'No payment' foreclosure scam

Good morning. Fox 11 has a foreclosure scam story that's worth watching this morning. Reporter Gina Silva profiles "real estate consultant" Raul Altamirano, whose advice to would-be real estate investors includes: "When you don't make the payment, you should be very, very happy! ... I didn't make the payment, and I'm still here!"  A couple of alleged victims tell how they followed Altamirano's advice, borrowed against their home equity, and invested money with Altamirano, never to see the money again. This abandonded blog appears to have been started by Altamirano, who declined to comment when approached by Fox 11.

I know some of you will take the view that only an idiot would fall for this kind of scam. Perhaps. But the scam could only exist in an environment when lenders fought for the chance to make loans to these people.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.

Comments

[nls73m]

Peter, you said it for me, thanks:

Only an idiot would fall for this kind of scam...

nls73m

[JK]

Exactly how did these people think they could borrow money, not make the payments and still keep their house? Oh yeah, some strange man that we met on the internet is going to pay it for us... He didn't screw these people, they screwed themselves by trying to get something for nothing!

[blah]

"the scam could only exist in an environment when lenders fought for the chance to make loans to these people."

What continues to blow my mind about this entire real estate/mortgage disaster is that this environment was even allowed to exist. I mean where was the government oversight, where were the CEO's of wallstreet, where were all the people in high places who should have seen this coming and why didn't they do anything about it?

What's the point in having CEO's, the FED, all the people in power, etc. if they can't fulfill their responsibilities.

And it's not that hard to see, since essentially what happened is that money was given away, never to be returned. It doesn't take a genius to see that a $30k/year garment worker will never be able to repay a $500k loan. Mind boggling that this was allowed.

[jb]

Peter,

I think there is a fair amount of confusion with regards to "walking" on your mortgage. Perhaps it would be useful to outline the rules of the game in CA as best as it is understood at this point.

Some points/questions
1. Non-recourse - does this apply to a first house or all, lived in or not? (impact on flippers vs owners)

2. Tax consequences - explain the Debt Relief Act of 2007 (has this passed, when is it likely, does this affect CA state taxes, etc)

3. It would then be nice to take an example or two - if you are X amt under, the costs associated with walking vs hanging on?

I think people should walk if it makes sense, there is an article at CNN.com by Les Christie who claims that "Jingle Mail" is a NEW term - I say the banks have seen it before, had all of the know-how to prevent it, and kept buying increasing risk like heroin addicts (or at least really reckless). I think they should bear the costs of this crisis, they engineered it with highly trained, highly paid, risk management professionals (again, these risks were not new, jingle mail is not a new term)

here is the link to the article http://money.cnn.com/2008/02/06/
real_estate/walking_away/index.htm

[Blows Against The Empire]

Burn all the mortgages and start over. It'll stimulate the economy, too. Bosnia did it, but only the Serbs got the deal leaving the Croates really really ticked off.

[TakeFive]

Lee Iacocca said it best many years ago in his autobiography;

That of the seven deadly sins, he considered Greed to be the worst. He saw more people undone by greed than by all the other sins put together.

That has never been more true.

Lee's still at it with a new book:

"He begins at the top and attacks the White House: On page one he writes, "We've got a gang of clueless bozos steering our ship of state right over a cliff."

"'Stay the course'? You've got to be kidding," he writes in the book. "This is America, not the damned Titanic."

http://www.cbsnews.com/stories/
2007/04/19/sunday/main2704953.shtml

[Ace]

I drove by a van today that was wrapped in advertising for a company called 'House Bolters'. I immediately thought it was some scam where they teach you how to leave your keys on the table and bolt for only $995.

It turns out that actually bolt houses to foundations. I think they would make more money in this market by teaching people to bolt.

[MyLessThanPrimeBeef]

I think I just got a feeling. I am feeling stimulated.

Oh, yes, the Senate just passed the stimulus package.

Discuss.

[yinyang]

The tragedy of all this is that we will all pay. Either by tax (government bailout), sinking stocks and investment if there is no bailout (especially for those who have their retirement funds in the market), inflation (if feds keep lower rates), or recession and loss of jobs (if feds don't lower rates). So, I vote for a bailout using borrowed money so that the next generation can deal with this mess.

[Cal]

http://tinyurl.com/ywc5eb

MGIC (a major mortgage insurer) posted their restricted markets list in which they have tightening guidelines.

"California Entire State" <- the whole state is under their tighter guidelines.

For those who think Fannie/Freddie will save the market, anything over 80% LTV needs PMI and the PMI companies are taking fewer risks and charging more.

FHA is rapidly becoming the fall back position for "saving the market". But that is full doc only and 29/41 front and back ratios (which can be increased with significant compensating factors).

Those pinning their hopes on Fannie/Freddie/FHA saving us from the perils of falling home prices simply never looked at their underwriting guidelines.

[Help on Real Estate]

It seems that both lenders and consumers are to blame for the situations they've put themselves in. Lenders capitalized on the overwhelming and sudden increase in the real estate boom, while consumers wanted a piece of the American Dream...homeownership. Business was so good and the volume was such that no one, including lender's quality control and compliance departments, could keep up. Plus, everyone's wallet was getting fat. Those same fat wallets from 3 years ago are the ones that are scraping by and skipping out on their mortgages, furthering the problems.

I agree with blah's post...where was the government when all of this was going on?

[Kat]

If it's not one thing it's another with these fools. People in California build million dollar homes on fault lines, on beaches and in the forests of a state that droughts for six months a year.

Now it's this greed and stupidity driven debacle of people paying ten times their annual incomes for 1000 square foot homes tha'ts going to cost the tax payers billions

Is it something in the water out there?

[centruy 21 a better service asgent]

This guy is a total scam artist. they need to throw away the key on him. He is all over the city of Downey offering his misrepresented services and waiting for his prey. He used to work at Century 21 a better service and got thrown out for his unethical practices. When are they going to arrest this scam artist.