I got the Media Advisory from the DFL: DFL Chair to Discuss Irregularities in GOP Gubernatorial Candidate Tom Emmer’s Finances. I figured it had to do with Emmer’s campaign finances, so I figured I’d attend. After all, GOPers are notorious for their finances; for instance, take a look at The Tostenson Memo pointing out highly irregular and exceedingly questionable “reporting” – and after all, the now-GOP State Chair was then- GOP State Treasurer: FEC Tony.

So I figured this was just gonna be another case of a GOPer campaign demonstrating, once again, that old adage: “Numbers Don’t Lie (but Republicans use numbers)”.

Especially with Emmer’s… well, how shall I say this? OK, I’ll say this: with Emmer’s documented aversion to telling the truth on the campaign trail.

So, I was a little surprised when I got there and the topic o’ the presser wasn’t Emmer’s “campaign” finances, but his “personal” finances – specifically, according to the media handout, “Tom Emmer’s Mortgage History” (image below the fold).

And I got a background in real estate; as does a family member. And when I saw that handout, I immediately thought:

LIAR LOANS!!!

If you don’t know what “Liar Loans” are, google it (or, just click on the previous link).

Now, I’m not sayin’ Emmer did “Liar Loans” personally; what I’m saying is that those 7 mortgages in 8 years (on just one property) listed by the “Prepared by the Minnesota DFL Party. Printed in house. Labor donated.” handout sure raises the ol’ red flag up the flagpole!

And DFL Chair Melendez didn’t “say” Emmer was doin’ the ol’ Liar Loan Shuffle; Melendez was simply saying Emmer needs to come clean about his mortgage financing record.

IMNSHO, I agree. An appraiser pal did some quick research into some easy-to-understand background on Liar Loans for me – and for you, the Gentle Reader! Let’s look!!!

From Slate.com, good description of liar loans in the marketplace:

Inside the Liar’s Loan
How the mortgage industry nurtured deceit.
By Mark Gimein
Posted Thursday, April 24, 2008
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The term is mortgage-industry slang for what’s more formally called a “stated income” mortgage—a mortgage that a lender gives without checking tax returns, employment history, or pretty much anything else. Many of the loans that are in trouble now, or will be in trouble soon, fall into this category. But the term gives only the barest hint of the pervasive failure involved.

The original idea of the stated income mortgage was that it would benefit salespeople who work on commission, people who own their own businesses, and others for whom predicting next year’s income isn’t just a matter of looking at last year’s.

At the height of the mortgage boom, however, especially in pricey markets, the liar’s loan became a routine way of doing business; for some lenders—both smaller ones like IndyMac and WMC as well as big ones like Countrywide and Washington Mutual—it was the main way. In 2006 in some parts of the country, these loans made up as much as half of new mortgages, for both subprime borrowers and for homebuyers with high credit scores.

From 2005, RealtyTimes.com, before the fraudfest became widely known:

New Report: Housing Boom Stimulating Mortgage Application Fraud Boom
by Kenneth R. Harney

The national housing boom is producing a companion boom — one that you don’t read about as much: Dishonesty and outright fraud by home buyers and mortgage and realty industry professionals on loan applications has exploded in the past two years.

A newly-released national study by a research group says fraud-related cases on mortgage applications reported to the FBI more than doubled between 2003 and 2004.

The Mortgage Asset Research Institute (MARI), which pools fraud information supplied by hundreds of mortgage lenders, says loan fraud is worst in Georgia, South Carolina, Florida, Utah and North Carolina. Individual cities with high fraud rates — based on “serious early delinquencies” on home loans closed during 2004 — include Atlanta, Dallas, Denver, Orlando, Charlotte, Memphis and Scranton.

From PBS.org – and this one should just make you plain sick because it is completely dead-on:

April 3, 2009

The financial industry brought the economy to its knees, but how did they get away with it? With the nation wondering how to hold the bankers accountable, Bill Moyers sits down with William K. Black, the former senior regulator who cracked down on banks during the savings and loan crisis of the 1980s. Black offers his analysis of what went wrong and his critique of the bailout.

Now, this type of fraud – “Liar Loans” – isn’t new; Appraisers have been trying – TRYING – to raise Holy (Heck) about it for a long, Long, LONG time. For instance, here’s a petition started by Appraisers back in December, Y2K:

“The ASC’s mission is to ensure that real estate appraisers, who perform appraisals in real estate transactions that could expose the United States government to financial loss, are sufficiently trained and tested to assure competency and independent judgment according to uniform high professional standards and ethics.” From the ASC website.

The concern of this petition has to do with our “independent judgment” in performing real estate appraisals. We, the undersigned, represent a large number of licensed and certified real estate appraisers in the United States, who seek your assistance in solving a problem facing us on a daily basis. Lenders (meaning any and all of the following: banks, savings and loans, mortgage brokers, credit unions and loan officers in general; not to mention real estate agents) have individuals within their ranks, who, as a normal course of business, apply pressure on appraisers to hit or exceed a predetermined value

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Now, again – I’m NOT sayin’ Tom Emmer was involved in Liar Loans; I am – AM – saying Melendez is correct: it’s time Emmer opened up his finances; the same way the State GOP demanded an accounting from Horner:

“In the face of mounting public pressure, Tom Horner has dug in his heels by repeatedly refusing to release his client list,” read a MN GOP statement. “Horner likes to talk about having ‘honest conversations’ with Minnesotans, but he won’t be honest with them about how he’s lined his pockets over the years with special interest money. It’s past time for Horner to come clean and release his client list.” (MinnesotaIndependent.com)

Take the above and take a look at the following list (prepared by the DFL) and it’s clear:

Tom Emmer, you got some ‘splainin’ to do!

Especially considering FEC Tony’s recent quote in story in MinnPost:

“This gets to a core issue. You can’t hold yourself to a different standard than you hold everyone else.” — MN GOP Chair Tony Sutton

(cross posted from MnProgresiveProject.com; comments welcome there)

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