I did some thinking and realized that I’m getting side-tracked.

My original goal was to:

1) Write about my experience facing foreclosure and how I am dealing with it

and…

2) Help Over-Extended Borrowers – tips on how to stop foreclosure, save the home or sell it fast, decide when to file bankruptcy, getting out of debt, credit repair, and getting back on their feet.

This last week I got carried away to EXPOSING:

Shady Loans, Exposing the Real Estate Gurus, Exposing the Shady Real Estate Industry, and Going to Jail For Mortgage Fraud!

Where did all that come from?? How did I get so sidetracked? Here is how the events unfolded:

September 5th, 2006: In the beginning.

I launched IamFacingForeclosure blog with my properties for sale and I write my first blog post Why I am Facing Foreclosure

In that first post I talk about how I got over-extended as a real estate investor and happen to mention stated income loans (known as “liar loan” in the industry) and other potentially controversial stuff.

September 20th-23rd, 2006: Negative Exposure

I gets picked up by several blogs and websites, mostly the “housing bubble” variety like HousingPanic, HousingBubbleCasualty, and others.

See who linked to me via Technorati, Icerocket, MSN, Yahoo and Google

(You can also search for “Casey Serin” to see what’s been happening on the web.)

While some people were positive in their remarks, the MAJORITY were negative and brutal. See for yourself and read the comments for any entries in September.

Keep in mind… I am not hating on the Bubble Blogs… negative exposure is NOT necessarily bad. I was able to get lots of constructive criticism and advice out of it. Plus my properties got extra exposure and that’s always good.

Why so Negative?

I think people were negative because:

1. Many (not all) people reading “Bubble Blogs” are negative to begin with.
2. Me calling the loan “liar loan” made it seem REALLY bad.
3. Some people DO NOT realize that these loans are pretty typical in the industry.
4. It is controversial to be this honest about my situation.
5. Many people think “flippers” and “speculators” are responsible for the real estate bubble – that’s debatable.
6. Many think I am a bad person for investing because I am just greedy and want quick riches.
7. People are bitter about sky-rocketing housing prices and need to blame somebody!.

Feeding on Controversy

Seeing all the negative comments and people I realized that my blog is pretty controversial. So I decided to continue with my “honesty” . I started leaning toward more controversial topics and then went over the top talking about Jail and Mortgage Fraud.

Bubble Blogs LOVED IT!

I liked the extra traffic too. The PROBLEM is that I started getting away from my original mission: getting out of foreclosure and writing about it to help others. Instead I started talking about shady loans, etc.

How “Illegal” is it REALLY?

When I mentioned the way I did my loans, I didn’t think much of it. I was just being open and honest and shared everything I did – hoping it will help somebody. Yes, on these loans I was misrepresenting things like income, cash at closing and owner-occupied issue.

But if you know anything about the state of today’s lending industry you will agree that what I did is nothing out of the ordinary.

For more information, see this News Article on Liar Loans or just watch the Liar Loan video. (Now compare to this Wall Street Journal article on the Real Mortgage Fraud).

While, I personaly have always had MORAL issues with these loans, the reality is that Liar Loans are pretty normal.

Consider this:

1. Seems like, everybody is doing it – just ask your mortgage broker! (Hey, I know this follow-the-herd mentality is not a good excuse for me… but nevertheless)
2. Lenders/banks allow it and turn a “blind eye” to it.
3. The account executives at the banks actually tell the mortgage brokers how to “sugar coat” the application.
4. Lenders make a killing on EXTRA INTEREST and fees for stated income loans – you pay to lie.
5. Lenders package their loans and sell to mutual funds on wall street. The extra default rate on LIAR LOANS has been pre-calculated. The extra risk is accounted-for in most cases.

For those who are still judging me, I will just say this (and forgive me if I’m stretching it):

How many of YOU have “stolen” a music CD or software program by burning a copy of it? Did you NOT know that it’s ILLEGAL?

Look into the copyright law. As far as I know, burning a copy of a CD and giving it to a friend is AGAINST THE LAW – even if you are NOT selling it for a profit. Most people don’t realize that that.

Shall we throw half the population in jail?

Perhaps we need to address the issue of WHY this “liar loans” are so common. We need to investigate what caused such relaxed loan practices. We need to see why there is no enforcement of guidelines. Maybe, we need to change the entire industry… or maybe there is nothing wrong with it. I don’t know.

The bottom line is…

1) I didn’t go too far with my loans (As in Criminal Activity). It’s more the gray area type of stuff. True, I always felt a little uncomfortable with it. My moral compass didn’t like it, so to be on the safe side, I will probably stay away from this type of stuff in the future.

2) I am NOT a WHISTLE-BLOWER. I am NOT an expert on mortgage fraud, nor do I want to be. I have no expertise or credibility to EXPOSE anybody. I do not want to judge or blame anybody.

3) I just want to survive and HELP other over-extended borrowers! I am learning how to stop foreclosure, sell my houses quick, get out of debt, dealing with bankruptcy, etc. As I learn how to get saved and survive I want to help others do the same.

What do you think?