From Motley Fool
24 Years Old, $2 Million in the Hole
So, have you heard the one about the 24-year-old “real estate investor” who’s $2 million in debt and still hasn’t gone back to his day job? No? Alas, you may never get the full story. Last week, a Californian named Casey Serin started a blog called “Iamfacingforclosure.com,” detailing how he got himself half a dozen sinking properties and $2 million in debt. By today, he’d pulled it off the Net, with good reason.
The quick version of the story is this. After taking some courses in real estate investing, this eager kid lied his way into a slew of loans he, admittedly, didn’t deserve, and now that he’s bleeding to the tune of $20,000 a month, and the housing market is crashing around his ears, he thought taking his story to the Web might somehow help.
A part of me still wonders whether or not this wasn’t just a somewhat elaborate hoax, but if it’s not, this kid is in deep trouble. Admitting to serial lying on loan applications might be enough to get forgiveness from our short-attention-span society, and it might get you a few “attaboys” from the easily impressed. But I doubt this kind of naive, public forthrightness will serve Casey so well should any of these lenders haul him into court for fraud.
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Moreover, unlike most amateur stock players, who are only gambling with cash on hand, the new real estate speculators depend on huge slugs of leverage. Lose everything on your pile of tech stocks, and you’re back to zero. Lose everything on leveraged real estate, and you move deep into negative territory. There’s nothing like owing $600,000 on a home that’s now worth $470,000 to make you wonder why they invented the option ARM, or the 40-year mortgage. You think it was to do you any favors?
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Let me break it down for you. If you’re a twentysomething out to make it big in the world, do yourself a favor and slow down. If you’re wearing flip-flops and low-riding jeans to closing, I’m talking to you. Real riches come over time, not overnight. You need to start with a clean financial house, make smart bets, and save your money sensibly.Twenty-four years old and $2 million in debt is no way to start your future. It’s amazing to me that anyone could ever think otherwise.
I unearthed his deleted blog pages from Google’s cache and posted them at the old site (bottom 4-5 posts) the other day:
http://www.blogger.com/comment.g?blogID=15532093&postID=115862774499708271
Some of the crazy stuff unearthed, was the financial statement the guy submitted to Freddie Mac:
Assets:
Checking Acct: $400
Savings: $1,150
Other Real Estate: $2,000,000
Google cache of this guy’s deleted site:
http://tinyurl.com/jpoml
Just keep clicking the “Cached” links in the Google results.
Isn’t it just amazing how someone could commit fraud, and then openly brag about it when things didn’t go their way.
The lenders lenders will not take these losses passively. They will foreclose, they will take title, and they will sue for any and all losses.
jb
While this guy represents an extreme example of “lending gone bad”, I would venture to guess that as this bubble plays itself out, we will see that lying on loan applications isn’t all that uncommon.
While this guy deserves jail time for the fraud he committed, let’s be honest here; he is just one link in the shady lending business. Over the last several years, as long as housing prices kept appreciating, origination fees kept rolling in and mortgage backed securities kept performing well, everyone was more than happy to look the other way as this kind of thing happened. A $20 background check could have revealed this guy wasn’t fit to take on the debt. It’s just that no one really cared.
I think we will see a replay of Enron. As long as Enron continually met quarterly earnings and made money for investors, everyone from employees, to auditors to investment bankers, to Wall Street analysts just chose not to ask too many questions.
This can’t be for real! To say that he’s another f@cked borrower is the understatement of the year.
This does raise an interesting question. To what extent will borrowers be sued/prosecuted for fraud on these “stated income” loans in the next couple of years? I’m willing to bet my next paycheck that he’s not the only one who has lied on a “liar loan” application.
“Dude, you’re going to jail”
Even funnier:
“Dude, you’re gettin’ a cell!”
@mike
your comment is quite funny and ironic at the same time.
What ever would Dean Wormer say?
“young, dumb and $2 million in debt is no way to go through life, son!”
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