It wasn’t long ago that most Thought Leaders were publicly denying the existence of a housing bubble, perhaps even unkindly. Now past the denial phase, many have skipped the mea culpa and jumped directly into bargaining phase. Below is a list of delightful ideas being seriously considered by People Who Know. Can you tell which thing is not like the others?

From The Big Picture by John Mauldin:

“Long-time readers know that I have been growing more and more bearish of late. I have been writing for a long time that we are in for a long period of slow muddle-through growth as the twin crises of the housing bubble and credit bubbles require time to heal. Today, we look at a serious proposal for cutting the time to healing for at least one of those bubbles (housing), and at least keep the other (credit) from getting worse. This is the most serious idea I have seen that could actually make a realpositive (sic) contribution to the economy and help put us back on a growth path.

“(Recently), the Wall Street Journal published an op-ed by my friend Gary Shilling and Richard LeFrak. They offer a simple solution for the housing crisis: give foreigners who will come to the US and buy a home resident status (green cards). … The links to the (PDF) white papers are:
http://www.frontlinethoughts.com/pdf/Housing_Whitepaper_1.pdf
http://www.frontlinethoughts.com/pdf/Housing_Whitepaper_2.pdf”

From The RGE Monitor”:

“In (our) paper, we propose a plan that will help reduce the costs from foreclosure by, in effect, giving the homeowner the option to force a renegotiation on the owner or owners of the loan. This option takes the form of what we call a prepackaged Chapter 13 bankruptcy, in which the mortgage is automatically readjusted in line with the decline of housing prices in the homeowner’s ZIP code. The homeowner ends up with positive equity in his house, so that he will either maintain the house or sell it outside foreclosure, and the creditor ends up with a claim of greater value than the foreclosure price of the house. Because both parties are made better off, the cost of credit should not increase in the long run, and taxpayers do not have to subsidize the scheme. The plan is premised on the assumption that widespread negative equity mortgages, as a consequence of the popping of the housing bubble, are the chief cause of the crisis, rather than loss of income caused by the recession, which the plan does not address.”

From Reuters:

“… Noted economist Dr. Mark Dotzour says bold government action can get the market back on track. In his new white paper, the chief economist for the Real Estate Center at Texas A&M University offers a … solution to fixing the housing crisis, one that involves more than simply devising ways to keep people in their homes.”

“‘We need to lower the depreciation schedule for investors who buy troubled houses to around five to seven years,’ he said. ‘And if we really want to solve the problem quickly, offer these investors 0 percent capital gains tax if they hold the properties for more than five years.’

“Dotzour’s (PDF) white paper is available online at http://recenter.tamu.edu/pdf/1884.pdf.”

From “How America Can Escape the New Great Depression” by Michael A.Kamperman:

“The government simply needs to crank up the printing press and buy every U.S. Treasury bond it can get its hands on. This idea flies in the face of conventional wisdom and will have many detractors. Most of these detractors didn’t see the problems we face today coming. Most of these detractors have told us we could not return to a 1930s-style depression. Most of these detractors told us that the rest of the world had decoupled from the U.S. economically and that the global economy would grow even if the U.S. went into recession. This solution is outside of the box of conventional wisdom, and some consider it impossible. We need to listen to new voices and new ideas because the old voices restating the same old ideas have not been able to put the Humpty Dumpty credit markets back together again.”

From The Atlantic, by Felix Salmon:

“Amazingly, (the housing mess can be solved) with just one policy: a decree that whenever a bank forecloses on a home, the current occupant has the right to remain in the property indefinitely, simply by paying the fair-market rent. Banks are killing each other by racing to sell their foreclosed houses as quickly as possible, before they fall further in value; this policy would force a cease-fire that would help all of them. It would also put an end to the equally destructive syndrome of soon-to-be-foreclosed-upon homeowners trashing their houses before they’re kicked out. This plan might not single-handedly end the recession. But it would certainly help.”

