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| User Info | A potential (partial) solution to falling tax revenues in forum [Ticker] | |||
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Genesis Posts: 71432 Incept: 2007-06-26 
KD^2 
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http://market-ticker.denninger.net/2008/....
---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2008-04-06 13:55:43
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Shoobedoowa Posts: 1321 Incept: 2007-06-27 
Western Canada
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This is exactly what I have been saying is one of the simplest flags to check. Loan application alongside tax submission. Both have been signed by the subject. If there is a mismatch, release the hounds. It's either fraud or tax evasion. Last modified:
2008-04-06 14:39:26 by shoobedoowa
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Gt80 Posts: 218 Incept: 2008-01-20
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Karl- the thought of the proposed mortgage bailout by Frank, et. al is sickening particularly in light of the high number of cash outs and no equity loans that were done. In any event, the number one condition for any homeowner availing themselves of a govt. mortgage bailout ought to be that the original loan was free of fraud and the burden of proving this should be on the borrower. Otherwise, the bailout loan will be directly rewarding the thief for a second time. (By the way, what is your guess as to the percentage of bailout mortgages that go into default?) Also, the criminal penalties for mortgage fraud should be increased dramatically prior to the implementation of any bailout program- -with mandatory jail time and this should be heavily advertised. If the crooks know they are going to get nailed when they come back in for the refi using the bailout program, a whole lot less are going to be signing up for it.
2008-04-06 15:40:09
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Blackswan Posts: 3602 Incept: 2007-11-06
Ponzi Roller Coaster
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QUOTE We can call it "The Deficit Reduction Act of 2008. I think the other name for this could be the Leach**** Elimination Act of 2008 or more popularly known as the LEA. ---------- Last modified:
2008-04-06 15:58:11 by blackswan
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Micronin127 Posts: 607 Incept: 2008-01-21
Swampscott, MA
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I have always wondered why there ever needed to be stated income or stated asset product in the first place. Providing two years of tax returns is not onerous to the person applying for a loan. Purchasing a home should be the largest single investment most people ever make. It's really a wash in terms of labor, though many banks touted the no-doc programs as incredible cost savers due to streamlining. Plugging values for income into a piece of underwriting software taken from real tax returns rather than from an application form seems roughly equivalent. I never understood either why people couldn't prove their income easily given the need to report it every year to the government. If a person's income had just increased substantially, they should have more recent pay stubs, or they can wait some portion of a year until they file another return. The products should simply be illegal. Underwriting standards should be codified to require at least a 10% down payment, preferably 20% and the DTI back end ratio should not exceed 36% of verifiable income using tax returns. This would be useful regulation. The FHA would still offer 97% financing to school teachers, police, firemen, etc... for modest homes in the communities they live in and serve. Your idea is great to go after the fraud and tax evaders.
2008-04-06 15:57:24
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Stevematulis Posts: 1403 Incept: 2008-01-08
Republic of Texas
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brilliant, simply brilliant.Quote:
small correction: "you and I" should be "you and me". good grammar looks better when you send it to Presidential candidates and Congressmen/women.. -grammar nazi matulis Last modified:
2008-04-06 21:02:33 by stevematulis
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Sandor Posts: 1002 Incept: 2007-08-08
Deltaville,Virginia Online
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I have no problem with banks doing any kind of mortgage as long the risk is properly disclosed to shareholders, and they maintain proper reserves. The problem here is that banks sold these loans as AAA debt instruments, which they were obviously not. And this is the problem. They lied. Why go after the ****ing homeowner? The crooked ass bankers that did not properly disclose the risk are the ones that should be getting nightly visits from bubba right now. What the hell, they already earned their bonuses, and the politicians are clamoring for a bailout. I have paid a staggering amount of taxes in the last 20 years (single male, no kids, no bills), and do not like the cheats either. But this witch hunt is not the answer. ****, I have to cut a Federal and State check this year, and they are not small either. The bankers that created the **** sandwiches and lied about risk are the ones that should be hanging, but I have not seen one ****ing indictment yet.
