Casey Serin

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Casey Serin
Casey serin.jpg
Serin in 2007
Born (1982-09-10) September 10, 1982 (age 41)
Tashkent, Uzbek SSR, Soviet Union
Occupation Real estate investor
Known forReal estate speculation, blogging

Casey Konstantin Serin (born September 10, 1982, legally renamed Casey Constantine in April 2016) is an Uzbekistan-born American blogger, mortgage broker, and real estate investor. In a newspaper article, USA Today called him the "poster child for everything that went wrong in the real estate boom". [1] Born in Tashkent, Uzbekistan, Serin immigrated to the United States in 1994. After graduating from high school, Serin bounced from job to job, generally working in website design. However, in his early twenties, Serin decided to quit working full-time in order to pursue a career in house flipping as a means of earning an income and building wealth. In an eight-month period beginning in October 2005, Serin purchased eight houses in four southwest U.S. states, and then began blogging about the foreclosure [2] process on the properties he was unable to resell. In time, five of the eight properties foreclosed. [3] The dubious nature of Serin's real estate transactions, coupled with his subsequent blogging about the affair, have led to Serin's name becoming strongly associated with the subprime mortgage crisis.

Contents

Background

Between October 2005 and May 2006, Serin purchased eight single-family homes using stated income loans. [1] [4] These loans required no documentation of income, nor any down payments. Before quitting his web design position in January 2006, Serin claimed an over-inflated income (roughly five times his actual pay) on his loan applications, [5] reasoning that many other borrowers were using similar strategies to obtain mortgages for which they would not otherwise qualify. [6] [7] He continued to claim the same income on loan applications completed after he had quit his job. Serin stated that several of the properties were purchased with owner-occupied loans; these generally provide more favorable terms than loans for investment properties. [1] A Voice of San Diego article suggests that Serin's initial loans may not have appeared in credit reports pulled for subsequent loans because he purchased properties in several states over a relatively brief period, so that "the banks couldn't trace the pending loan documents to check up on his story." [8]

Serin received cash back at closing on six of the properties, sometimes exceeding California's legal maximum of three percent of the selling price. A contributor to the Scotsman Guide, a trade publication for the mortgage industry, stated in an article discussing fraudulent practices within the mortgage industry, that the largest amount of cash Serin received for a transaction was $50,000, and that the money was paid either to the seller or a third-party company (which the contributor alleges was bogus), and then returned to Serin after closing. The author, CEO and senior legal counsel of Investors Mortgage Asset Recovery Co. LLC, concludes that responsibility for fraud in cases such as Serin's lies with "everyone who knew about the undisclosed cash and knowingly assisted in the scheme, including the sellers and any real estate agents, appraisers or closing agents." [9] Serin disclosed on a Sacramento news program that he likely would not have been able to qualify for loans under more traditional terms. [10]

Despite already being deeply in debt, in late 2006, Serin borrowed $16,000 to purchase a week-long real estate seminar course purporting to teach "creative financing" [11] at Nouveau Riche University (NRU) in Phoenix. [12] Jim Piccolo, the founder of NRU, was later fined a record $6 million in 2011 by the Arizona Corporation Commission for running a fraudulent real estate investment scheme. [13]

Months later, as the United States housing bubble began to rapidly deflate, Serin became unable to pay the mortgages or sell the properties; at one point, he estimated that he was approximately $2.2 million in debt, with a net worth around negative $600,000. [4] Serin's house buying spree ultimately ended when a lender rejected a loan application for what would have been his ninth property, after discovering his blog. [14] Because of the sheer magnitude of Serin's debt and the improbability of his story, some observers had initially questioned its veracity, alleging that the blog was either performance art or a viral marketing campaign. An article at The Motley Fool expressed doubt over "whether or not this [isn't] just a somewhat elaborate hoax.". [15] However, public records confirm that Serin did purchase the properties in question and did subsequently default on most of the mortgages.

Foreclosure blog and media attention

In September 2006, Serin started the blog IamFacingForeclosure describing his situation, with the idea of both soliciting advise and warning others how to avoid the mistakes he had made. Interest in the blog first developed among readers of other blogs devoted to the United States housing bubble. [16] His story was featured in numerous media outlets—among them, USA Today , [1] National Public Radio, [17] New York magazine, [18] the San Francisco Chronicle , [19] The Economist , [6] The Suze Orman Show, [20] [21] and ABC's Nightline . [4] When Serin first started the blog, commenters were generally supportive, hoping that Serin would make a good faith effort to avoid foreclosure and pay back any remaining debts by looking for work. The initial media exposure largely lauded Serin as an example of forthright blogging, without delving very deeply into the origin of his debts. Also, in 2006 Casey Serin appeared on "Rich Dad's Online Business School" where Casey Serin told his story to Robert Kiyosaki and the members of his audience.

