I'm Really Tired Of Hearing "Fraud"

I'm Really Tired Of Hearing "Fraud" by Bill Roberts

When people lose millions in the stock market because of market action, nobody is yelling "Fraud."

We're not talking about a particular stock, we're talking about the market.

A lot of what has happened in the real estate market is the result of market action.

It is about high risk scenarios, not-well-thought-out mortgage products, the un-warranted belief that the market only goes up, and the ill-timed actions of the Fed.

A well-respected Las Vegas Realtor® keeps saying "Fraud" whenever she sees a lot of foreclosures.

I don't think so.

Let me explain: I live in San Diego (350 miles due south of Las Vegas). While the "Boom" was going on many San Diegans were buying in LV.

Builders would "announce" a new tract and these San Diego "investors" would put in a reservation along with a small deposit. They expected to make thousands of dollars by the time their house was completed. They would then re-sell immediately upon completion. This strategy worked during the boom.

But when the market went flat these "investors" were stuck with their houses because they couldn't sell for enough to re-capture their costs.

The tragedy is that some builders sold everything to these out-of-area investors. Is it any surprise that whole sub-divisions are in foreclosure?

Some of these "investors" probably did commit mortgage fraud by stating on their loan application that they intended to occupy the house. Who knows?  Maybe they did intend to occupy. And then some did occupy. Maybe they legally bought as an "investor." Loan programs were available where legitimate investors could buy with only 10% down. They had plenty of cash from the last house they "flipped."

And then some buyers actually moved into their new houses, but they couldn't really afford the monthly payments, taxes, insurance, HOA fees, and maintenance. They were "hoping" to re-finance into a "better" loan with better rate and terms.

But they couldn't re-finance. NO EQUITY.

BAD JUDGMENT does not equal FRAUD.

Prices are low enough in Las Vegas for FHA and conforming conventional loans. Little or no down payment is required for an owner occupier.

Rents are going up daily, Renters are being "squeezed."

Stop crying fraud and sell those houses to the renters. If they can afford the rent, they can afford the mortgage. FHA doesn't even require a good FICO score, just a demonstration that they pay their bills.

It might even make sense for San Diegans to return to Vegas for a second home.

The prognosis for the LV economy is excellent. Gambling, Entertainment, and Conventions still draw millions of visitors to Nevada every year.

Nevada is "Business Friendly." Land for business expansion is still relatively inexpensive.

Now is the time to BUY, BUY, BUY!

I am not licensed in Nevada but I would be happy to refer you to a trusted agent there. Give me a call. Bill Roberts 619-244-4610.