. AU is supposed to figure out the likelihood that a borrow can pay back the money.... and since all equity increases in houses can be immediately cashed out... the lien holders lose all of their loan protections. Oh sure they are fist to collect... but the model failed to take into consideration the bubble effect of this kind of lending.... which down the road will lead to an implosion. I don't think any long term business model would knowing create an untenable market for themselves... but that is exactly what they did with Automatic Underwriting.</p>
 
<p>I agree with Irvine Renter that if you are going to do it then cut the rationalization. Just b/c the lenders/banks were unscrupulous in their lending practices, this doesn't justify the individual to commit fraud. Two wrongs don't make a right.</p>

<p>Also, shouldn't people be accountable for their actions? We have all ranted against the collective group of sub-prime borrowers who have driven the frenzy of the housing bubble and there isn't much sympathy for their irresponsibility. We would expect them to face the consequences of their greed, poor judgement, etc... So, why is the standard different when it comes to our individual matters? At the end of the day, it all cycles back b/c it hurts the whole economy and the community and will eventually reach its way back to us as individuals in different forms. But I guess since it comes back in a different form, we can with a free conscious blame something/someone other than ourselves.</p>

<p>I think like most people on this forum, I wouldn't find myself in this situation since I'm pretty conservative and risk averse. But if I were faced with foreclosure and bankruptcy, I probably wouldn't do it since I have a tendency to do what I feel is the right thing even though it may be detrimental to my interest. Perhaps, I lack the appropriate self preservation skills.</p>
 
<p>I just read on the blog how this scheme works. I must say that if I am the seller facing financial ruin I would have no qualms about doing this. I don't even consider it fraud. The risks to all parties are pretty open. </p>

<p>It is creative financing where someone is going to get screwed in the end. If it saves me from being the one who gets stuck at the end of the chain, then its OK.</p>

<p>Sorry guys. But nobody is going to look out for me if I don't do it myself. And the market be damned.</p>
 
<p>Here is the link:</p>

<p><a href="http://bubbletracking.blogspot.com/2007/04/whos-actually-buying-these-properties.html">http://bubbletracking.blogspot.com/2007/04/whos-actually-buying-these-properties.html</a></p>
 
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