Heard about the new real estate scam? (hint - realtors ain't done yet)

Everyone heard about the new realtor/homedebtor scam?

I'll sum it up as quick as I can.

1) F*cked homedebtor owes $500,000 on a place now worth $250,000. But they're still employed, can still borrow from a stupid bank (who sells the paper to Fannie)

2) Encouraged by realtors and mortgage brokers, the upside down homedebtor buys the similar place across the street for $250,000.

3) F*cked homedebtor then stops paying on their original home, as they move into their new home. They rent out the old home and earn $2,000 a month cash

4) A year goes by, the homedebtor is finally foreclosed, up $24,000 in cash, and has a $250,000 mortgage instead of a $500,000 one.

America. What a country.

Read the Time magazine cover story on the scam in Vegas. You'll hurl. Here's a snippet.

Boemio specializes in short selling, in a particularly Vegas way. Basically, she finds clients who owe more on their house than the house is worth (and that's about 60% of homeowners in Las Vegas) and sells them a new house similar to the one they've been living in at half the price they paid for their old house.

Then she tells them to stop paying the mortgage on their old place until the bank becomes so fed up that it's willing to let the owner sell the house at a huge loss rather than dragging everyone through foreclosure. Since that takes about nine months, many of the owners even rent out their old house in the interim, pocketing a profit.