Wednesday, April 23, 2008
Smoke & mirrors
Most of the ads on radio in this area are for mortgage companies, breathlessly exhorting new customers to take advantage of the artificially low interest rates set by the Fed. I've been wondering how such companies expect to make any profit in the long run, because despite the fradulent "core inflation" numbers, real inflation is several points above the price-controlled mortgage rate. A fixed 5% mortgage when inflation is 10% is a good deal for the customer but a guaranteed loss for the lender. I've guessed that the companies are really counting on a quick repo or some other fancy trick, some kind of smoke and mirrors involving 'securitization'.
Turns out that the smoke and mirrors may be quite literal. A Seattle mortgage company has been loaning to customers with fake documents, and then making its money from a cut of the marijuana-growing operations that the customers establish in their low-interest houses.
Full story here. ¶ 5:47 PM
Turns out that the smoke and mirrors may be quite literal. A Seattle mortgage company has been loaning to customers with fake documents, and then making its money from a cut of the marijuana-growing operations that the customers establish in their low-interest houses.
According to court documents, Scitek Garden Supply was connected to grows of more than 14,500 plants, and more than $1.1 million in cash was laundered through the business.
Greenhouse & Garden Supply and its owner are alleged to have provided equipment, advice and trash disposal service to those setting up indoor marijuana grows.
Jet City Mortgage of Kent, as well as the home of the company owners, were also searched in connection with possible mortgage fraud related to the homes where marijuana grows have been discovered. Nineteen homes where grow operations were discovered were purchased through the business.
Full story here. ¶ 5:47 PM
