While watching tv last night and flipping channels as I usually do I came across a story on ABC that peeked my interest.
As our market is changing from a sellers market to a buyers market I couldn't help but watch the program as they were talking about the many failed loans and people who are in serious trouble when it comes to their real estate holdings. The story was about a young man, 24, who tried to become a "real estate mogul" in the buying and flipping world of real estate.
At one point this young man was $2.2 million..YES I SAID MILLION...dollars in debt from buying properties...some sight unseen. He did this mostly WITHOUT even having a job to pay for his purchases. Several of his homes went into foreclosure and some sold.
He kept making the remark that he was using "stated income loans" (help me out with this one mortgage gurus) which I have not heard of in my area. I can't see this EVER being a good idea for a lender unless they too want to get in the business of owning and selling real estate. Basically from what I gathered he was able to "state" what he made for a year's income without ever having to produce and financial documentation and he openly said he was lying when he did this so that he could get the loans needed. Not only that...he was financing these properties at 100% and getting money back at closing! AMAZING!
This is part of the reason that the mortgage companies are being scrutinized so much lately.
This is an interesting story and if you want to read it you need to hurry...he has announced that he is closing his blog within 6 days to GET A REAL JOB! Why did he have a time frame you ask? To make sure his ADVERTISERS got their monies worth....so he did have some income.
So go and read....I think you will find some of this interesting.
http://www.iamfacingforeclosure.com/
Here is the story from ABC
http://www.abcnews.go.com/Nightline/Story?id=3030705&page=4
Here is a spoof picture someone did of him:
