Don't Buy A House Where There Are Multiple Offers-A Real Bank Manipulation

Multiple Offers Could Be a Ponzi Scam

I live in Reno, NV. I have delved into the underbelly of the ponzi real estate market here. This real estate market was the victim of the massive ponzi lending bubble that ended with the credit crisis crash in late 2008/early 2009. Of course with new revelations about questioning the future of the 30 year mortgage, we have a much more problematic real estate decision making process as to the prudence of even taking on a mortgage. The following discussion will show why I believe you don't want to buy a house where there are multiple offers. This could be a ponzi scam.

With regard to the attempted continuation of the ponzi RE scam, I have found that the lowest priced houses, bargains if you will, all have multiple offers attached to them. That means that these houses, seemingly innocently advertised in all the real estate magazines, are actually off limits to the average buyer!

The fact that multiple offers can be made and taken off a property and placed upon another property means that these offers are bogus. While that may not be the case always, you have no idea because you have no access to knowledge regarding who you are bidding against! It is very possible that many of these offers do not exist at all. You could end up bidding against a ghost, with banks and realtors being involved in these scams, at your expense. You have to wonder why people are so hesitant to take out mortgages these days.

Recently, some states are trying to manipulate the housing markets by law. At the time of this writing I don't know how this effort will turn out but read this from my blog:

"Listen up homebuyers, these four states, Nevada, Maryland, Missouri and Illinois are considering laws to eliminate distressed sales from appraisals in determining house values. This is just plain fraud, and house buyers will either get screwed by this law or they will boycott housing. It is time to boycott mortgages and the TBTF banks anyway, but if you are going to buy, keep an eye out on these laws which are just legalized fraud and a scam against buyers. These states need to wake up and quit thinking they are Bernanke and quit tinkering with the markets! Eliminating true price discovery is criminal. But I guess that is what politicians and banksters do these days. Don't buy anything because it is all manipulated!"

And will these little scams pave the way for easy money lending once again? If prices are inflated will easy money loans make the banksters rich? Our leaders are fools. While there could be another bubble, it can't be as massive as the last one in housing because of fear. People are afraid. Unless people are too young to remember, it is tough to blow these kind of bubbles quickly even if the banksters and the Fed want them.

Certainly, with loan guarantees for all mortgages, as Wells Fargo, the IMF and Bernanke want, there could be another bubble, and that is clearly the goal of securitization. The models using securitization, originate to distribute loans, and the "risk management" of off balance sheet hiding of toxic loans were bogus from the start. Don't forget that. It is bogus to hide loans and then call it "risk management". The banksters knew that Enron and others failed for that very reason, yet they went ahead with the plan to establish this bubble certain to fail two full years after Enron failed! For more please get ahold of my popular Ebook, Ponzi Housing Scheme 21st Century on Amazon.

Until these multiple offer scams go away, which may be never, there are some ways to get around the fraud. Here are a few:

1. Do not play the game, and bid only on a house with no competition. This is the safest way to avoid being burned.

2. Buy under your means. If that means buying a condo or a manufactured home, instead of a freestanding house, then do it. You will be happier not being shoehorned into a budget that is difficult for you to maintain.

3. Pay cash if you can. If you can't, and you live in a nice rental, then rent and invest the difference between the amount you pay for rent and what you would have to pay to buy.

4. Don't trust anyone in the financial community. Never has fraud been more rampant and more uncovered and proven!

5. Do not, I repeat, do not become emotionally involved in the house you are purchasing. It is shelter, and nothing more. Fall in love with it after it is yours. Not before.

6. Stick with your original offer and do not bid with anyone.

7. If you are not allowed to purchase a house that later gets sold for less in a short sale, report the realtor to the police. This is a scam. Not that the banks don't deserve a little of their own medicine but this makes it impossible for you to get the home you want and interferes with fair commerce.

Sounds Like a Bunch of Hype to Me.

A Lesson From Philip Davis of Seeking Alpha

While I have contributed a few articles to Seeking Alpha, clearly the great intellect of others is something I gain from. We all need to be smarter. Anyone interested in real estate should read this from Phil Davis, a very astute observer of markets:

The landowners play a long game since they start the game with money and can afford to be patient (like poker). They keep available land scarce and drive up the prices, and they drive up demand by lending money (to buy their own properties) until the value reaches a point at which they begin to dump land on the open market, which then decreases the price and drives the borrowers to default. At the same time they stop lending money, meaning no new buyers will come on the market at which point the peasants who need to sell their land are totally screwed and are forced to lose substantial amounts - often their life savings - in order to get out of the constant debt burden of home ownership. Once the properties crash back to very low levels, the Barons (who still won’t lend to others to keep out competition) begin to confiscate what properties they can and buy back the rest. Once they have their land back - they begin the cycle again. Isn’t capitalism great?!?

