Thursday, January 04, 2007
Can Casey Serin Go BK?
- Misstated income (at least for the last three, it must have been).
- Lying about his intent to occupy them
- Undisclosed cash back from the sellers. It was done as a contract addendum and was not submitted to the lender. In one case, @50 thou was paid to a third party at closing and then came back to him. This is not unsophisticated.
One of the first things that a new LO gets asked to do is to do a stated income deal where it is obvious that the borrower does not make that income. Many brokers will do whatever they can to get a loan done and make their commissions, and will often encourage their LO's to do that and sign off on the deal. Typically, the broker will look at the borrower's debts and then determine what the income needs to be to support the loan. The deal gets submitted and approved, and the Lo makes his or her commission.I cannot imagine that a bankruptcy filing with all his debt isn't going to show a number of red flags, and if he tries to lie about what he did, he'll just be getting himself deeper in the hole with perjury charges. He has no plausible deniability left. There's also a huge question as to how he managed to rack up all that debt so quickly when he seems to have scammed over $100,000 out of those mortgages. Add that to his credit lines, his credit cards, and his wife's credit cards, and I find it hard to figure out where the money went in so short a time. How did he run out of funds by July?
Now, suppose that the loan goes south in the first year, which often happens if the income can not support the loan and other debts. If the borrower files a BK to discharge other debt, the loan gets looked at, and the borrower's tax returns are requested by the court. They also request a copy of the 1003 package, and compare incomes. If there is an obvious difference, the borrower gets investigated for loan fraud, which is punishable by jail time. The loan officer and the broker also can and do get prosecuted, and if the borrower says that the loan officer told him what to put down for the income, the LO can also go to jail. How do I know this? I have watched I know buy a house going "stated" and then filed a BK within the first year. The trustees requested her tax returns and her 1003 and noticed the big discrepancy in incomes. She is now facing prosecution and the loan officer and mortgage broker have been called in by the prosecutor as well. As it stands now, all three are looking at being charged with committing loan fraud, and all three are looking at jail time.
The moral of this story is to think twice before signing off on a stated income deal when you know the income is not there. This is a felony offense and nothing that you want to get involved with.
A lot of people think the blog is a scam, but I found the foreclosure papers in Texas, and the mortgages and the NOD's on several of the houses in CA. There is someone named Casey Serin who did buy these houses and is getting foreclosed upon, and I cannot imagine that the real Casey Serin wouldn't have showed up to counter all of the admissions of guilt if this kid were an imposter milking the story. I did find a business license on Finch (Serin = Finch) Properties in Placer County, and I found a number of business licenses for Casey Serin in Sacramento County, including a vending machine one. It kind of looks like there is no get-rich scheme that this kid won't try except working for a living. In this case, he's outsmarted himself. Did he do this all by himself? I doubt it. I bet he'll be singing like a bird soon.
My guess is that the litigation over mortgage practices is going to become overwhelming, because while most don't blog about it, such practices have become common. I don't find it surprising that subprime lenders are running into trouble - I find it surprising that so many still have their doors open. If people can't clear debt with bankruptcy, what's going to be left? We have a rather unique situation here, and yes, it is doomed to get uglier.
Die Flipper Scum.
The Headless Unicorn Guy
Some similarly business-minded folks from the old country also run into tough times, due to their own innovative ideas for creating wealth, just like Casey:
Uzbekistani immigrants await discussion of entrepreneurial methods
The site bills itself as "the leading semi-satirical wiki about foreclosure blogs", and I'd say that's accurate, given the predictably rather vertical market for "semi-satirical wikis on the topic of foreclosure blogs." Still, it's a good read.
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