During the ensuing nine months that the blog was updated, Serin generally let his problems stagnate—urgent mail went unopened, the houses went into foreclosure one by one, and Serin did not actively look for work. The overall tone of the blog's comments gradually went from encouraging Serin to openly deriding him for his inaction, his apparent nonchalant attitude towards his financial issues, and his role in the then-emerging subprime mortgage crisis. In May 2007, CNET.com writer Declan McCullagh published an article about Serin's story and the largely negative reactions Serin's blog was garnering from commenters, referring to Serin as "the world's most hated blogger" and describing his blog as "irritainment." [22] McCullagh wrote that "Casey's blog has an enthusiastic – if unrelentingly critical – audience known as 'haterz'." Serin acknowledged that he began to purposely anger readers in an effort to drive further traffic to the blog. [23]

Fate of the blog

In April 2007, Serin appeared on The Suze Orman Show to discuss his financial predicament. Orman recommended that Serin file for bankruptcy and attempt to increase his take-home pay. [20]

The final months of his blog saw further erratic behavior by Serin, including a June 2007 spur-of-the-moment flight to Australia without informing his wife or family members. [24] [25] Regarding his multiple mortgages, Serin acknowledged to the Sydney Morning Herald that "the stuff I did is technically mortgage fraud, but it's not officially called that until someone prosecutes me and proves that that is indeed mortgage fraud," [26] asserting a presumption of innocence. While in Australia, Casey Serin appeared on Top Shelf Radio with Robbie Buck. [27] On the Jon Ronson show, Serin again confirmed his use of so-called "liar loans". [28]

On July 11, 2007, Serin disclosed that he was under investigation by the FBI. In an interview conducted by ABC News, his attorney reported that Casey Serin was under investigation by the FBI, but that "no charges have been brought against Mr. Serin. However, based upon conversations with the U.S. Attorney's office in California, federal charges related to Mr. Serin's real estate transactions are expected to be brought against him". [29] Shortly thereafter, Serin said in a mass e-mailing that he would be closing the blog and getting a "regular W-2 job," citing the stress his family has experienced. [30]

Return to real estate

In 2016, Serin legally changed his name to Casey Constantine. In Facebook comments, he stated that the name change is a sort of rebranding for the next chapter of his career/business in real estate, and that it will allow him much more control over his search results online, somewhat of a clean slate. [31] After the name change, Casey became a licensed Real Estate Broker and Mortgage Loan Originator. He has resumed investing. [32] [33] [34]

Related Research Articles

A mortgage is a legal instrument of the common law which is used to create a security interest in real property held by a lender as a security for a debt, usually a mortgage loan. Hypothec is the corresponding term in civil law jurisdictions, albeit with a wider sense, as it also covers non-possessory lien.

<span class="mw-page-title-main">Foreclosure</span> Legal process where a lender recoups an unpaid loan by forcing the borrower to sell the collateral

Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan.

<span class="mw-page-title-main">Second mortgage</span> Additional loan

Second mortgages, commonly referred to as junior liens, are loans secured by a property in addition to the primary mortgage. Depending on the time at which the second mortgage is originated, the loan can be structured as either a standalone second mortgage or piggyback second mortgage. Whilst a standalone second mortgage is opened subsequent to the primary loan, those with a piggyback loan structure are originated simultaneously with the primary mortgage. With regard to the method in which funds are withdrawn, second mortgages can be arranged as home equity loans or home equity lines of credit. Home equity loans are granted for the full amount at the time of loan origination in contrast to home equity lines of credit which permit the homeowner access to a predetermined amount which is repaid during the repayment period.

<span class="mw-page-title-main">2000s United States housing bubble</span> Economic bubble

The 2000s United States housing bubble or house price boom or 2000shousing cycle was a sharp run up and subsequent collapse of house asset prices affecting over half of the U.S. states. In many regions a real estate bubble, it was the impetus for the subprime mortgage crisis. Housing prices peaked in early 2006, started to decline in 2006 and 2007, and reached new lows in 2011. On December 30, 2008, the Case–Shiller home price index reported the largest price drop in its history. The credit crisis resulting from the bursting of the housing bubble is an important cause of the Great Recession in the United States.

A real-estate bubble or property bubble is a type of economic bubble that occurs periodically in local or global real estate markets, and it typically follows a land boom. A land boom is a rapid increase in the market price of real property such as housing until they reach unsustainable levels and then declines. This period, during the run-up to the crash, is also known as froth. The questions of whether real estate bubbles can be identified and prevented, and whether they have broader macroeconomic significance, are answered differently by schools of economic thought, as detailed below.

