Top Scoops

Book Reviews | Gordon Campbell | Scoop News | Wellington Scoop | Community Scoop | Search


Eco-Economy: The Toy Boys of Fraud…


SCOOP EDITOR'S INTRODUCTION: The following essay on Mortgage and Real Estate Appraisal Fraud in the US housing market records in some detail the micro-level impacts of the largely un-told back-story of the US housing market. It does this from the point of view of an experienced operator working on the front line of the business of real-estate valuation.

Some of what follows will not be completely new to more acute readers of who will notice that some of what is described here has been warned about by Scoop Columnists Chris Sanders and Catherine Austin Fitts (on whose mailing list this is also being distributed) for some time. Readers are urged to enjoy the occasionally colourful turn of phrase used by the "Ole Bear" in his expose, and consider deeply the many gems in his research. Many of the links in the text below will take you to the "Ole Bear's" website -


The Toy Boys of Fraud…
It takes at least two, to tango, Dude!

An exposé of mortgage & appraisal fraud… in the United States of America, and Central Missouri
Descartesians of the Realm Essay Series – Ole Bear's Musings -- Fraud
By Gale Bullock


Foreward… to an Iceberg's Tip, Or a Really Pornographic Movie?


No, we are not alluding to pornographic Internet websites at all, but one picture is worth a thousand words, and deviate behavior in actions and minds can sure conjure some rather wild fantasies when one goes to the Dark Side. It seems Fed Chairman Greenspan has gone to the Dark Side with recent comments before Congress, aka the Ship of Fools, regarding re-regulating, manipulating, and controlling the GSE money pump in the realty inflating game of two-tiered structured finance designed to hold up both Wall Street and the Consumer as the US Economy. Not only do we have FED monetary policy inflating the heck out of real estate in every micro realty market in America, the poor ole GSEs are now being blamed for possible systemic risk to global financial markets and need better "supervision." That's a real hoot, if you know how to follow the money.

We think there is a much bigger problem below the surface of this political cat-calling, for Fannie Mae, including Mr. Raines are sparring with the FED BO$$. But isn't that just a Tango between Toy Boys? The problem is this…. The GSEs have a guaranteed monopoly over the US mortgage market, and they are chartered by the Ship of Fools to have this monopoly. These rascals pool mortgages and peddle them in investment pools to global investors in the game of two-tiered structured finance. Investors buy these suckers because they believe that the Ship of Fools will bail out the GSEs in case of a financial emergency… or if you will, the financial feces hitting the proverbial fan. Although the Ship of Fools did bail out the S&L industry in the late 80s and early 90s as a precedent, that was only about $160 Billion FRNs. Today, if the Ship of Fools bails out the GSEs in a financial crises (note the plural) because of their derivatives games on the planet, and the Good Lord only knows what else, the Ship of Fools cannot be guaranteed to bail out these Rascals. Our best guess the amount of the bailout will be somewhere between $3 Trillion to $8 Trillion FRNs, since these GSEs ain't got no cash -- if this Ponzi Shell Game goes on for another ten years, I probably missed it on the $8 Trillion FRNs!

That poses a big problem for the FED BO$$. The FED has even been putting out the poop and scoop on the GSE Ship of Fools subsidy, and other stuff on the GSEs, to further its direct control over how these rascals rig the markets. The FED wants them regulated by the FED, centralized, and thus directly controlled to further rig the "free markets" outside of Congress, the Ship of Fools. However, since the Ship of Fools created these Amorphous Bastards, Congress should directly control them, if they even think about voting for their bailout. You can bet your sweet behind, if the FED can rig markets by pulling puppet strings, its job is a helluva lot easier, if it regulates, centralizes, and controls the puppet, under the Myth of the Rule of Law.


The Prime Directive

This is all part of the ongoing process of total banking consolidation in the USA, identified by Mr. Larry Becraft, Attorney in Alabama, in his Memorandum of Law: The Money Issue. I call this process the "prime directive" of the American Central Bank, i.e. the Federal Re$serve, which is nothing Federal, nor a Reserve of any kind, but a privately held central bank with a death-grip on This Republic. From Memorandum of Law: The Money Issue:

The scientific art of creating booms or depressions for our economy has been fully developed by the "Fed." This organization can now totally control the U.S. economy, and this ability allows it to totally control any particular industry. The past few years have clearly shown the ability of the "Fed" to attack any industry, be it the automotive, oil, or transportation, and bring that industry into its control. The current industry under concerted attack by the creditor creators is agriculture.

Of particular significance presently is the war of the "Fed" against its own kind, private commercial banks. The Fed desires to bring all banks directly under its control and to create out of some 14,000 independent banks a few large industry giants. The fewer the number of banks, the greater the control by the "Fed." A deposit made into a bank in heartland America can quickly result in credit extended to Red China.

- From Page 51 of 65, Period IV: Fiat Law Equals Fiat Currency, 1968 to Present.


Covering Up the Game of Fraud and Setting Up the Fraudulent Bailout?

The FED BO$$ hasn't said much until only recently about the GSEs, as well as stealin' from the Social In-Security Retirees who are my generation, as a means to get Baby Bush re-elected. Heck, Al, why don't you just run for King? Baby Bush has already come out and said Social Security is sacrosanct, in the same week he supports a Constitutional Amendment forbidding Gay Marriages. What will the Toy Boys of Fraud do, if they can't legally tango, and do the dance? Grin.

If foreign investors think there is a major problem with the GSEs, they just might start getting the flock out of Dodge City, and dump FRNs as well as the mortgage-backeds, and take their money back home to Amsterdam, Olso, and Gay Paree… Why all the push and shove now to place the GSEs under the Treasury or the FED BO$$, given last year's ballyhoo about the GSE accounting irregularities? Gay Paree, won't be so cheerful and gay, if the GSEs do a belly flop in the financial markets, will it, Toy Boys at the FED? Being the bailout lender of last resort, just means printing more money with that Bernanke Jackass driving an Army Attack Jet Helicopter without a chauffeur's license throwing the legal tender fiat funnie money to the markets bubbles?

We suspect the Toy Boys of Fraud have been at work in all those "local" micro realty markets which the FED BO$$ says can't be a markets bubble, and no we aren’t talking about safe financial sex. We are talking about the mortgage and appraisal fraud behind those GSE Portfolios, which we suspect some investors are catching wind of. If folks on the planet knew the real story behind Fannie Mae and the GSEs, and the mortgage fraud and appraisal fraud already in their portfolios, they would pee in the pants. From what we see on Main Street, these Amorphous Bastards actually condone the fraud. We suspect heavy metal, gold and silver, to be a much safer investment for the time being with the perpetual, never ending persuasive and pervasive fraud, but you won't hear that from the promoters of Wall Street, two-tiered structured finance, or the Federal Re$serve central bankers, as they inflate the currency, and inflate the holy hell out of real estate and mortgages. Not only are the GSEs too big to fall, so is JPChase and their $36 Trillion in derivative counter-parties, some of which are in the gold rigging scam, but a lot more in the real estate gig. One laugh's one's behind off when one knows that the GSE portfolio is a sham to begin with… with all the credit scoring for loans, and 125%-150% equity loans. Pal, if the GSE book of business is backed by asset value collateral, I will eat my Jockey Shorts. It is so full of mortgage and realty valuation fraud, with all the pipes, funnels, and filters in place -- it is an amazing Mafioso Network.

