Fraud makes meltdown worse

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CHICAGO–As the U.S. housing meltdown forces hundreds of thousands of Americans from their homes, the extent to which fraud was a factor in the crisis is just coming to light.

Products such as stated-income loans – known as “liar loans” because no proof of income was needed – led to widespread misrepresentation by borrowers about their earnings.

But far more sinister forms of fraud, including identity theft and “straw buyers” – those created using fake documents – are also coming into the open.

Mike Reardon of nonprofit lender Neighborhood Housing Services of Chicago (NHS) points out two such properties, both boarded up, on South Rockwell Avenue in Chicago’s blue-collar South Side.

The owner of one of the homes was traced to Texas, he said.

“Turns out it was a case of identity theft,” Reardon said, shaking his head. “He had no idea he owned a home in Chicago.”

Across the street, he points to another boarded, slowly rotting home, which had last been sold to a woman named Susan Haas.

“I may be wrong, but I’ve been looking for months and months and I can’t find any proof Susan Haas exists,” he said.

Read more here.

1 comment so far ↓

#1 Julie on 03.07.08 at 2:59 pm

Dear Mr. Turner:

I just finished reading your book from 2002 about real estate. I was motivated to follow up with your website, partly from general curiosity and partly because you are the only person I’ve read so far to directly address details of the RRSP mortgage.

I’m not writing for advice, but simply to say that I think you’re great. You sound like a wonderful person, and if more politicians were like you, people would me much happier with politicians.

You don’t represent me, as I live in Hamilton, but I like your political (and financial) voice.