I wanted to comment quickly on this story here about a real estate agent, his wife and several others in the San Diego area who have been accused of engaging in several types of fraud between 2002 and 2007.
Prosecutors in San Diego have accused the defendants of falsifying income and information by “coaching them [their clients] on how to fill out loan applications for home purchases.”
This control fraud was similar to numerous others going on throughout the US at the same time (For more information, click here). No doubt these activities contributed to the housing bubble that finally burst in 2008.
The defendants took advantage of their information asymmetry regarding their clients’ incomes to create liars loans by going after the subprime market — “low income immigrants” in this case.
According to the article, the lending banks lost close to $15 million, a hefty sum of money but a tiny fraction compared to the billions lost in total in the US, which highlights how rampant real estate fraud was during this period of time.