It appears that appraisal mis-management companies don't like you to tell 'em up front when mortgage fraud and appraisal fraud are involved in their portfolios. The tentacles of control are absolutely marvelous in the guise of cover-up. This little game started last year with St. Louis Fed Governor Poole and his little exposé on the housing market, and continues through Mr. Fedspeak Passmore's exposé on the implied GSE Ship of Fools Subsidy, or don't you read? What the Holy Hell are these Elitist Bastards trying to cover-up and hide from those folks on the Champs Elysées in Gay Paree? Wouldn't you think that if Fannie Mae had a little fraud in their mortgage-backeds, they would want an honest realty valuation expert to tell them? Guess Again! -- that's now how this works!


Following the Money? Or How to Tango…

Yes, this is an iceberg. It hit the boat, RMS Titanic in April 1912. Most of what you see, is only about 1/9th or so of the critter (the iceberg), because the rest of it is hidden below the surface. Shall we say that icebergs have a lot to do with dancing the tango, for it takes two to tango. In the game of Mortgage Fraud and Appraisal Fraud, we have a willing lender and a willing realty appraiser, who commit to the dance. No, the lender in this day and age of Credit Scoring and Blitzkrieg Mortgage Lending is not generally innocent, so get off that tangent right now. The game is played by the appraiser inflating the value of the realty collateral for the proposed mortgage loan, and many times "Just the facts, M'am" are not revealed. The guy making the loan gets a fat commission, and it is a helluva lot more than what they pay the Toy Boy Appraiser. Well heck, when you are peddling this inflated crap into the secondary, and the GSEs are peddling this crap in the game of two-tiered structured finance to all those global investors, we tend to look for big players and big frauds -- but it is more pervasive than that. 98% of the tango dancing is right under our nose, if you know how to compose a tango, dance the tango, and follow the money…. Behind the Toy Boys. The pipes, funnels, filters, and channels of deception absolutely scare the Hell out of me.


You want a loan… ?
Or, Toy Boys at work?
Have I got the appraiser for you!

The above home was appraised June 2002 for $289,000 on the Bastard 2055, one page realty valuation report form (concocted by Fannie Mae for Blitzkrieg Mortgage Lending as a worthless piece of crap that anyone called a realty appraiser could rig with the data, taking all the brains out of Toy Boy Prostitution). This Bastard 2055 started production in 1995. This above subject property was supposedly inspected both on the interior and exterior. We performed a review appraisal on this property in October 2002 for a lender, who was able to get a copy of the 2055 report prepared for the lender who ended up making the loan. We concluded that the property was probably worth in the range of $240,000 to $260,000+- based on all of our review work. $289,000 eh? $29,000 to possibly $49,000 inflated? Now one can be assured the lender is not warehousing the loan…. And it is now probably in someone's mortgaged-backed portfolio… Do any GSEs come to mind? Multiply $49,000 inflated by 100 total properties in a portfolio and new math produces $4,900,000 inflated…. Assuming the best case $2,900,000 inflated? What are the property stats….? This is a custom home where the lot was purchased in 6/2000 for $45,000, a local builder built the home for $206,738, which did not include $14,995 in construction overages for fluff and muff. Total cost of the four agents in production, namely labor, capital, entrepreneurship, and bank capital is $266,733. Ehhhh… cost ain't directly correlated to market value for realty, but we shall just toss that out there on the table and let you folks wrestle with that dead cat bounce. The date of the review as October 2002. You can do the new math. $266,733 -> $289,000 is 8.35% in 1.75 years or 4.78% price appreciation if you assume cost as related to market value. Have Fun living in an Ivory Tower with respect to cost being equal to market value. This is Columbia, Boone County, Missouri, Folks, not Boston, LA, or Florida.

If the property could sell for $289,000 in March 2003, I will eat my Jockey Shorts. The Bastard 2055 is inflated, not by much, but that much would cover real estate sales fees at 6%, wudn't it? Nope, the property is not a REO, but the loan is in someone's mortgage-backed securities portfolio, and the loan, "divested" -- is it you?


How much is that Rodin worth, Pal?
or, did they really stand naked for the patrons in the Brothels of Rome?

They didn't have telephones or cell phones in Rome, so ET could call home. All of my Brothel Rodin questions begin with a phone call. This time it was from my 20+ year Realtor Lady Veteran on a property she was about to list, and she had this appraisal she was dealing with. Could I come to her office?

Seems Miss Linda, the Lady Realtor Vet, was dealing with an appraisal on the URAR, or 2 page Fannie Mae Universal Residential Appraisal Report, prepared for a recent refinance on the property, where the sub-prime slime-bag lender charged the seller with about $5-6,000 in points, fees, and the works in closing costs. The appraised value of the property was $202,000. The loan amount was $179,000. One treads lightly in the Lady Realtor's office, when she asks what you think. I said: "Ain't no way, Baby!" "Can you do an appraisal for my seller, to get her realistic with the market?" queries the 25-year Veteran of Sales. Looking over the stats of the subject property, yeah, I can do an appraisal, but nope…. In his neighborhood, with this type of house on a slab, my work ain't gonna be no $202,000. That's fine… do the work, Pal!

The facts of the case revealed for the Realtor Lady List Agent a market value of about upper $130s to a high of about $141,000 imagining value. The property was listed after I submitted the realty valuation report. The property sold and closed in 4/2003 for $145,000 with $3,500 in additional lagoon work being performed on the jet aeration septic tank system. I appraised the property again at the sale with the new work being performed. The property did appraise at the sales price with additional market comparables. So… let's analyze this sucker…. $145,000 - $3,500 in lagoon/septic repairs gives us new math of $141,500, the top end range of my market value estimate several months before the sales contract. A loan amount of $179,000…. Is $37,500 above the sales price…. Now going to the Dark Side…. The $202,000 appraised price by the Toy Boy Slut less $141,500 approximates $60,500 on my HP12C… which I know how to work quite well since it is based on Reverse Polish.

Nah…. This one isn't in Fannie Mae's or Freddie Mac's inventory…. The owner lady had to refinance another property to close the sale since $179,000 as the loan balance, less the sale proceeds of $145,000 with Realtor fees at 6% sort of leave one holding the bag with no kitty kat. Appraisal Fraud? Mortgage Fraud? Sub-Prime Slime? And you just thought pornography was at the local Toy Boy Adult Store, or on those porn sites on the Internet? Grin!

******************* and Washington Mutual…. Houston we have a problem!
but never Sleepless in Seattle…. With a Pipe, a Funnel, and the GSEs…

We performed a field review for this outfit in March 2003. AIDirect Connection is the appraisal mis-management arm of a professional realty valuation organization. Wash Mutual on the West Coast ended up with the loan in the portfolio, and the loan probably originated with a local subprime lender specializing in financing new sales of modular homes. The value reported in the appraisal report probably done in December 2002 was $135,000. The property was probably worth $110,000 to $130,000, and probably if the property sold for $115,000 to $120,000 this would be a minor market miracle. The documentation in the whole two-page Universal Residential Appraisal Report (URAR) just wasn't there. There were so many holes in the report, one could drive a Sherman Tank through it. The report contained a series of errors and deletions, as well as the manipulation of market sales to hit the number -- the report was an obvious case of appraisal fraud. The selection of comparable sales weren't even comparable to the subject property. The series of mis-representations in the report could have been recognized by a three-year old. I thought I had done a great job in the review and mailed the report to the customer.

