How's this for a bailout?

RICO ACT, Jeff Grell, Racketeer Influenced and Corrupt Organizations, RICO, Attorney at Law: "Any person who succeeded in establishing a civil RICO claim would automatically receive judgment in the amount of three times their actual damages and would be awarded their costs and attorneys' fees. "

The RICO act, drawn up for use against the Mafia, applies in cases where a pattern of criminal activity involving a group or organization. The group can be as small as an agent, an appraiser, and a mortgage broker. The key is the pattern of criminal activity. If an unholy triad of real estate professionals engages in a pattern of repeated sales involving the use of fraud - typically, defrauding the mortgage company - it could fall under RICO statutes.

A RAPID RISE: "With three months' experience, the agent who had never listed a home closed her first sale Jan. 27 in a working-class neighborhood. Her buyer paid $45,000 more than the asking price. It stunned her peers." ... "Some of the money wasn't going to the sellers. It was going to a third party with ties to Molen, sometimes without the knowledge of the lenders or the sellers. Federal and state laws require full disclosure to lenders detailing where the money goes."

Mortgage fraud. Mail fraud. Tax fraud. Wire fraud. Violation of professional ethics. What did I leave out?

What does this have to do with a bailout? Treble damages. We know - the press is beginning to report on it, but bloggers have been highlighting fraud cases and fraud rings for years - that there was a lot of fraud in this market. We know that there were agents who would handle these deals, appraisers that would "meet the numbers", mortgage brokers who would, at best, look the other way, and at worst, falsify the numbers on the mortgage app. And we know people were hurt by all of this. Lots of people.

The people who were damaged were the buyers who used those homes as comps, the owners who spent more than they otherwise would have spent on remodeling, the neighbors now suffering with multiple abandoned homes in their neighborhoods, attracting vagrants, mischievous children, and sometimes worse. With the possibility of treble damages, homeowners should be pushing for prosecution of these crimes, and looking for lawyers who will file the RICO claim.

This is a more fair, equitable, reasonable kind of "bailout". People who were truly harmed - innocent buyers and homeowners - already have a path to recovery. There is no need for a new government bureaucracy handing out cash - the government is so good at giving cash ONLY to the deserving, after all - the mechanisms for recovery are already in place. Use them.

If you're an affected homeowner, how do you know if a sale was fraudulent? It's usually fairly simple - it's the sale everyone in the neighborhood was commenting on, saying "can you believe it?" But here's a site that shows some forensic appraisal cases, with the data used sniff out the fraud. You have to click the links and review the evidence yourself to really grasp the case being laid out, but it's an interesting read and worth the extra effort:

Aug Forensic Appraisal Blog: "Jumpin' Jim Beauprez It just gets curious-er and curious-er. I originally published this item April 13th, 2006. 2 other mortgage fraud transactions involving Jim Beauprez are reported here and here. As per MLS, this property sold in December, 2005. Denver Assessor's Office confirmed the sale and identified the buyer as James Beauprez and the lender as Lehman Brothers. I am now convinced that James Beauprez is the son of Bob Beauprez, United States Congressman and now the Republican candidate for Governor of Colorado."