My concern about this Debeers type of market control is that it isn't diamonds we are talking about, but shelter, a basic human need. lt is immoral for big banks to hurt the average consumer with ponzi housing, causing defaults, then steal from the government and taxpayers so that they can be solvent enough to foreclose on everyone, and get the property back for free. Their only fear is the value of the property after they obtain it back. And so this is why these banks have been stalling and allowing folks to live rent free.

As prices stabilize (although we may face another downturn) the banks will start massively foreclosing and getting their property back that was just lent to unsuspecting mortgage borrowers who never really owned the property and are ruined. Kind of makes you sick to your stomach as we think of people like Jamie Dimon being so cutthroat and being so deserving of jail. Boycott the 30 year mortgage. Don't play the game!

Cramer wants you to overpay for real estate. That is why he called a real estate bottom in June 2009.
Cramer wants you to overpay for real estate. That is why he called a real estate bottom in June 2009.

Possible Evidence of Multiple Offer Real Estate Scam in Conjunction with Banks

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Comments 16 comments

Sandyspider profile image

Sandyspider 6 years ago from Wisconsin, USA

Great advice.

bgamall profile image

bgamall 6 years ago from Las Vegas, Nevada Author

Hi Sandy. It is so easy to get caught up in the emotion of house buying.

Hello, hello, profile image

Hello, hello, 6 years ago from London, UK

Great hub and very good advice. Thank you.

bgamall profile image

bgamall 6 years ago from Las Vegas, Nevada Author

We need to get smarter, Hello, as to the evil games big bankers are capable of playing.

TheMoneyGuy profile image

TheMoneyGuy 6 years ago from Pyote, TX

bgamall profile image

bgamall 6 years ago from Las Vegas, Nevada Author

Ha Moneyguy. I am flattered. It is interesting that the banks feel they are strong enough to start swallowing up the houses that they have allowed to languish. Now they mean business and want that property back. It is not much of a risk if the US government will probably bail them out again if prices go down again, which could happen in many areas.

Tom Jamison 6 years ago from Orlando FL

Excellent advice. Let me expand on your item number 2. Everyone in the community (banks, realtors, peers, etc.) want you to buy just a wee bit more than you can "afford", based on their formulas - monthly housing about 33 to 35% of gross income. This is insanity and a recipe to enrich them at your expense. They say don't worry, your income will go up and the value of the property will go up. That sort of worked in the bubble as long as you got out ahead of it bursting. The guideline used to be only 25% to 27%, but they kept pushing it up. Now, HAMP will "help" you get back to 31%. This is still way too high. Do not get yourself into a situation where your monthly housing cost is more than 15% to 18% of monthly income. Save the remaining 10% to 15% that the "experts" want you to spend. You will be so much better off in the long run. If you have to pay more than 100 times going monthly rent for a similar property (1700 monthly rent = 170,000 value), you need to rent until that ratio gets in line.

bgamall profile image

bgamall 6 years ago from Las Vegas, Nevada Author

Excellent point. In Britain, instead of ponzi loans, you were allowed to buy a house based upon 40 percent of your income. That is madness. Nice formula for people to go by as well. Thanks.

mothercristina profile image

mothercristina 6 years ago

Thanks for sharing. Good info to know since I am thinking of buying a house in the near future.

bgamall profile image

bgamall 6 years ago from Las Vegas, Nevada Author

YW, Mothercristina, it just gives you an edge. There is no reason to have to compete, especially in this market.

Eugene OregonReal Estate 5 years ago

I totally agree. I have talk to a major investor in town who dumped 300 plus properties in town back in 2006 and now he is trying to buy everything he can. We have to watch out for the big dogs.

bgamall profile image

bgamall 5 years ago from Las Vegas, Nevada Author

He probably has bank backing. It is such a scam.

bgamall profile image

bgamall 5 years ago from Las Vegas, Nevada Author

Just don't get caught up in any bidding war and you should remain free of these scams. They do exist. And there is no way you can find out because the other offers are always confidential.

bgamall profile image

bgamall 5 years ago from Las Vegas, Nevada Author

Wow, that is beyond me, Subirkrdatta. Maybe calm is a good way to approach buying a house, however.

RavenBiker profile image

RavenBiker 5 years ago from Pittsburgh, PA.

Good advice, mostly. I agree with all your points but I would say for number 6, decide on how much your maximum offer would be before even starting the offer process. If you're unhappy with the sellers "attitude", say so.

I would also add, be sure to have the seller do as much as you can get them to do such as cleaning, painting and other minor repairs as a part of your offer---especially if you're reaching your minimum offer. And make an offer again if they refuse you after some time has past without a sale.

Very useful hub!

bgamall profile image

bgamall 5 years ago from Las Vegas, Nevada Author

Thanks Biker. Number one on advice from me, don't trust banks.

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