Late one Friday afternoon, after 5 PM of course, I get a call from this outfit, with a scathing message left on my answering machine. I have that tape with the message on it. I was called un-professional, told that my work was crap, and they could not send the review to the lender, and that they were embarrassed by my work, and performance. When I spoke with this Kool Kat SRA Muckety Muck the following Monday, he threatened that if he only paid the $400 fee, he was going to haul my assets before the Appraisal Institute, since he was "embarrassed" and my work un-professional. I was also told that I pontificated un-professionally on global economics and how to follow the money, and that was not appropriate in a realty valuation report or review. They also refused to pay my $600 fee plus express mail, which I had told them up front about when I accepted the assignment. Having been in this position before with Fannie Mae down in Dallas, I knew what to do. I told the Muckety Muck SRA to send the report back, and since he wasn't going to pay my fee for my work, it belonged to me. It wasn't until I sent this Rascal a letter in August 2003 that they sent my review appraisal back to me.


How the Lender Pipe Food Chain Works...

When this little movie was playing out, I didn't know what to make of it. Why wouldn't anyone want to know about appraisal fraud? It means there was mortgage fraud there as well, because in this game, you have to have both to tango. What I didn't understand at the time the movie was playing, was how the fraud is smoked and mirrored up the lender food chain. Having done a little more new math and following the money, the local sub-prime slime lender is the pipe, the appraisal mis-management company is the filter, the funnels are professional realty valuation organizations and the erudite bunch of Toy Boys at the The Appraisal Foundation playing to Wall Street, the GSEs, and the Federal Reserve (under the guise of FIRREA), and the target, the brass assets big boy lender (the prime directive agent Pretty Boy Floyd for the Federal Reserve, or the counter-party) with the Public Relations machine like Josef Goebbels in Nazi Germany, who gets the crappy mortgage, covers their behind by burying the crappy mortgage in the GSEs portfolio of mortgage-backed securities, that they buy on the Champs Elysées in Gay Paree. The GSEs are the Gestapo and Money Laundering mechanism in the food chain system. Pretty slick Little Willie, ain't it? What's even cuter, is the fact that the GSEs end up buying back these suckers (mortgage-backeds they already sold) in their derivatives crap. Gee, ain't Franklin Raines one smart Dude to grow the book of business at 15 to 20% a year!? It is all done under the Delphi Scam, Hegelian Principle, and Cognitive Dissonance!................. and smoke and mirrors!


When Fraud Ain't Fraud…. Just Growing the Portfolio, Pal!
And increasing shareholder value….. Or Show Me in Missouri, Dude!
Rural Suburban Kirksville, Missouri

Where everything is always in good hands with Allstate Appraisal?
Refinancing to the top of the market, & letting Fannie Mae have the REO… eh.. moldy cheese??

I was contacted in January 2004 by another appraisal mis-management company from the Chicago area (Allstate Appraisal, Chicago Heights, Illinois) to perform a Retro Field Review Appraisal with a full interior inspection for $275, and the contact was the C-21 Whitney outfit in Kirksville, MO, about 90 miles north of my office. Allstate faxed me all the stuff, including all the verbiage that Gestapo Fannie Mae uses to intimidate the hell of folks. I got a real chuckle when I looked over the instruction page for the assignment which was labeled by the mis-management company as a "Retro Field Review Order" -- all review appraisals are retro -- done in the present looking at a previously prepared appraisal report, or value in the past. I told the gal when she called back I got the stuff, I would make a couple of calls to Kirksville contacts, tell her up-front how bad the report was, and what my fee would be. When you have to travel 90 miles to another market, you like to know how bad the moldy cheese and dead fish are going to smell in REO work….

Firing them there retro rockets…

I learn a lot on the telephone. Since the C-21 office had the key to let me into the property, this was obviously the first phone call on Tuesday. It seemed that the property was under contract to close that Friday afternoon. The listing agent indicated that she had listed the property for $36,900, and that it was under contract to close at $36,000. Looking at the $71,000 appraised value as of May 2, 2002, I asked the Realtor Lady, what kind of shape the property was. I discovered that it probably needed about $10,000 worth of work to make it livable and bring the distressed property back. I told the Realtor Lady that I was looking at an appraisal on this subject property where the value was reported to be $71,000 in May 2002. Realtors always love to tell you how much they know, when some appraiser screws up, and they have a willing ear. The Realtor Lady indicated that the property was never worth more than $50,000, and it was probably worth $45,000 to $49,000 before the sellers tore the heck out of the property. This all seems reasonable…. $36,000 + $10,000 in curing deferred maintenance and repairs, that's $46,000 and another $3,000 to $4,000 to cover profit for the market puts the property in top shape at $50,000. What's even better, the Realtor Lady knew who did the appraisal report, and told me so. I already knew, but her recognition was priceless. I told her I would call her back later for an appointment.

The afterglow of ignition….

Fannie Mae is the client, and has contacted the appraisal mis-management company to hire a field review appraiser to perform a field review appraisal on the subject property. The faxed documents indicate Fannie instructs the appraisal mis-management company to offer me $275 to do the work. Covering my behind, it is going to take me a 12 hour day to go to that micro-realty market, inspect the property, drive the comparable sales, re-verify the data, and find additional market information to be able to justify and support the mortgage and appraisal fraud that went on here. $600 is my fee, so I called Purring Kitten Voice back at the outfit in Chicago, told her the fee, and they were dealing with mortgage and appraisal fraud -- it was a no brainer. The voice at the other end goes silent….eh…. we will have to call our client, and we will get back to you. I told her no problem, the proof in the pudding was that the property was closing that Friday at $36,000, but I could probably get in it either Monday or Tuesday, since it wasn't livable and the buyers were going to be making repairs. That was Tuesday. On Wednesday, Thursday, and Friday, Purring Kitten Voice and her assistant, Pammy Sue, wouldn't return my phone calls, and had their voice mail fully active so I couldn't talk to either of them. When I finally reached them on Tuesday, since Monday was a repeat of the same movie, Pammy Sue indicated they hadn't heard back from the client yet, which is Fannie Mae with a 972 fax area code, which is Fannie Mae in Dallas. Another week goes by, and I finally get the silky voice Pammy Sue in Chicago at the appraisal mis-management company. She indicates that everything is on hold. This movie goes from they wanted 3 copies of the review yesterday ASAP chop-chop, to now being on hold. Getting the silky voice another week later, Pammy Sue indicates the order is cancelled.


So following the money…. to the Champs Elysées in Gay Paree

I refinance the home based on a bogus appraisal report at $71,000. An 80% Loan to Value (L/V) gives me $56,800 more than the $45,000 to $50,000 value of the property. At a 90% L/V, I can get $63,900. Kool, Huh? Gee, I love a Tango! The pipe sends the appraisal through the funnel and the filter, the big brass lender gets the crappy mortgage, peddles it to Fannie Mae, and Voilá! -- instant mortgaged-back security on the Champs Elysées in Gay Paree. Actually, this is slicker than William Jefferson, ain't it? In the meantime, Standard Register shuts down in Kirksville, laying off about 750 folks in mid-year 2003. Obviously, there were rumors about this happening in 2002, since this is a small town. Did the property owner work for Standard Register? Great Question!

Here's the new math…. $71,000 - $36,000 = $35,000 inflated, but assume the property was in good shape on the date of value, so deduct $10,000 to $14,000 gives you $21-25,000 inflated. If the property were worth $45,000 to $50,000, with the $71,000 bogus appraisal, we get overstatements of market value from 42% to 58%. Pretty good returns, huh? $21,000 inflated x 100 portfolio properties is $2,100,000, and $25,000 inflated x 100 portfolio properties is $2,500,000. And knowing this new math, I ask myself…Self, why did Fannie Mae cancel this review on an obvious mortgage and appraisal fraud? I was smart and told 'em up-front.


Ohio Savings Bank, Fannie Mae, Bogus Appraisal, Review Appraisal, and Fulton, MO….
or see you in Church, Hill???

I received a phone call from the quality control department about doing a field review appraisal on County Road 311 just outside of beautiful Fulton, MO, home of William Woods University and Westminster College, and the home of the Churchill Memorial where the Cigar Smoker gave the famous Iron Curtain Speech in the late 1940s. I agreed up front to do the review appraisal for $500, since I was hungry. Fee wasn't a problem, and the quality control guy who said he was also an appraiser, would send me the poop over the fax. Not EDI-ing (electronic email transfer of the review appraisal) was AOK, as long as I could express mail and fax the meat and taters to him when I was finished, and I could look at it in two days. The next day I emailed this kool kat since he hadn't send me the additional comments and a few other things from the original report, and I was a little curious because he had faxed me a locator map and three comparable sales from what was an obvious previously done field review where the market comparables were adjusted $20,000 lower than the $92,000 final appraised value in the report to be reviewed. I already know that this is mortgage and appraisal fraud, and I want this guy to tip his hand and tell me a little more about what's going here:

Billy Bob:

A cursory look-see on the report noted above, you didn't send me building sketch or any of the appraiser's additional comments...
You did send a second market grid which appears to have been from a field review done sometime in 2003, probably by another party.
The original report was prepared by I. M. Good, Appraiser From Columbia, MO.
Once I get the rest of the report, I will plan on doing your review field work on Tuesday.
Is this subject currently on the Market and listed with a Realtor, in the process of foreclosure, or is it already a REO inventoried?
You can fax me the missing sections with the meat of the report... namely, building sketch, and the appraiser's additional comments...
Kindest Regards,
Gale Bullock, MAI, SRPA, SRA

I really don't have much idea at this time as to what this sucker is, or where it is, but I do know that it is a modular home, and fairly new on five acres with an outbuilding. After about two hours, I receive this in my email from Billy Bob:

Mr. Bullock:

Thank you for this information. I checked with our asset recovery department and they don't wish to proceed with a field review at this time. Thank you for your effort -- Billy Bob

My Reply:

Billy Bob:

It's you all's nickel...
I was just getting ready to go to Callaway County to do the work...
Just looking at the report, and knowing who did it, I suspect you had a case for mortgage and appraisal fraud... but we wouldn't know that for fact, until I performed the review appraisal.
Your little file, is but the tip of the iceberg around here....

Best of luck and warmest regards,
Gale Bullock, MAI

I have always wondered about folks who use Times New Roman Font and colored ink! Thinking to myself that I am going to be writing this essay on mortgage and appraisal fraud, I hopped in my rusty '78 Olds Toronado and headed east on I-70 to the Kingdom of Callaway -- Callaway County never officially rejoined the Union after the War of American Secession, and is known locally as the Heart of Little Dixie.

In My Merry Rusty Oldsmobile…

I learned a lot in two hours driving the rusty '78 Olds Toronado. I drove the comparable sales first off, and had a bunch of sales that had I been doing a review, I would have driven and photographed. Then I found the subject property and drove its county road to the dead end. Not seeing a real estate sign on the subject, and no foreclosure notices in the windows, and with two vehicles in front of the property, I had no idea what the status was. Hopping over to Fulton, and dropping in the Assessor's and Recorder's office the owner of record had changed since the date of the realty appraisal I was looking at. It appears the property sold FHA and was financed for $63,105 as of March 26, 2003. The date of the bogus appraisal was March 14, 2001, and the review appraisal comparables were done probably in early 2003, if the property went through foreclosure before the March 2003 sale. Obviously, I could figure out whom the original appraiser was from my market. It wasn't until I went to Miller Real Estate and checked with my buddy Mike, that I could verify the sale. The property was listed with Miller Real Estate for $67,200, sold in 68 DOM as a FHA sale, and the sales price was $65,700, of which Countrywide Home Loans made a loan of $63,195 based on the Deed of Trust.

So here's the new math…

$92,000 - $65,700 indicates that the 2001 realty appraisal was inflated by $26,300 or about 40%. $26,300 x 100 properties in our model Fannie Mae portfolio totals $2,630,000. Not bad for a day's work. Day's Work is also the name of a chewing tobacco. So is Bloodhound…


Fannie Mae is also a candy… and Welcome to Blitzkrieg Mortgage Lending 101!

Ehhhhh… that is the subject property in the picture, and a mobile home next door…. Actually the mobile home is two mobile homes kind of joined at the hip in a nice L-shape. Nice pick 'em up truck with a definite gun rack, and nice storage articles in the front yard. Oh, let's see what's across the street from the subject property, shall we?

A property with a great view…

Callaway County has no zoning so you can really have a hodgepodge of stuff on the same county road. Subject's county road is a dead end, and generally speaking looks to be a rather rough neighborhood. I would not want to be on this street after dark, but my rusty Oldsmobile fits in well without attracting a lot attention, however, a late model Lincoln Town Car is definitely out of place. The street scene in the bottom view above is looking south along the subject's gravel street, and the subject is about 1/6 of mile down the street and on the right side. The view (top) above is visible from the subject's front yard, and is across the street from the subject property appraised. Here's what the appraisal says about the Neighborhood Data:

Neighborhood Comments:

Subject is located between Millersburg and Fulton off Route F in a rolling and open area. Many modular homes in this neighborhood. Average appeal to market and average employment Stability. Schools, shopping, and employment are all in Fulton to the east of subject.

Neighborhood Descriptor Checkboxes:

Suburban, 25-75% developed, stable growth, stable property values, demand/supply
In balance, and marketing time 3-6 months. Price range of single family homes is from
$45,000 to $120,000, with an average value of $68,000, and age is from 5 to 40, with
average age at 15. Land use is checked 35% single family and 65% vacant, and no land
use change is noted.

Market Conditions Comments:

Market conditions in Fulton and Callaway County, including subject neighborhood, have improved with the lowering of interest rates in 2000. It appears that rates will continue to remain low during early 2001. Sale price to list price ratios range from 96% to 99%. Marketing time continues to be around 85 to 90 days in this neighborhood. No financing concessions or interest buydowns.

Obviously, the appraiser hasn't read much on global market finance on how to rig the markets. The use of mortgage loan buydowns to rig the markets and keep real estate afloat supporting Wall Street went out of fashion in the 1980s, before the Crash of '87. The FED BO$$ has more sophisticated sub-primes, pipes, and filters now that he has centralized the realty valuation profession under the guise of FIRREA, the Financial Institutions Reform Recovery and Enforcement Act of 1989, and sucked in every realty valuation professional organization in North America, including The Appraisal Foundation, the head scam.


Is that Hog Lot two doors down from the Subject Property possibly some…
External Market Obsolescence, Fannie Mae?
or Come on a My House, I give you a candy…?

