Thursday, January 24, 2008

It’s The Fraud, Stupid

Since it’s an election year, I have a question for those who purport change.

When is our government going to get out of the business of subsidizing the hucksters that sap money from condo associations?

How?

It’s only a theory but one that bears repeating.

I don’t think it’s too long of a stretch imagining a person that would commit mortgage fraud would also attempt to defraud the government via a subsidized housing program.

Hell, let’s even take the mortgage fraud out of it since the many ways to defraud lenders and devastate neighborhoods has been talked to death.

Let’s just take this theory on it’s own merits.

Assume you have a landlord who owns a unit in a condominium association who applies for a subsidized housing program.

His or her unit passes the initial inspection, they secure a tenant and the payments from the government commence.

From the landlord’s point of view, everything is humming along nicely.

Now let’s throw a few “what if’s” in the mix.

What if the landlord ceases to pay his or her mortgage?

What if the landlord ceases to pay his or her monthly association assessments?

Now the playing field changes.

You would think that a vigilant board would be able to find out if a unit is subsidized or to notify the proper program officials that such shenanigans are taking place.

If you were a betting person, you’d be wrong.

Per current subsidized housing program procedures, unless you’re the client or the landlord, no information can be released.

And I suppose I understand the reasons for that rule.

The world is not a kind place. Let’s face it, there are those out there who would actively discriminate against clients of the program.

Frankly speaking, they’d be dumb asses to court disaster. Federal housing discrimination lawsuits are a bitch.

Nonetheless for a smart fraudster, that lack of communication----or gaping hole if you will---is a license to print money

You see my friends if that cagey trickster isn’t paying his or assessments but is still getting money from the government, how are you going to stop them?

Any attempts to reach out to the bureaucracy that is subsidized housing usually results with being talked to in very clipped, hurried tones.

You’re all but hung up on.

And I should know, I tried to tackle that maze myself.

As a result, the tricksters and fraudsters are potentially---yes I said potentially since I have no proof---getting away with bags of money on the taxpayer’s dime.

It boggles the mind that an individual can commit fraud, default on a mortgage, endanger a person’s primary residence, financially devastate a condo association AND drive down a neighborhood’s property value just like that (*finger snap*)

In a sense if fraud is being committed, one property could be yielding up to two revenue streams. One from the illegal (and inflated) proceeds and another from the subsidized housing revenues.

Now if the suspect landlord is engaging in these activities the mortgage company loses, the condo associations loses, subsidized housing dollars are being thrown out the window and more importantly the tenant loses.

It’s a big fat bag of ass for everybody.

So in this hotly contested election year I’d ask the candidates how they’d protect the interests of the tenants, condo associations and the public piggybank from assholes who are hell bent on taking all of us for a ride.

That’s the reform I’m interested in.

2 comments:

chicago pop said...

Hey Woodlawn Wonder (aka Lyletta):

How would you like to do a guest post (or several) at Hyde Park Progress? Now that you're famous, we'd love to share your glow. :)

I think it would be interesting for a fellow blogger from across the way to share her own perspective on issues that affect us all, like your experience with urban pioneering, why you came to Woodlawn, gentrification in Woodlawn, tensions between new folks and old folks, black folks and white folks, joys and frustrations of Woodlawn and Hyde Park, you and your developer, etc. etc.

Let me know if interested. Topics would be wide open. You can reach me via my profile at Hyde Park Progress.

Randy Burgess said...

Found your blog through the Chicago Mag mention. We are a Lake View building with the same issues: shoddy developer work, non-addressed punchlist issues, developer never got a Certificate of Occupancy from the city (and the city blames us), unpaid assessments on unsold units, foreclosure on unsold units, left us with a god-awful property manager...list goes on and on.

There are lots of organizations around to help condo building start up, but there doesn't seem to be any for our special category: Condos Screwed by Developers and the City that Enables Them.