2008-04-06 16:26:19
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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I say we hang all of 'em. Look, if you lied on a "Stated" product you committed a federal offense ok? Since we don't seem to be interested in that, how about we get the tax revenues? ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2008-04-06 16:31:29
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Drhooves Posts: 181 Incept: 2008-01-09
Central IL
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"The Deficit Reduction Act of 2008." Agree 100%. Would love to see a clause where if proven the tax payer and the mortgage holder lied on one or both forms, that they be held liable for the taxes, and given the opportunity to pay off via installments. Let the leeches pay the higher tax rates. Sandor - I too have a paid a ton of taxes the last 25 years, am single, no kids, and no bills, and this is EXACTLY the kind of "witch hunt" we need. It's called personal accountability. And, as KD points out, we should then go after the bankers too. ---------- "Hyperinflation? Show me the math!" -- Gen
2008-04-06 16:45:27
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Sandor Posts: 1002 Incept: 2007-08-08
Deltaville,Virginia Online
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Karl, There are no tax revenues to be had. Your not going to extract any meaningful sum from a hairdresser that "qualified" for a 500K home on stated income with a credit score in the 600's. Sure, that person may have committed a Federal offense, but I can assure you, the amount of tax revenue spent incarcerating her (and all like them) will far exceed any amount recovered by the IRS. The failure by the banks to perform any kind of due diligence on these loans, to sell/hold these loans as AAA, to hide them in off balance sheet vehicles, constitutes the felony here. Good grief, our government is loaning out billions and won't even tell us who they are loaning the money to. Its our ****ing money!
2008-04-06 17:02:16
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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Oh no, that's not the person I'm interested in the IRS finding. That person is the guy who claimed $200,000 in income and really did make it, but only reported $50,000 to the IRS. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2008-04-06 17:08:11
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Sandor Posts: 1002 Incept: 2007-08-08
Deltaville,Virginia Online
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Did the loan officer suggest the client made 200k or the person claim to have made 200k? Imagine the legal bills piling up on that one. Karl, you have not seen a loan officer in quite some time. No-doc loans have been available for 20 years, and you paid an interest rate indicative of that risk. And the people that held that risk were compensated as well.
2008-04-06 17:13:38
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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No-Doc/No-Ratio loans are not the same thing as STATED INCOME. If you say "I ain't telling you" and get the loan, ok. But if you say "I make $200,000", you better, and since you applied for a mortgage under penalty of law with that data, the IRS is perfectly within its rights to rely on that declaration. That doens't mean you can't have adjustements to that $200k gross (since you were asked for pretax gross income) but you better in fact show $200,000 as pretax gross income. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me Last modified:
2008-04-06 18:15:39 by genesis
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Sandor Posts: 1002 Incept: 2007-08-08
Deltaville,Virginia Online
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Mr Federal Investigator, I told the loan officer I "hoped" to make 200k this year. Are you going to throw me into jail for "hoping"? I "stated" that I hoped to make 200k. Sorry. I get 3 free meals a day, right? Free clothes, right? A TV in my cell, right? Excercise time, right? ........ Karl, your an intelligent man, thats why I read your postings everyday. As a business owner, you know that any plan you put forth must be implementable. This latest endeavor wreaks of the shotgun approach, and is not realistic. My fury is directed at the Ivy League MBA that intentionally misrepresented AAA securities as such, knowing damn well they were for the intention of "hitting the number" and collecting the ensuing bonus check. How many on fixed income were counting on those AAA securities to pay the bills? I understand your anguish, but please direct your very talented efforts towards obtainable results. To quote Dr. Phil (ugh) - "Get Real" Last modified:
2008-04-06 18:33:09 by sandor
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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Oh I think its very obtainable... as gov revs fall thryre gonna look for anything they can get....
---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2008-04-06 18:54:50
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Sandor Posts: 1002 Incept: 2007-08-08
Deltaville,Virginia Online
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Ruby Ridge Go get it. Last modified:
2008-04-06 19:31:09 by sandor
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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Hahahaha. Good luck with that... there probably aint 100 prople in this country that would shoot. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2008-04-06 19:31:50
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Sandor Posts: 1002 Incept: 2007-08-08
Deltaville,Virginia Online
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I think you are underestimating the potential. How many people commit murder with guns every year in the United States? Take that number, square it, then cube it.