From Weiss Research:

“With the goal of avoiding quick fixes and fostering a healthy, long-term recovery, Weiss Research offers the following proposals to federal regulators and legislators:

1. Closer monitoring and prompter action by the Federal Reserve to help avert run-away asset price inflation.
2. Better enforcement of existing predatory lending statutes.
3. Better protection of borrowers through a model akin to one recently established between the Office of Thrift Supervision (OTS) and three subsidiaries of American International Group.
4. Greater focus by regulators on banks and thrifts whose mortgage performance measures are showing the most stress.
5. Suitability requirements for the mortgage lending industry.
6. Rather than a ban on specific lending practices, limiting them to the uniquely qualified borrowers for which they were originally designed.
7. Federal training, education, licensing, and testing standards for mortgage lenders.
8. Assignee liability for secondary market buyers of home loans.
9. More focus on developing programs that promote saving for a down payment.”

Michael Larson concludes: “These solutions cannot be painless. But in order to pave the way for a sounder future, many of the sacrifices that were avoided in the past may have to be made in the present.”

And then there is this from our resident blogger. “What most people see as the problem, I see as the solution. What’s going to to help Las Vegas and Arizona…the reason that it grew for years (was) that there was cheap land. You could get a house for $100,000. When we get back to that, Arizona will heal.”

“The biggest challenge we face is…we have to get back to an economy based on something other than buying and sellling each other houses…and taking out loans and spending them on cars and vacations.”

“Michael Hollern, chairman of the region’s largest developer, said the Bend boom coincided with the one in the Sun Belt. The building boom began gradually in the 1960s and took off seriously a few years ago. ‘We thought we were different, special, with real jobs and real people. It turns out we weren’t that different. And we realized prices were out of touch with reality. Now we need to work off our excesses,’ he said.”

“San Joaquin County’s rate of foreclosure notices - at 5.6 percent, or roughly one filing for every 18 properties in the county - is third highest in California. It’s behind only drought-stricken Merced County at 6.9 percent and Riverside County at 6 percent, where the real estate collapse has triggered massive, ongoing layoffs. ‘That will have to come down 90 percent before we’re in any kind of normal situation,’ said Jeff Michael, director of the Business Forecasting Center at University of the Pacific, of the foreclosure rate.”

“‘Arguably, we had the biggest bubble of all the bubbles, and we were certainly the area first to hit the very high foreclosure rates. The other places are catching up to where we’re at,’ Michael said of San Joaquin County.”

“The number of Utah households in danger of losing their homes almost doubled in the first half of the year as more people lost their jobs and were struggling or unable to pay their monthly mortgage bills. On a state-by-state basis, Utah had the nation’s fifth-highest rate of filings in the January-through-June period, according to RealtyTrac Inc. Filings in the state soared 87.65 percent during the six-month period.”

“‘It’s getting worse,’ said Tara Rollins, executive director of the Utah Housing Coalition. ‘We saw it in two different ways, one, when mortgages were readjusting we saw a wave. Then all of a sudden people started losing their jobs, and that was another wave.’”

“The number of foreclosures in Frederick County may have dropped in June, but that doesn’t mean the housing crisis is over. ‘The subprime mess is on its way out. Now we are starting to see the unemployment impact,’ said Stephen ‘Buzz’ Mackintosh of Mackintosh Inc. Realtors.”

“It is no longer the creative loans faltering, Mackintosh said, but consumers who had been paying their mortgages on time now faced with losing their house. ‘Fifty-six percent of foreclosures are now on fixed-rate mortgages,’ Mackintosh said. ‘That is the effect of people losing their jobs.’”

“Construction jobs account for only about 10 percent of Lee County’s work force in 2009, the lowest figure in the past decade. The loss of construction jobs and the subsequent loss of jobs related to construction - Realtors, mortgage brokers, even furniture sales associates - has driven Lee County’s unemployment as high as 12.4 percent in May.”

