The Great Plotnik

Wednesday, November 10, 2010

Over the Edge

Two and a half days at World Headquarters working with D-Blue are over. On the way back from BART today Plot heard a This American Life about Florida's King of the Real Estate Scammers. Man, was that ever eye-opening.

It was really simple too. Say half a dozen people are in on the scam, put together by a real estate agent. Somebody in the group buys a house (I'll give you the figures I heard today from Florida) at somewhat below market, $600,000. A few weeks later he sells it to somebody else in the group for $710,000. That person takes out a new loan to pay off the first person and everyone in the group splits the $110,000 profit. A few months later person 2 sells the property to person 3 for $900,000. New loan, new profit split. Over the next eight years the property sells 10 times, finally topping out at $2,000,000. No one ever moves in, no work is ever done on the house, but the real estate agent is the buying and selling agent each time, and guarantees the house to each new bank.

In the end, the market crashes and the last seller foreclosers, damaging his credit. But he and everybody else keep all the money they made up to then and split up on the sales. The losers are you and me -- and the economy and the country and the world.

So what did they do? They gamed the system. Everybody was in on it, including the banks who just packaged their loans and sold them to somebody else, eliminating their risk. Whose money was that? You didn't happen to own any bank stock, did you? Oh, you DID?

There are so many people whose entire lives are devoted to gaming this system or the other. They vote for the Tea Party but scam the government out of social security, unemployment insurance, taxes, anything they can get away with. And then they tell you how much they hate government.

Plotnik hasn't gone on a rant in awhile. This crap pushes him over the edge.


At 3:50 PM, Blogger mary ann said...

Oh, grrrrrrrrrr, this really pisses me off.

At 5:07 PM, Anonymous Elvis the Angry said...

Yeah, TARP was a really good idea. Sure. Unless and until I see bankers and mortgage brokers doing the perp walk, no voting for me. The government has been purchased, so why bother?


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