Saturday, November 11, 2006

Is this the cause of rising real estate prices?

I have a suspicion that we will be hearing a lot more stories like this as the real estate bubble deflates. From the story:

A federal indictment unsealed Thursday accuses home buyers, real estate sales people and a mortgage broker — seven people in all — of wire fraud, money laundering and other offenses in attempts to defraud lenders in buying homes in Edmond's upscale Oak Tree addition.

The seven committed fraud by "artificially inflating the sales prices of homes and submitting false loan applications," the indictment alleges. "Each of the defendants intended to personally profit by funneling substantial sums of money back to themselves and others from the excess sales proceeds under the guise of remodeling, repair costs or marketing service fees."

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