“Robert Towns Jr. of Fort Myers, said he worked in construction for more than 20 years before losing his job installing tile about 18 months ago. He worked for a retail store, but is now unemployed again. ‘We were busy for seven or eight years, working seven days a week or as much as we wanted,’ Towns said. ‘And then it just stopped.’”

“Bay Area home prices rose month-over-month for the third straight time as sales reached their highest level in three years in June, fueling hopes that the limping real estate market is slowly beginning to heal. Whether the nascent recovery gathers strength or sputters in the months ahead will depend on the broader economy, the job market and foreclosure levels, economists say.”

“Meanwhile, California’s unemployment rate leaped to 11.5 percent in May as employers cut 68,900 jobs, according to the state’s Employment Development Department. Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University in Orange, said home prices could bottom out by the end of the year, but an actual rebound won’t occur until companies feel confident enough to begin hiring again, a mood unlikely to prevail before mid-2010 at the earliest. ”

“‘What trumps all these variables is jobs,’ he said.”

“Home sales in Santa Clara County jumped to their highest level in three years last month. But the market still has a long way to go to recover the ground it has lost in this recession. At the housing bubble’s peak, in July 2007, the county’s median price was $805,500. In June 2008, it was still $670,000, but it bottomed out at $420,000 in January.”

“Rick Weinberg, spokesman for Auction.com in Irvine, which handles foreclosure sales, said ‘the pipeline is still packed. The foreclosures are trickling out slowly, but by the time October comes they’ll be gushing.’”

“‘The housing market is not operating independently of the overall economy,’ said Leslie Appleton-Young, chief economist with the California Association of Realtors. ‘It really depends on whether this economy slips back into a deeper recession or we get more momentum.’”

“‘There was an over correction on the way down, just like there was when prices were going up,’ said Craig Lewis, president of Prudential California Realty. ‘We’ve hit the bottom. I don’t think prices will move up rapidly, but they’ll rise slow and steady now. There are plenty of buyers at these prices, but not enough homes.’”

“But there’s a long way to go before most current homeowners will be happy. The median price paid for a Stanislaus home was $396,000 in December 2005. Virtually every home purchased in the last eight years is worth less now that it was then.”

“The number of homes sold in the Victor Valley has doubled from a year ago and the inventory has fallen by half, according to June housing figures. The reason is simple: a glut of foreclosures. Ninety percent of homes sold in June were bank owned, according to Victor Valley MLS data prepared by Larry Trombley with Century 21 Rose Realty.”

“‘What’s having an impact on the market right now and reducing the number of foreclosed homes for sale is the California moratorium on foreclosures,’ Trombley said.”

“The good news: The Portland-area housing market didn’t get worse in June. The rest of the news: It didn’t get much better. ‘There’s likely an enormous amount of hidden inventory in the market,’ said Tim Duy, a University of Oregon economist. ‘The market is so relatively weak to what people’s expectations are.’”

“Many of those potential sellers are waiting to list their homes until they think they’ll get a higher price, according to real estate brokers. Once the sellers plant their ‘For Sale’ sign, the supply will expand again and could put pressure on prices to fall again.”

“For evidence of a ’shadow inventory,’ Duy points to the slower than normal growth in listings this summer. The real estate market is cyclical, with slow winter months followed by spring thaw and a hot summer. During that cycle, the number of homes listed typically expands steadily from January to July. In 2008, listings grew from January to June by 28 percent. In 2007, it was 40 percent, and in 2006, 52 percent. This year, the rise is just 3 percent.”

“Clark County’s supply of new and preowned homes for sale dropped dramatically last month, as more houses sold and fewer properties came on the market. ‘A lot of people who have been sitting on the fence are starting to come out,’ said Paula Standfill, a sales agent in Vancouver.”

“Other buyers are rushing to make purchases before the tax credit deadline of Nov. 30, said Tracie DeMars, an agent with Re/Max Equity Group Inc. ‘People realize there’s only a few more months left, so it’s now or never. When the federal government gives you $8,000 to buy a home, that goes a long way,’ DeMars said. ‘They have to close by Nov. 30 or they’re not going to get it.’”