Our general observations regarding driving the subject street could find a lot of modular and mobile homes in fact, some which appear to be rentals. We noted no new construction, and depending on acreage size, we didn't see anything from the Rt. F blacktop to the end of the county gravel that would bring over $80,000 in 2004. Any of the stick built homes were generally 35-60 years old, and not much better overall than a 6 year old modular home. The above picture is interesting, since this is the only view you can take of the property, because of the board fence all along the frontage. This property is two properties south of the subject property. This property appears to be an older yellow farmhouse, several outbuildings, and there is no yard between the wood plank fence along the gravel frontage, since it is basically mud… it appears the owner of the property uses the area around the residence as a hog and cattle feeding lot…. Soooie!

Yahoo! How pigs can fly! This property was obviously not commented on the original appraisal report. That is in fact, an act of omission, which when coupled with a series of blatant omissions and reporting errors is generally considered to be a violation of professional valuation ethics, according to USPAP, the Universal Standards of Professional Appraisal Practice. So one can easily see the Toy Boys at work, the obvious misrepresentations in the location of the realty reported, and why the fraud needs to be covered up to protect shareholder value, and keep them mortgaged-backeds smokin' on the Champs Elysées in Gay Paree.

General Description of the Subject Property from the appraisal report….

Subject is a 1,248sf Coachman Modular Home on 28 concrete block? piers with tie downs, is a 1996 model, has a 3 year effective age, a 43 year typical physical life, is on five acres worth $17,500?, needs no repairs, and has no functional obsolescence. But external market obsolescence is not addressed. Site improvements total $3,700, and the cost approach indicates $92,095. There is an 18 x 24 metal pole barn.

Three comparable sales are cited in the report with 1, 2, and 3 having sold for $72,100, $93,000, and $107,000 respectively, each adjusted in the direct sales comparison to provide value indications of $83,136, $94,436, and $100,826 for 1, 2, and 3 respectively. The appraiser says this in his Market Comments, and I quote:

These were the best and most recent comparables available that were
similar to the subject in size, location, and design.
Subject and all comparables are modular homes.


When a lie ain't a lie, fraud ain't fraud, and the cow jumps over the moon…

Modular Home Comparable Sale 1

Stick or Site Built Bi-Level Ranch Comparable Sale 2
Nope, this ain't a modular home, Dude!

Stick or Site Built Ranch with basement Comp Sale 3
Nope, this aint' a modular home, Dude!

The closed data sheet for this subject property in the Fulton MLS system shows that the owner at the time of the 3/26/2003 sale was Fannie Mae. This is interesting. The file appraisal from March 7, 2001 shows the value of this subject modular home to be $92,000. The review appraisal performed for the REO prior to Fannie Mae's selling the property concluded $72,000. The property sells for $65,700. Now you, Dear Reader, tell me who the real Huckleberry is? Nope, the American taxpayer on Main Street America, Ma and Pa Kettle, and their dumb kids, Joe Six-Pack and Sally SUV! Now I know why Ohio Savings Bank pulled the plug on my review appraisal. Fire them there retro rockets! Two of the market comparables were not modular homes, Hellooooooooo! The appraiser flat lied. I surmise that Ohio Savings Bank didn't want to know, and neither did Fannie Mae, because neither did, all those nice folks on the Champs Elysées in Gay Paree. In this day and age of Blitzkrieg Mortgage Lending and Blitzkrieg Appraisal, no one wants to know in La-La Land. Ooooooo La! La! They must be just dancin' the Jumpin' Jesus Tango on the Champs Elysées in Gay Paree!


So????????? What the Heck Does This All Mean, Mr. Natural?
or, AVMs, Drive By Appraisals, and From India With Love…? And the Warranty of Accuracy!

ShakesBearean Aside:
What the Sam Hill is an AVM? See: AVM's Cause for Alarm -- Fryer, SRA

We surmise that Real Estate Mortgage and Appraisal Fraud exists in every micro market in the United States of America from the Poconos Region of Pennsylvania to Los Angeles, and all points in-between. The several cases I represented from my files contain three micro realty markets, Columbia/Boone County, Fulton/Callaway County, and Kirksville/Adair County, all within Central Missouri. Just when you think that real estate and mortgage lending couldn't get any more screwed up, Sahib, I stumble across the salient facts that now the mortgage lending and realty appraisal mechanisms are moving off-shore as well which will make the game of Mortgage Fraud and Realty Appraisal Fraud all the more easy to bury in the GSEs' mortgaged-backed investor portfolios for all those nice folks on the Champs Elysées in Gay Paree. And now:

"Stewart Mortgage Information (SMI) has announced a national solution for lenders ordering automated valuation products (AVM), broker price opinions (BPO), "drive-by" appraisals and full Uniform Residential Appraisal Reports (URAR) with a Warranty of Accuracy, through its new product named SAVE, or Stewart Assured Valuation Estimate.

The SAVE product allows a lender to purchase warranty coverage for an AVM or appraisal product ordered via SMI. SMI's proprietary ValuLogix(TM) platform allows a lender to utilize various AVM models based on certain loan and underwriting criteria. If the selected AVM does not meet the value or other criteria of the customer, customers can then step up to a BPO, drive-by or full URAR.

SAVE protects a lender against loss by warranting the accuracy of the property valuation as of the date of the AVM or other appraisal product and is transferable to a lender's successors or assigns."

From: March 1, 2004

Aren't these Elitist Mother Bears good at Smoke and Mirrors?

I just got introduced to Mr. John Dizard in this essay at titled Alarm Bells Sound for Fannie and Freddie:

*** ### ****

Last week, though, the Federal Re$erve chairman's warnings about Fannie Mae and Freddie Mac, the government sponsored enterprises, or "Sodom and Gomorrah", as one friend of mine calls them, came as something of a shock. He said that "we assess [systemic risk] as likely if GSE expansion continues unabated".

Mr Greenspan's warning was accompanied by one from Gregory Mankiw, the chairman of the President's Council of Economic Advisors, who warned: "Even a small mistake in GSE risk management could have ripple effects throughout the economy."

What's most odd about these warnings is that they appeared to come out of the blue. Over the past two or three years there has been a stream of articles, speeches, conference calls, and tedious op-ed columns by people such as yours truly about the potential systemic risk posed by Fannie and Freddie.

Since Mr. Greenspan is the master of acting hyper-political while posing as non-political, and since Mr Mankiw is on a very short leash held by the White House's political operators, one has to wonder the following: what do they know that we don't know?

Is some buttress in the financial system going to fail soon? Why are the pilot and co-pilot putting on their parachutes? Should we buy some more canned food and ammunition for the country house?

Not that I don't agree with everything both men said. They were entirely correct. However, there is no chance at all that there will be limits placed on housing finance in an election year. These are ass-covering memos.

There is also a red herring buried in Mr Mankiw's remarks. He said: "The [GSE] charters do not require the federal government to bail out a troubled GSE." This is true. Furthermore, the GSEs themselves say they do not need a back-up federal bailout. Their derivatives book, they say, enormously reduces their risk from a rapid increase or decrease in interest rates.

Both statements are subtly deceptive because they don't identify the parts of the financial system that would truly be at risk in the event of a serious "rate shock".

I don't believe the GSEs will have to be rescued by the Fed in a crisis. Nope. The people who sold them protection will have to be bailed out and, sorry Mr Mankiw, but the Fed does have an obligation to take care of them. ….

