The Denver Post from Colorado. “Two years ago, Colorado issued a warrant to arrest Taiwan Lee, a state prisoner who had vanished on parole. He hadn’t gone far. While police looked for him, he bought three houses at inflated prices in Arapahoe County with the help of lenders who put up the entire $1.9 million.”
“After he was caught and jailed, he managed to buy two more. Until the foreclosures commenced, Lee owned five villas in an affluent gated community while living behind prison bars 150 miles away.”
“In the Denver metro area alone, more than 1,000 homes sold for at least 110 percent of the original asking price in the 18 months ending in June, according to research.”
“The Denver Post searched foreclosure records on 739 of these homes sold between January 2005 and April 2006. Already, 55 have been foreclosed, or one of every 13 homes, an extraordinary number even in a state where one of every 408 homes is in foreclosure.”
“‘It clearly is a problem,’ said Colorado Attorney General John Suthers. ‘We have been looking at house purchases over cost and money going back to the buyers.’ Suthers’ consumer protection chief, Jan Zavislan, said the office is investigating various participants in inflated sales, including buyers, sellers, appraisers, mortgage brokers, real estate agents and title companies.”‘
“We’re looking at potentially every participant in these transactions,’ Zavislan said. ‘We’re just seeing way too many of these things.’”
“Critics say mortgage companies have little incentive to ferret out inflated sales because they bundle and resell their home loans to Wall Street investors, taking their profits and diluting fraud losses in large pools of mortgage-backed bonds.”
“These securities get ’sold in little pieces all over the world,’ said Lou Barnes, a Colorado mortgage bank owner. ‘It makes it very difficult to figure out who, if anyone, bears any responsibility for the flow of Colorado’s foreclosures.’”
Tags: Mortgages, Real Estate, Homes, Market Conditions