“Rising home sales aren’t the only contributing factor to Clark County’s shrinking inventory of homes listed for sale, said Sue Pauley, a Realtor with Windermere Real Estate/Stellar Group and treasurer of the Washington Realtors Association. Pauley said some homeowners have canceled their for-sale listings, especially sellers of higher-priced houses $400,000 and up that were purchased at the peak of the market. The upper-end homes now appear to be languishing.”

“‘Some people have taken homes off the market if they’re going to take too big of a loss because of the competition with short sales, foreclosures and REOs (real estate owned, or bank-owned properties),’ Pauley said.”

“Chico Real Estate expert Debbie Brodie says locally it is all about supply and demand. ‘We’re seeing a definite pick-up in the market. A year ago we had 371 houses on the market in Chico, at this time we have 279,’ said Brodie.”

“Brodie believes past decreases in home values, coupled with the new influx of stimulus money, is making it easier for new home buyers to get into the market. ‘If they can get the $8,000 fed tax credit, and they can also get a Chico City subsidy possibly, it makes it so families can afford their first home.’”

“Woodland trimmed some of its builder fees earlier this year. Talks continue now between home building industry representatives and development department officials in Sacramento County and the cities of Lincoln, Rancho Cordova and Folsom. The cuts in Woodland and Elk Grove followed negotiations with builders who say fees once raised to boomtime highs no longer reflect the new reality of land values. Talks continue now between home building industry representatives and development department officials in Sacramento County and the cities of Lincoln, Rancho Cordova and Folsom. The cuts in Woodland and Elk Grove followed negotiations with builders who say fees once raised to boomtime highs no longer reflect the new reality of land values.”

“Capital-area real estate agents say they’re seeing more parents bailing children out of real estate investments that have put them ‘under water.’ Agents say it’s increasingly common to see parents buy their children another house similar to the one they bought at the height of the market or too early as the market cooled.”

“In many of these cases, the house has lost up to $200,000 in value. So the parents’ rescue mission moves their children into another house where lower payments are aligned with today’s lower values. Then the children do the best they can to unload the old house. That causes less damage to their credit than walking away.”

“If society just followed the advice of its grandparents, there wouldn’t be an ongoing crisis with foreclosures that helped trigger the nation’s economic woes, according to the author of a new book. Shari Olefson, a Tampa, Fla., attorney…says simply blaming Wall Street, government regulations or predatory lenders — all who share culpability — is just shifting responsibility away from those who bought the homes.”

“Attitudes are changing during this crisis, but not always in a good way, Olefson says. There are people who can afford their homes who are walking away or talking about walking away because they are so far underwater, she says. ‘With those attitudes right now, I don’t know what the result will be in the next five to 10 years,’ Olefson says. ‘We are heading farther down the path of a lack of personal (responsibility).’”

“Greed is a big factor, of course, especially on Wall Street because many assumed that prices would keep going up and that mortgage money would be available, Olefson says.”

“Olefson says she knows people who earn more than $500,000 a year who are talking about walking away from a $2 million home because its value has dropped so sharply. They are angry because they look at their neighbors defaulting on their homes and driving down the property values in the neighborhood, she says. A lot of people made flawed decisions, she says. But despite all that, it comes down to homebuyers, Olefson says.”

“‘None of this could have happened without our participation,’ Olefson says.”

“Bidding wars are returning to South Florida’s housing market, as investors and first-time buyers compete for homes and condominiums listed at $200,000 or less. The race for properties is reminiscent of the boom years from 2000 to 2005, when multiple offers on all types of dwellings helped push prices to record highs.”

“Investor Greg Bales bought a three-bedroom home in Lauderdale Lakes three months ago for $65,000 — $1,900 less than what it sold for in 1985. Bales beefed up the curb appeal with a new paint job, trees and other landscaping. Inside, he installed laminate floors, granite countertops, new kitchen appliances and an alarm system. He put the home back on the market July 10 for $139,900 and fielded 10 offers, three for more than the asking price. He selected a bid from a first-time buyer for $145,000, and the deal is expected to be complete next month.”

