How an ordinary town became one of the home foreclosure capitals of America

FT Magazine has the story Welcome to Bakersfield, California: How an ordinary town became one of the home foreclosure capitals of America.

It is difficult to find an excerpt that gives you the flavor of the article, but here is my attempt.

Crisp & Cole began paying straw buyers up to $20,000 each so they would pose as home buyers on loan application documents, federal prosecutors say. The properties were then flipped from “owner” to “owner”, generating fees for the firm and profits for people with pieces of the deals. “What we found is that local people with knowledge of how the system worked were taking advantage,” says Kirk Sherriff, an assistant US attorney in Fresno, California, where the case is being prosecuted.

I hope that those who still think that Barney Frank, Freddie Mac, Fannie Mae, and home ownership promoting politicians created the great financial collapse will read articles like this.  They will see examples of how the crisis was really started.  This is not to say that the people mentioned in the first sentence of this paragraph might have been more aware of what was going on and should have tried harder to stop it.  Of course, with deregulation fever affecting almost everyone, they might have known that they couldn’t get any enforcement actions to stop these frauds.

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