Monday, May 19, 2008

Scenes From the Mortgage Crisis, Part Next

The Oregonian finds a development company that apparently swindled lenders, suppliers, contractors and its own employees.
"Banks lined up to back newly minted companies. They made huge loans to workers of limited means who couldn't afford the payments.
At Desert Sun, five ex-employees told The Oregonian their incomes were inflated or their signatures forged on loan applications or other financing documents.
Now that some of those loans have defaulted, banks are going after some of the employees with foreclosure threats. But in many of the Desert Sun transactions, there is no house to repossess -- only land worth a fraction of what is owed.
"I owe $290,000 for a piece of land that is probably worth $70,000," said Casey Cross, a former Desert Sun electrician who owns an empty lot in Sisters. "I'm one of the lucky ones. It's just me and my dog. There are good people with families just getting crushed." "
Hat Tip to Calculated Risk.
And like a joke, the story ends with the punchline:

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