“‘We would have had a bunch more offers, but my real estate agent told the people it really wasn’t worth their time if they weren’t submitting a full-price offer,’ Bales said.”

“Meanwhile, some real estate agents are creating ‘drama pricing’ — listing properties for far less than the market value to attract bidders and drive up the eventual selling price. ‘It’s like ‘Ta-da’ said Douglas Rill, an agent for in West Palm Beach. ‘It creates so much of a buzz that it results in a bidding war.’”

“Tony Thomas is looking for a home in the $200,000 range in central Palm Beach County. He made three offers, only to be told each time that another buyer out-bid him. His agent, Liz Golub, told him to ‘run like a bunny’ to make strong offers as soon as properties come on the market. The strategy paid off recently when the owner of a home near Lantana accepted his offer. But because it’s a short sale, the bank must approve the deal, and that could take months.”

“‘It’s frustrating,’ Thomas said. ‘I have not seen the benefits of this buyer’s market right now.’”

“They just keep piling up. Despite heavy government intervention and moratoriums aimed at stemming the flow of faltering home loans, forclosures continue to ramp up. On Thursday, RealtyTrac Inc. reported that the foreclosure crisis affected more than 1.5 million homes in the first six months of the year.”

“Marty Rodriguez, owner of Century 21 Marty Rodriguez in Glendora, said most of the transactions her office handles are bank-owned properties or short sales. And Rodriguez figures there are plenty more in the pipeline. ‘They’ve been on hold and now we have another 90-day (state-imposed) moratorium,’ she said. ‘But that’s up on Sept. 1. We’ve only hit bottom now because there is a lack of inventory until the next wave of foreclosures hits … and that’s coming.’”

‘Steve Johnson, director of the Southern California office office of Metrostudy, agreed that more misery is on the way. ‘I think we’re presently preparing for a second wave that will be coming into the Southern California marketplace,’ he said. ‘It’s being caused by continual job losses throughout the state and a continued weakening of the economy by people falling behind on their payments.’”

“Sen. Christopher Dodd., D-Conn., chairman of the Senate Banking Committee, called the overall lack of progress by the government ‘disgraceful.’ He noted that borrowers are facing long delays as they try to get help. ‘We’re being asked every day by our constituents and others: What’s going on?’ Dodd said at a committee hearing.”

“Close-in Dallas-area neighborhoods that had dodged the worst of the housing recession are now getting clobbered. Park Cities home sales plunged 37 percent in the first half of 2009. In North Dallas, sales were down 19 percent from the same period last year, and median prices are off 17 percent.”

“Real-estate agents blame the in-town slowdown on a number of factors. ‘It seems that the overall Dallas market was immune to the housing downturn for a while,’ said Barry Hoffer, an agent with Ebby Halliday Realtors. ‘Now the softening market has finally caught up with us.’”

“The sagging economy and consumer confidence are the top obstacles, said Veteran Dallas appraiser D.W. Skelton. ‘It’s buyers sitting on the fence that is the biggest problem,’ he said. ‘No one is going to start buying new homes when the job numbers continue to drop.’”

“Skelton thinks the bottom of the market is still at least a year away. ‘I’m still telling my clients to sell now and not risk further loss in value.’”

This time last year, one of the hottest debates on this blog was whether rents would rise or fall as a result of mass foreclosures. Let’s see what’s happening so far:

From AMEInfo :

“Apartment and villa rents have reported a sharp decline of 22 and 34% respectively in Q1 2009 in comparison to the prices in the fourth quarter of 2008, according to the Dubai report issued by Asteco, the UAE’s largest property services company. Commenting on the trend, Andrew Chambers, Asteco’s Managing Director, said ‘This is a positive development for house-hunters to either take up an attractive property on rent or buy as Dubai turns into a buyer-driven market. We are witnessing a high number of transaction activities, especially for finished units, as investors take advantage of attractive investment opportunities available in the city.’”

From BalkanTravellers.com:

“Pushed by the lack of clients, owners of office buildings in Romania are reducing their rent rates. The office rental prices are lowered by 20 per cent, in attempts to encourage clients to rent, especially if (they) are a solid company (that) would sign a long-term contract, representatives of the Eurometropola company told the Evenimentul Zilei newspaper.”

“Even though the average discount in office rental prices was 20 per cent last year, in attempts to find clients some owners have decreased their asking price by 35 per cent, according to the publication.”

“The rent decrease comes in the context of the overall fall in property prices in Romania. As BalkanTravellers.com reported in January, experts forecast a drop between 10 and 60 percent in real estate prices.”

From the Institute of Commercial Management:

“London rents have dropped the fastest in the UK this year – with City rents dropping a huge 19% … Matt Hutchinson, Director of Research at SpareRoom.co.uk, said ‘London rents have taken a serious blow in the past year, making it an ideal time for tenants on the hunt for a bargain. The financial crisis has claimed countless city high-fliers, and falling demand has seen rents in the borough plunge. Other wealthy boroughs such as Westminster and Richmond upon Thames have also been badly hit in the past 12 months. There’s been a huge increase in supply over the past 12 months, which has forced down rents. Existing flat-shares have been renting out additional rooms to save money, and the number of households taking in a lodger has also grown dramatically.’

“However, SpareRoom.co.uk has warned that the drop in prices is only temporary. The number of people looking to flat-share is on the increase, with the number of seekers per room rising to 2.4 (in June), up from 1.9 in April and 2.0 in May.

A report from The Real Estate Group, New York:

“Year-over-year comparisons show that prices are still lagging 2008 by as much as 12.30% in doorman one-bedroom units. On a month-to-month basis, however, rents are beginning to stabilize in most categories. The only category to post a decline this month (June 2009) was nondoorman two-bedroom units, which fell 2.56%.”

“Yet, while there has been some leveling off of asking rents over the past few months, demand does not appear to be enough to uplift rents as we’ve become accustomed to seeing in the summer months. Additionally we’ve noticed landlords that had been previously testing the market by removing tenant concessions, have added these incentives back into the mix this month.”

“I continue to caution landlords to carefully monitor their properties this summer and avoid being caught with excess inventory come fall. While Manhattan’s rental market may be showing some signs of improvement, these should not be interpreted as the road to recovery just yet.”

From Recordnet:

“Rent prices continue to drop in San Joaquin County because of the increasing number of foreclosure homes turned into rentals. The average rent for apartments countywide dropped 2.2 percent from $881 in the first quarter of 2008 to $862 in the first three months of this year, according to the latest quarterly apartments survey by RealFacts, a Novato research firm that tracks trends in the apartments industry.

“‘It’s too much supply and too little demand; just classic economics,’ said Terry Hull, whose Stockton-based family business Property Management Experts manages apartment complexes, duplexes, triplexes, and rental homes from Elk Grove to Fresno. ‘More and more investors have bought foreclosure houses in this area, the epicenter of the foreclosure market, and turned them into rentals at low-enough purchase prices that they can rent houses competitively against apartments. That permeates through the marketplace.’”

From Southern States:

“Ohio cropland and cash rents are anticipated to level off in 2009, and in some cases, decline slightly, according to results of the Ohio State University Extension 2009 Ohio Cropland Values and Cash Rents Survey.”

“‘High commodity prices and relatively low input costs drove up profits in 2007 and 2008, but this year is not the case. We are unlikely to see those profit margins in 2009,’ said Barry Ward, an Ohio State University Extension economist and production business management leader. ‘That’s going to put producers in a tough spot. Will they have made enough money in the last two years to weather the storm in 2009?”‘

“According to the survey, produced by university economists within the Department of Agricultural, Environmental, and Development Economics, Ohio cropland values are expected to decrease by 2.4 percent to 4.9 percent, while cash rents may level off or decrease slightly by 0.24 percent. In some cases, depending on the region and land productivity, cash rents could increase 1.24 percent.”