2008-04-06 20:04:37
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Pharmaman Posts: 3 Incept: 2008-02-20 salt lake city
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I for one am glad you did this. A friend of mine did exactly what you are talking about and it ****es me off. I hate the fact that he has cheated the system. I don't know what he makes but he implied that he doesn't need any additional deductions for his tax situation even though he lives a pretty luxurious life. He just built a nice big fancy house last year and he told me that he had to jump through a lot of hoops to set up his "stated income" so he could get the building loan because his W2 would not be accepted. I hope these people get burned bad, friend or no friend.
2008-04-06 20:22:02
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Sandor Posts: 1002 Incept: 2007-08-08
Deltaville,Virginia Online
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Pharmaman, your post makes no sense. How did he cheat? "I don't know what he makes" or "implied". His W2 "would not be accepted". Conjecture? The "fact" he cheated. You have no facts. Come on. You are green with envy and its written all over your post. He's your friend and you hope he gets burned? Glad your not my friend. Last modified:
2008-04-06 20:40:05 by sandor
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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Sandor we couldn't even get two thousand SIGNATURES on a petition to fix this. NONE of the petitions broke 2,000. People willing to pick up a gun? Forget it. You need 10% of the population to "win" such an uprising. That's 30 million people. You're ****ing dreaming; America will go to the gas chambers first. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2008-04-06 20:55:56
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Sandor Posts: 1002 Incept: 2007-08-08
Deltaville,Virginia Online
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Karl, IF the lights go out, IF there is no gas at the pumps, and IF there is no food on the shelves, then all bets are off. My father filled me in what happens what the above scenario unfolds. It is not pretty, and the most reasonable turn into the most irrational. IF the IRS starts showing up to millions of households looking for the poor **** that cheated on a mortgage application, and the above scenario is unfolding, then I stand by my hypothesis. You KNOW its possible. And the possibility is increasing every day. So no, I am not ****ing dreaming.
2008-04-06 21:27:52
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Pharmaman Posts: 3 Incept: 2008-02-20 salt lake city
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Sandor, He cheats the system by hiding his income from the government. The fact that he cannot use his tax return to get a loan signifies that something fishy is going on. I don't know how this is done exactly but when you have someone who lives a luxurious life without paying very much tax, I call that cheating. If these guys don't pay tax, then it is the rest of us who are footing the bill. This is not about envy, I don't have a problem in paying taxes and I don't have any desire to find a way to cheat the system. I don't always like what the government is spending money on (that is another subject), but we all have to be in it together if we are to have a civilized and fair society. As far as friends go, I am kind of moralist in that I find it almost impossible do something that I know is wrong. I want him to learn a lesson, not have his life ruined. I have no problem with a friend being caught doing something wrong if he needs a wake up call. He is still a friend.
2008-04-06 21:48:38
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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Well not necessarily. I went several years without paying a dime in taxes and I lived quite nicely. How? I owned a ****load of tax-free munis and lived off the coupon. BUT - that interest income (even though its tax free!) is still on my 1040! I still have to file, and the income is still reported, and its still there on my tax return. Even though my "AGI" was zero, I still had the income and still reported it, and so did my brokerage. Fact is, there's no legitimate reason for a "Stated Income" loan. None. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2008-04-06 22:02:00
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Stcm Posts: 1357 Incept: 2008-02-05 
Online
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KD, you hit a nerve. Yes, Yes, Yes. A lot of people much richer than I am have given me advice on how to cheat on taxes. In 2000, as an employee of a successful software company, I made pretty good of money on stock options. My accountant said that if I didn't declare the capital gains, it was very unlikely that the IRS would ever find out. But I wouldn't be able to live with myself if I cheated. It was so much simpler to just pay the taxes - I made more in that one year with than the past 5 - felt grateful to be in a free enterprise economy that rewarded innovation. But after what's gone on, I'm thinking differently. The taxpayer bailout of BSC really disturbs me, along with many other things that are being funded without being voted upon. OTOH, It makes no sense to put people who lied about income in jail. For one reason, now they can't work and make income. I really like the idea of auditing them. Those who had no money and were seduced into bad loans - maybe they can get some forbearance on rates if they are trying to pay their mortgage. The flippers -which I suspect are over 50% of the subprimes - deserve IRS inspection - if they have to sell their foreign sports car collection to pay the taxes on their income - so be it. ---------- Short-Term Capital Mismanagement - "When genius was never there to begin with!"
2008-04-06 22:07:29
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