<span class="mw-page-title-main">Spanish property bubble</span>

The Spanish property bubble is the collapsed overshooting part of a long-term price increase of Spanish real estate prices. This long-term price increase has happened in various stages from 1985 up to 2008. The housing bubble can be clearly divided in three periods: 1985–1991, in which the price nearly tripled; 1992–1996, in which the price remained somewhat stable; and 1996–2008, in which prices grew astonishingly again. Coinciding with the financial crisis of 2007–08, prices began to fall. In 2013, Raj Badiani, an economist at IHS Global Insight in London, estimated that the value of residential real estate has dropped more than 30 percent since 2007 and that house prices would fall at least 50 percent from the peak by 2015. Alcidi and Gros note; “If construction were to continue at the still relatively high rate of today, the process of absorption of the bubble would take more than 30 years”.

<span class="mw-page-title-main">Real estate investing</span> Buying and selling real estate for profit

Real estate investing involves the purchase, management and sale or rental of real estate for profit. Someone who actively or passively invests in real estate is called a real estate entrepreneur or a real estate investor. In contrast, real estate development is building, improving or renovating real estate.

In the United States, a mortgage note is a promissory note secured by a specified mortgage loan.

<span class="mw-page-title-main">Real estate owned</span>

Real estate owned, or REO, is a term used in the United States to describe a class of property owned by a lender—typically a bank, government agency, or government loan insurer—after an unsuccessful sale at a foreclosure auction. A foreclosing beneficiary will typically set the opening bid at such an auction for at least the outstanding loan amount. If there are no interested bidders, then the beneficiary will legally repossess the property. This is commonly the case when the amount owed on the home is higher than the current market value of the foreclosure property, such as with a mortgage loan made at a high loan-to-value during a real estate bubble. As soon as the beneficiary repossesses the property it is listed on their books as REO and categorized as an asset..

<span class="mw-page-title-main">Mortgage</span> Loan secured using real estate

A mortgage loan or simply mortgage, in civil law jurisdictions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any purpose while putting a lien on the property being mortgaged. The loan is "secured" on the borrower's property through a process known as mortgage origination. This means that a legal mechanism is put into place which allows the lender to take possession and sell the secured property to pay off the loan in the event the borrower defaults on the loan or otherwise fails to abide by its terms. The word mortgage is derived from a Law French term used in Britain in the Middle Ages meaning "death pledge" and refers to the pledge ending (dying) when either the obligation is fulfilled or the property is taken through foreclosure. A mortgage can also be described as "a borrower giving consideration in the form of a collateral for a benefit (loan)".

In real estate, creative financing is non-traditional or uncommon means of buying land or property. The goal of creative financing is generally to purchase, or finance a property, with the buyer/investor using as little of his own money as possible, otherwise known as leveraging. Using these techniques an investor may be able to purchase multiple properties using little, or none, of his "own money".

Nouveau Riche was a multi-level marketing company and a non-accredited vocational school specializing in real estate investing. Class topics ranged from introductory real estate investing to advanced techniques such as creative real estate investing techniques including wholesaling, multi-units, and short sales; examples of course titles are "Fix & Flip" and "Creative Financing."

<span class="mw-page-title-main">Subprime mortgage crisis</span> 2007 mortgage crisis in the United States

The American subprime mortgage crisis was a multinational financial crisis that occurred between 2007 and 2010 that contributed to the 2007–2008 global financial crisis. The crisis led to a severe economic recession, with millions losing their jobs and many businesses going bankrupt. The U.S. government intervened with a series of measures to stabilize the financial system, including the Troubled Asset Relief Program (TARP) and the American Recovery and Reinvestment Act (ARRA).

United States housing prices experienced a major market correction after the housing bubble that peaked in early 2006. Prices of real estate then adjusted downwards in late 2006, causing a loss of market liquidity and subprime defaults.

<span class="mw-page-title-main">Causes of the 2000s United States housing bubble</span>

Observers and analysts have attributed the reasons for the 2001–2006 housing bubble and its 2007–10 collapse in the United States to "everyone from home buyers to Wall Street, mortgage brokers to Alan Greenspan". Other factors that are named include "Mortgage underwriters, investment banks, rating agencies, and investors", "low mortgage interest rates, low short-term interest rates, relaxed standards for mortgage loans, and irrational exuberance" Politicians in both the Democratic and Republican political parties have been cited for "pushing to keep derivatives unregulated" and "with rare exceptions" giving Fannie Mae and Freddie Mac "unwavering support".

This article is a subordinate article to the subprime mortgage crisis. It covers some of the miscellaneous effects of the crisis in more detail, to preserve the flow of the main page.

Doris J. Dungey was an American blogger who wrote extensively about the United States housing bubble for the blog Calculated Risk under the pseudonym Tanta.

A strategic default is the decision by a borrower to stop making payments on a debt, despite having the financial ability to make the payments.