The National Association of Realtors (NAR) and the National Association of Mortgage Brokers (NAMB) have been lobbying hard to prevent, delay, and reverse any legislation that would give government regulators more sway over the real estate industry. Both organizations have spent a lot of time and effort convincing consumers that their members are professionals, having received auspicious licenses from trustworthy boards. Why in the world would we need additional state oversight when these professionals are already being held to such high standards? But let’s take a look at what went on during the recent real estate bubble. Did the NAR and the NAMB do a good job at weeding out criminals and preventing fraud, or do they need a little help?

From the Office of Law Enforcement Support, Financial Crimes Enforcement Network (warning, PDF).

“… Depository institutions filed an increasingly large number of suspicious activity reports documenting suspected mortgage loan fraud between 1996 and 2008. (In 2007), depository institutions filed more than 62,000 reports, compared to 14,484 (in 2003).”

“Professionals in real estate and financial industries frequently were reported as subjects in all of the suspicious activity reports examined. … Financial industry occupations, including mortgage broker, … were documented in 32 percent of the reports from insurance companies reviewed. Twenty-one percent of subjects were identified as real estate professionals, such as real estate agent …. Similarly, real estate and financial occupations constituted the largest occupation groups reported by money services businesses.”

“FinCEN’s 2008 report on mortgage loan fraud identified California as the state that reported mortgage loan fraud most frequently. A review of reports filed by money services businesses and casinos also showed that most study subjects resided in California. A review of reports filed by insurance companies, however, showed more suspicious activity by residents of Florida than any other state, including California.”

From Mortgage Fraud.org:

“On June 4, 2009, investigators from the San Bernardino County Real Estate Fraud Prosecution Unit arrested a Rancho Cucamonga real estate agent in a fraud scheme that has defrauded scores of victims in the county. Beginning in 2006 and continuing through 2008, Richard and Desiree Nazabal solicited funds from victims to invest in several Inland Empire homes with the stated intention of renovating and reselling the properties at a profit. More than twenty-five people invested more than $2.5 million dollars with the Nazabals. Instead of investing the victims’ funds, the Nazabals used the money for personal gain and never purchased homes for the victims.

And this:

“Starting in 1999 through in 2001, LaDonna Mullins, aided and abetted by others, devised a scheme to defraud and to obtain money and property by means of fraudulent representations and promises from mortgage companies that funded federally insured loans. As part of the scheme, Mullins and others working with her would locate buyers who desired to purchase a residence but were unable to qualify for a mortgage using the buyers’ accurate credit history, income and employment, and/or other financial information. The defendant and others working with her would assist buyers who could not qualify for an FHA-insured mortgage legitimately …”

“‘Her fraudulent actions resulted in the foreclosures of Colorado homes, which have added to the destabilization of the real estate market,’ said Christopher M. Sigerson, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office.”

From the Milwaukee Wisconsin Journal Sentinel:

“Sometimes the seeds for a real estate career are planted in the prison yard. Real estate is a popular subject among the drug dealers and white-collar criminals doing time in low-security federal prisons — facilities often called Club Feds.”

“Michael Rowsey’s foray into real estate began almost the moment he was placed behind bars. Rowsey was sentenced to 17 years in prison for first-degree reckless homicide for shooting and killing a Milwaukee man in 1991. Rowsey got his loan broker’s license in 2005.”

“Rachel Dollar, a California attorney who tracks mortgage crime nationally for her website, says much of the nation’s mortgage fraud was committed by people who had records before entering the business.”

“‘The fact is that a lot of felons do become repeat offenders,’ she said. ‘We do see a significant number of mortgage fraudsters who engaged in similar conduct or in other forms of criminal conduct in the past before obtaining licenses.’”