Then moving on later Mr. Dizard says…

Mr Greenspan and Mr Mankiw don't think they'll have to bail out Fannie and Freddie. They think they'll have to bail out the half dozen largest swaps and derivatives dealers who are the big banks and investment dealers. In a rapidly rising interest rate environment, the "gamma", or the rate of the rate of increase in their hedging of their obligations to the GSEs, could, or, if you believe the chairman, will, require the Fed to act as the derivatives counterparty of last resort. The math tells him this could be seriously inflationary.

Alarm Bells Sound for Fannie and Freddie -- John Dizard

*** ### ****

Black Scholes Derivative Model Fun and Games at Chase Manhattan…
$36 Trillion in Derivatives at JPChase pour vous?

Hummmm…. So there you have it… even though all those nice folks on the Champs Elysées in Gay Paree are quite comfortable thinkng the Ship of Fools would bail out the GSEs in case of a blowup, they already understand central banking, and know that the Federal Re$erve is the ultimate lender of last resort to bailout the Fraud and the GSE Amorphous Bastards derivative notebooks! As well as JPChase. Gee, this really is slicker than that William Jefferson! It is I, who is the real dumb assets!

The Prime Directive…. And the Money Issue? Remember Becraft?

Ehhhhh… excuse me!!! Who the heck is going to bail out on their so-called insurance plan of accuracy of their appraisals done from India? Are folks just drunk, dumb, stupid, or frigging ignorant?

When these mortgage broker pipes, funnels, and packagers of mortgage services put all these Warranties of Accuracy in their portfolio… Shipping off mortgage backed services and micro market realty real estate valuations to those Elephant Jocks in India who speak in very clipped Indian Turbanesque Queen's English clip?

"You want appraisal?…. How much you want on number? Thank you very much!
"You want loan, we have loan, thank you very much…."
"Rate good, thank you very much…"
"Would you like a Big Mac, Fries, and a $5.00 Coke with your application, Sahib?"

February 27, 2004
Appraisal services may take slow boat—to India
Times are tough, and mortgage companies and lenders are no exception when it comes to businesses that are trying to cut costs to improve profit margins. Lately, appraisers have cited pressure from lenders, competition from automated valuation models (AVMs) and the need to identify new markets as major concerns. Now there’s a potential that more companies may send appraisal work out of the country in order to take advantage of lower labor costs in places like India, the Philippines, Ireland, Poland, China and some Caribbean countries.

Mortgage lenders ship jobs to India
Greenpoint, Countrywide to open overseas call centers
Tuesday, February 17, 2004

I will guarantee you, Sahib, Mr. Greenspan isn't going to print enough money to bailout and any other dumb assetted mid-west regional banking conglomerate in Kansas or Missouri, because they were on the wrong side of the GSEs with an inflated, fraud written portfolio of cheesey real estate loans. The FED will allow Bank of America, Wells Fargo, or JPChase Manhattan take these rascals over in the game of bailout and meltdown, and print the money covering their assets to take 'em over, under the prime directive mandate of the Federal Re$erve System. The FED wants you, Bubba Bear! You guys will be too small not to fall. Welcome to the prime directive of total banking consolidation in the US, using realty as the loaded gun. The gun Mr. Greenspan loaded under FIRREA in 1989 after the S&L Bailout of $160 Billion. Dear Reader, do you know what the implications are having an AVM appraisal done for a mortgage loan in Chicago, LA, Denver, Lawrence, Kansas, or Columbia, Missouri from an Elephant Jock in Pakistan? Or India? Using an AVM on the other side of the planet? Neither Elephants, nor camels are indigenous to the United States of America, according to my knowledge of Zoology! However, the slick Federal Re$erve and GSE Trojan Horses are! However, I fail to see the prophylaxis.

A companion essay to that of John Dizard's is one by Mr. Frank Shostak, who penned an excellent scribe called Who Made the Fannie and Freddie Threat? at at this link .

This is an absolutely priceless essay by the adjunct scholar of the Mises Institute, and a nice read:

*** ### ****

Greenspan is absolutely correct that once the size of Fannie's and Freddie's assets and debts become too large there is the risk of a financial accident. However, this accident never emerges out of the blue, but rather as a response to and effect of the erosion of the pool of real savings brought about by the loose monetary policies of the central bank. The erosion of the pool of funding undermines real growth and the formation of real wealth, which in turn triggers the burst of the bubble. With real wealth falling people's capacity to support their liabilities diminishes.

Can then a stricter regulation of GSE's, as suggested by Greenspan, eliminate the risk of a plunge in the real estate market? As long as the Fed continues with its loose monetary policies, it will not be possible to eliminate this risk. Once loose monetary policy is activated it immediately sets in motion the process of a false economic boom, or financial bubble, which sooner or later must be liquidated because it is unsustainable. The longer the false boom, the more liquidations will be required. Loose monetary policy gives rise to various higher risk activities that prior to this policy would never have been considered. Hence, once the flow of money slows down the existence of these activities is threatened.

It is for this reason that the Fed continues to maintain its low interest rate stance: in order to keep various artificial forms of life going. However, this policy cannot be pursued successfully for an indefinite period. At some stage the Fed becomes nervous about the size of the false creature it has created.

Consequently, the attempt to rein into the size of the monster leads to an economic bust. Now, contrary to conventional wisdom the bursting of the bubble is the beginning of economic healing. It arrests the bleeding of real wealth generators and puts things into a proper perspective.

It seems to us however, that Greenspan is already preparing the public for the likely bust of the housing market. This in turn means that he is likely to fight off the burst of the housing bubble by an aggressive monetary pumping. However, if the pool of funding is already in trouble, which is most likely the case, given the present level of indebtedness in the economy and shrinking savings, then monetary pumping won't be able to "revive" the economy.

There is a strong likelihood that the U.S. housing market bubble has already reached dangerous dimensions. The trend adjusted house price index has been following an explosive growth path. After falling to -44 in Q2 1997 the trend adjusted house price index jumped to +60 in Q4 2003.

There are a lot of similarities in this regard with Japan in the 1980's and early 1990. During that period the trend-adjusted price index followed an accelerating growth path. A major reversal in this growth path took place after 1990 with the trend adjusted house price index plunging to -350 in Q3 2003 against a peak of +640 in Q3 1990.

It seems to us therefore that the Fed is barking up the wrong tree. It is not possible to fix the housing market problem by fixing symptoms. What is needed is to restrain the Fed from its reckless monetary policies, which structurally distort the economic environment and give birth to various ugly symptoms.

*** ### ****

The only thing I can add to the essay, is the fact, Jack, that the monetary central banking fraud system of pumping the markets, does best at what it is -- fraud. This is promoting more fraud in the mortgage loan and realty valuation business that it centralized under FIRREA, Credit Scoring, the deregulation of inter-state banking, and the prostitution of the real estate valuation industry by the centralization process mandating licensing, control, and continued regulation, which elevated any jackleg on the street who could walk through a house with a clipboard, tape measure, and digital camera in 15 minutes to professional realty appraiser status. The Appraisal Foundation and the Appraisal Institute, and the other realty valuation organizations went along, playing to Wall Street, and continually changing professional standards… raping the membership on the revisions for CEUs (aka Continuing Education Units), and never changing anything in their erudite Bodies of Knowledge are torpedoed. They have no Body of Knowledge to deal with this mess, when the stuff hits the fan in a macro market Realty Depression that has the propensity to be Hell on Earth. With lender pressure and client co-ercion on the realty appraiser, the fraud has grown like a terminal cancer. Gee, I hope everyone on the Planet has some form of Religion. As for me, I pray to Sweet Jesus for Redemption!


How much is that Hog Lot Worth, Mr. Chairman?
And, where did you get that Ph.D. in global econ and micro market realty prostitution, anyway?
Harvard or Yale Business School?
I went to the University of Missouri-Columbia, and Studied Zoology…!

or, just how persuasive and pervasive, is your Fraud, on America at that which is Nothing Federal, nor a Reserve of any kind….nothing but the Bank of Rome…and The House of Rothschild? Hummmm?

If all those nice folks on the Champs Elysées in Gay Paree, knew where Mr. Greenspan had his private parts, in relation to theirs…. With the crap appraisal fraud and mortgage fraud in the GSEs' mortgage-backed portfolios, if the Champs Elysées in Gay Paree doesn't get the flock out of Dodge City on their own cognizance, then they deserve to become patrons of the Toy Boys of Fraud in the Brothels of Rome, party to the Bank of Rome, the House of Rothschild, and the american central bank. But that's my view…. The folks in Gay Paree already know that the Federal Re$erve is the lender of last resort, and will silently provide the liquidity to save JPChase Manhattan's Derivative Book Assets when the GSEs melt down. And, so does everybody else!

According to the FDIC's September 2003 stats, the loan to deposit ratio in the US is 103.4%, not the 80 or 85% that most think it is. Under the current monetary policy of Greenspan's Federal Re$erve pumping money into real estate to hold up Wall Street and the consumer as the US Economy, we find this most disturbing. The systemic risk of the GSEs to the financial system in light of their mushrooming growth, their derivative counter-party risk, their lack of cash, and their monopoly on the mortgage industry with implied Congressional bailout provisions places real estate in a rather tenuous position in our view. Real estate, which increases in value because of recognizable forces from within the micro realty market, is always a positive market trend. However, real estate which inflates in price because of Federal Re$erve monetary policy, combined with the systemic risk of the Federal Re$erve as the derivative bailout mechanism lender of last resort to save the GSE portfolios from crashing by bailing out their counter parties who get tanked, we find most disturbing. That's the first way the GSEs can get bailed out. The second is a Congressional bailout. Either mechanism is highly inflationary to the existing money system.

Nope, it dudn't matter if the Ship of Fools, aka the US Congress, has balls or none to vote the bailout. The Federal Re$erve will do it as a matter of monetary policy…. The decision has already been made. Isn't prostitution of money systems, and real estate a really fun game? The taxpayer picks up the tab for Jumpin' Jesus Raines Song and Dance, and Smoke and Mirrors! Growing the shareholder value and the book of business at 15-20% a year. When most folks realize the linkage among central banking legal tender, which is debt backed, real estate which is debt backed, and heavy metal as specie which carries no debt, you may be surprised at what one to 20 ounces of American Eagles, Canadian Maples Leafs, or South African Kruggerands may buy. Grin! Nope, that surely ain't politically correct!

The mortgage and appraisal fraud that I see here locally, we believe exists in every micro and macro realty market in the United States of America perpetrated by the fraud of the Federal Re$erve Banking System. Not only is the fact that mortgage servicing and origination is moving offshore to India -- so is the realty appraisal process using globally satellited market values and AVMs (Automated Valuation Models) for micro realty markets in the USA, thus putting the local realty valuation industry out of the loop. Given the amount of bogus appraisals in the GSE portfolios already, the ability to pump the money supply and real estate values by the Federal Re$erve, will be absolutely unthinkable. The systemic damage to the United States of America under this scenario whereby the GSEs continue to inflate, putting bogus loans in their game of two-tiered structured finance, and the prospects of their derivative books blowing up, with the FED as the lender of last resort, or Congress Ok-ing the blasphemy, is absolutely unthinkable.

The problem with both our money system and real estate, and the prime linkage is the fact that both are purely debt backed -- there is only so much debt that the system is going to be eventually able to handle. Few modern day realty valuation experts have appraised property in a micro realty market depression. I have for the FDIC regarding the closing in 1984 of Bucklin Bank in Linn County. Folks are generally very smug (that goes for those professional realty valuation organizations and that Appraisal Foundation which has no Body of Knowledge to deal with this Fraud). Folks have no idea how fast debt backed real estate can fall (Implode) in market price, or how low (Full Meal Deal Implosion) a micro market can go, in a realty market meltdown. I do. The FDIC taught me very well in 1984, when they shut down the Bank of Bucklin, in Linn County Missouri.

Capital adequacy, Asset quality, Management, Earnings, and Liquidity (CAMEL)
Or, I'd Walk a Mile for a Camel!

If lender clients rely on realty appraisers either giving them their number to do the deal, or rely on realty appraisers to just tell them that the market is great and booming, pay me my $400 -- in light of the loan to deposit ratio being over 100%, where is the LIQUIDITY in the CAMEL rating -- or, is it just a CAME?

See: Ole Man Ozark -- Musings on Money and Banking -- the loan to deposit ratio…
See: Ole Man Ozark - I'd Walk a Mile for a Camel


Fast Mel Martinez, HUD, and the $59.6 Billion Missing… How much did the AI contribute?
And Dancing Naked on the Champs Elysées in Gay Paree with Jumpin' Jesus Raines…..

Given the Fraud at HUD with respect to the missing money, see: and click on Hotseat, the current problems at the GSEs, and the mortgage fraud and realty appraisal fraud right here in River City, which totally bloat the spurious nature of the FED Backed GSEs, one wonders why in the holy heck, when you tell Fannie Mae in Dallas upon an appraisal field review request, when they are told up front that they are dealing with mortgage fraud and appraisal fraud with respect to the previously prepared appraisal they faxed to me, they cancel the field review order, as if nothing is wrong? And they are losing thousands of Federal Re$erve Notes because of the Fraud? Is Franklin Raines drunk, ignorant, stupid, or just that damn smart to keep this Ponzi Shell Game going? -- knowing it dudn't matter, and life in the fast lane will be easier under the US Treasury (Federal Re$erve), as they ship mortgage lending services, including realty valuation off to India? It seems to me we are all doing the Greenspan-Raines Tango, the Fraud will continue until the cow jumps over the moon, and there ain't nothing that any of us can do to avoid the future bailout on the greatest real estate fraud in economic history.

See: Mel Martinez Hotseat
See: Where is the Collateral? -- Chris Sanders
'Fannie and Freddie Were Lenders': U.S. Real Estate Bubble Nears Its End -- Richard Freeman

This is a Myth of the Rule of Law. The mortgage industry and realty valuation industry is centralized, mandated, and regulated…. To be corrupt in a Mafia arrangement. You don't play, we don't pay. Hard to send your kids to college on that real meal deal, is it? The Fed has the GSE money pump which it has been controlling since they were created, Jack! With further regulation and control, and sending mortgage services and realty valuation services off-shore, Jack, you ain't seen nothing yet as far as the Fraud, or how inflated real estate can go. This is all part of the game of the Money Issue and the Prime Directive to centralize the banking system orchestrating a bailout. The collapse will be subtle…. One micro realty market and bank take-over at a time, for these rascals also control all the media. It will never be called a Depression, but this stuff has the propensity to make the 1930s look like a picnic on the Fourth of July. The pipes, funnels, channels, filters, and players and participants are all in place, and have been for quite some time…. from the sub-prime slime on Main Street, to the appraisal mis-management companies, to professional realty organizations playing to the GSEs, FED, and Wall Street, to the GSEs peddling the paper on the globe, and at the wink of a Greenspanian Eye….