<span class="mw-page-title-main">Mortgage industry of the United States</span>

The mortgage industry of the United States is a major financial sector. The federal government created several programs, or government sponsored entities, to foster mortgage lending, construction and encourage home ownership. These programs include the Government National Mortgage Association, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.

The Making Home Affordable program of the United States Treasury was launched in 2009 as part of the Troubled Asset Relief Program. The main activity under MHA is the Home Affordable Modification Program.

References

  1. 1 2 3 4 Knox, Noelle (October 22, 2006). "10 mistakes that made flipping a flop". USA Today .
  2. ↑ "(Type in Serin Casey) Dallas County Record 200600425251". November 15, 2006. Archived from the original on December 11, 2006.
  3. ↑ "Foreclosure: When Will Casey Serin Pay ..." May 15, 2007.
  4. 1 2 3 "Facing Foreclosure Video Segment on Nightline". Nightline . April 13, 2007. p. 1.
  5. ↑ "Facing Foreclosure Video Segment on Nightline". Nightline . April 13, 2007. p. 3.
  6. 1 2 "America's Housing Market:Cracks in the façade". Economist.com]. March 22, 2007.
  7. ↑ Knox, Noelle (March 4, 2007). "Homeowners stuck as lenders cinch standards". USA Today.
  8. ↑ "My Life is an Open Blog". Voice of San Diego . September 22, 2006. p. 1. Archived from the original on September 28, 2007. Retrieved April 21, 2007.
  9. ↑ Simpson, C. Robert (January 2007). "Truth or Consequence". Scotsman Guide.
  10. ↑ "Central Valley Man Poster Child Of Mortgage Crisis". CBS 5 Eyewitness News. March 7, 2007.
  11. ↑ CNN Money. Money.cnn.com (August 8, 2007). Retrieved on 2017-01-09.
  12. ↑ Garnham, Jonathan. (May 14, 2007) CNET. News.cnet.com. Retrieved on 2017-01-09.
  13. ↑ Arizona Corporation Commission Archived June 13, 2013, at the Wayback Machine press release
  14. ↑ Britton-Simmons, Geary (April 2007). "From the Top: April". Scotsman Guide.
  15. ↑ Jayson, Seth (September 25, 2006). "24 Years Old, $2 Million in the Hole". The Motley Fool .
  16. ↑ Lloyd, Carol (November 5, 2006). "As bubble sags, market critics are busting out". San Francisco Chronicle .
  17. ↑ Arnold, Chris (October 19, 2006). "Loose Credit Standards Boost Real Estate Woes". NPR Morning Edition .
  18. ↑ Nussbaum, Emily (February 12, 2007). "Say Everything". New York magazine .
  19. ↑ Lloyd, Carol (November 5, 2006). "No spin is used as blog describes downward spiral". San Francisco Chronicle .
  20. 1 2 "Facing Foreclosure". The Suze Orman Show . April 7, 2007. Archived from the original on February 10, 2007.
  21. ↑ "Facing Foreclosure Video Segment on Suze Orman Show". The Suze Orman Show. April 7, 2007. Archived from the original on July 7, 2007.
  22. ↑ McCullagh, Declan (May 14, 2007). "The World's Most Hated Blogger?". CNET .
  23. ↑ Los Angeles Times (June 3, 2007). "Say It Isn't So: Casey Serin, Foreclosure Blogger, Closes His Blog". Los Angeles Times .
  24. ↑ McCullagh, Declan. "Notorious debtor Casey Serin shuts down blog" . Retrieved June 1, 2007.
  25. ↑ CNET News.com Staff. "Interviewing Serin, the blogger people love to hate" . Retrieved June 13, 2007.[ permanent dead link ]
  26. ↑ Hutcheon, Stephen (June 19, 2007). "Blogger learns how to monetise hate". The Sydney Morning Herald. Retrieved June 18, 2007.
  27. ↑ Buck, Robbie. "Top Shelf Radio, Triple J". Australian Broadcasting Corporation . Archived from the original on March 17, 2009. Retrieved June 19, 2007.
  28. ↑ Ronson, Jon. "Jon Ronson On..." Archived from the original on July 18, 2007. Retrieved June 19, 2007.
  29. ↑ ABC News. "ABC News: Housing Bubble Bursts for Investor". ABC News .
  30. ↑ Shallit, Bob. "A flop as a 'flipper,' he seeks a real job". Archived from the original on November 28, 2007. Retrieved July 20, 2007.
  31. ↑ "State of California Bureau of Real Estate License".
  32. ↑ "Public License Lookup - DRE". www2.dre.ca.gov. Retrieved October 16, 2022.
  33. ↑ EP051 Real Investor Series - Casey Constantine , retrieved October 16, 2022
  34. ↑ Casey's Twitter Page https://twitter.com/cc_broker . Retrieved October 16, 2022.{{cite web}}: Missing or empty |title= (help)
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