"Want an inflated loan next to a Hoglot? If it belly flops and REOs, Pal, I can always right (write?) it off, since Bernanke works for me -- not only can he print money, he can fly a helicopter…. Besides, you should be holdin' hands and buying a SUV like my Bubba Dallas employee McTeer says..."
-- Guess Who?

I suspect the current hubbub and rush to further centralize and regulate the GSEs is that over the past couple of years, too many torpedoes of mortgage fraud and appraisal fraud have blown up the GSEs liquidity and loan loss ratios, and Greenspan knows it. In order to keep the Ponzi Shell Game going, and to keep things afloat (like the RMS Titanic!), he is about to sidestep the Ship of Fools as the lender of last resort, when he has to bail out the likes of JPChase on these nasty derivative counter-parties, which the GSEs are up to their eyeballs in. As an aid and abet to the cover-up, the mortgage servicing and origination industry, as well as the realty valuation industry is in the process of being sent off-shore, to facilitate and abet the game of bailout, covering up both mortgage and realty valuation fraud. That is just how powerful central banking, and the Federal Re$erve truly is.

Con Job, or Snow Job --- What is this Treasury Secretary Snow smoking?
Acapulco Gold, or Panama Red…..?

Treasury Sec. John Snow

This is one of the biggest Snow jobs yet out of Washington, D. C. , yet. Black is not black, white is not white, and smoking dope is only legal inside the Beltway!

Snow resists idea U.S. govt backs GSE paper
(Reuters, 03.09.04, 9:34 AM ET)

WASHINGTON, March 9 (Reuters) - U.S. Treasury Secretary John Snow on Tuesday directly took aim at mortgage finance giants Fannie Mae (nyse: FNM - news - people) and Freddie Mac (nyse: FRE - news - people), repeating previous warnings to investors that government-sponsored enterprises are not financially backed by the U.S. government.

"We don't believe in a 'too big to fail' doctrine, but the reality is that the market treats the paper as if the government is backing it. We strongly resist that notion," he said in prepared remarks before a bankers group here.

"You know there is that perception. And it's not a healthy perception and we need to disabuse people of that perception. Investments in Fannie and Freddie are uninsured investments," he said.

Copyright 2004, Reuters News Service

Now, isn't that Hoot! Grin! Talk about Reefer Madness! The next thing this Jackass will be telling us is that they don't speak French on the Champs Elysées in Gay Paree! and that none of this mortgage or appraisal fraud exists!


The Denouement --

There is an additional problem, which as I see it is rather serious… if not tenuous at best.

In a series of micro or macro market realty implosions in a controlled burn by the Federal Re$erve to deflate real estate, or the Full Blown Bastard (Depression and Total Real Estate Implosion and Collapse), there is no realty valuation organization on the Planet, which has the Body of Knowledge to deal with how fast real estate prices can drop, nor how low they can go, nor how long they can stay that way, i.e., the falling knife. Never catch a falling knife!

Every professional realty valuation organization is in an Ivory Tower. Got Gold, and Silver?
Grin! See: and and



Gale Bullock, Musically Analytical Investor and professionally designated realty valuation expert

About the Author…. See Link... musician, composer, valuation cat, and following the money, Dude!

I play around with some really serious Kool Kats in the Global Markets... right here from Columbia, Missouri!
Resume, not politically correct
Resume, politically correct

© Copyright March 2004,, and Gale Bullock. Our essay may be linked without permission but please send me an email notifying me of the link. Thanks.


Footnotes and Credits: (All my global markets friends and gurus, and thank you Secretary Snow for making a fool of yourself!)


For more on Blitzkrieg Mortgage Lending and Realty Appraisal, see extensive links at the end of:

© Scoop Media

Top Scoops Headlines


Gordon Campbell: On The Use Of Existing Drugs To Reduce The Effects Of Coronavirus

So now, we’re all getting up to speed with the travel bans, the rigorous handwashing and drying, the social distancing, and the avoidance of public transport wherever possible. Right. At a wider level…so far, the public health system has ... More>>

Gordon Campbell: On Oil Market And Regulation Crusades

Safe to say, Vladimir Putin did not expect the response he has received amidships from the Crown Prince of Saudi Arabia. Earlier, Russia chose to walk away from the OPEC talks in Vienna that were aimed at reaching an agreement on how to reduce world oil production (and protect oil prices) in the light of the fall in demand being caused by the coronavirus. No doubt, Russia and its allies in the US shale industry probably glimpsed an opportunity to undercut OPEC and seize some of its customers. Bad move. In reply, Saudi Arabia has smashed the oil market by hugely ramping up production, signing up customers and drastically cutting the oil price in a fashion designed to knock Russia and other oil suppliers right out of contention. More>>

Gordon Campbell: On 22 Short Takes About Super Tuesday

With obvious apologies to the Simpsons….Here’s my 22 short takes on the 14 Super Tuesday primaries that combined yesterday to produce a common narrative –Bernie Sanders NOT running away with the nomination, Joe Biden coming back from the dead, and the really, really rich guy proving to be really, really bad at politics. In the months ahead, it will be fascinating to see if the real Joe Biden can live up to the idea of Joe Biden that people voted for yesterday – namely, the wise old guy who can save the country from the political extremism of the right and the left... More>>

Gordon Campbell On Shane Jones: A Liability No-One Needs To Bear

New Zealand First has needed a diversion after weeks of bad coverage over its dodgy handling of donations, but it really, really doesn’t need what Shane Jones has chosen to provide. According to Jones, New Zealand has ... More>>

Binoy Kampmark: Strong Man Legacies: Burying Mubarak

Reviled strongmen of one era are often the celebrated ones of others. Citizens otherwise tormented find that replacements are poor, in some cases even crueller, than the original artefact. Such strongmen also serve as ideal alibis for rehabilitation ... More>>

Caitlin Johnstone: Humanity Is Making A Very Important Choice When It Comes To Assange

The propagandists have all gone dead silent on the WikiLeaks founder they previously were smearing with relentless viciousness, because they no longer have an argument. The facts are all in, and yes, it turns out the US government is certainly and undeniably working to exploit legal loopholes to imprison a journalist for exposing its war crimes. That is happening, and there is no justifying it... More>>

Gail Duncan: Reframing Welfare Report

Michael Joseph Savage, the architect of the 1938 Social Security Act, wouldn’t recognise today’s Social Security Act as having anything to do with the kind, cooperative, caring society he envisioned 80 years ago. Instead society in 2020 has been reduced ... More>>

Gordon Campbell: On The Addiction To Chinese Student Fees

Last week, Australian PM Scott Morrison extended its ban on foreign visitors from or passing through from mainland China – including Chinese students - for a third week. New Zealand has dutifully followed suit, with our travel ban ... More>>

Gordon Campbell: On Coronavirus, And The Iowa Debacle

As Bloomberg says, the coronavirus shutdown is creating the world’s biggest work-from-home experiment. On the upside, the mortality rate with the current outbreak is lower than with SARS in 2003, but (for a number of reasons) the economic impact this time ... More>>

Gordon Campbell: On Dodging A Bullet Over The Transport Cost Over-Runs

As New Zealand gears up to begin its $6.8 billion programme of large scale roading projects all around the country, we should be aware of this morning’s sobering headlines from New South Wales, where the cost overruns on major transport projects ... More>>


  • PublicAddress
  • Pundit
  • Kiwiblog