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[WestVirginiaRebel]

Voice of San Diego:

Little more than a year has passed since the first foreclosure notices started showing up on 81 North County condo units wrapped up in a massive real estate scam. Since then, the complexes have been reeling from the effects of vacancies and plunging property values.

Many of the old renters were evicted. Banks assigned representatives to assess the damage and re-sell the condos. Squatters descended on vacant units and have been kicked out. The complexes' homeowners associations have struggled under the weight of delinquent dues.

All this stems from the swindle orchestrated by Bay Area man Jim McConville. In the span of several months in 2008, McConville picked up those units from distressed developers and orchestrated their sale to more than 20 straw buyers -- people who'd rented their identities to him in a complex scam that was the subject of a voiceofsandiego.org investigation last year.

The dust is finally starting to settle, though signs of the swindle's impact remain. A few yellow "WARNING" posters on vacant units prohibit vandals, thieves and trespassers. Lockboxes hang from doorknobs on units that haven't sold yet. The finely coifed headshots of real estate agents beam down from posters perched in vacant units' windows.

And the financial losses have continued to grow.

All of the 81 condos from the Sommerset Villas, Sommerset Woods and Westlake Ranch complexes involved in the scam have been repossessed. Twenty-four have yet to find new buyers. But the other 57 have resold for prices drastically lower than the mortgages were worth, let alone the initial purchase prices.

The U.S. taxpayer is paying for the mounting losses. Across the complexes, the cost to taxpayers is at least $7.8 million.

When the units were just in the beginning stages of foreclosure, it was too soon to tell whether the government-sponsored mortgage companies, Freddie Mac and Fannie Mae, had definitely purchased the shaky loans. Now that the units have gone back to the bank and resold, public records clearly show the majority of these units had mortgages that were sold to Fannie and Freddie -- now largely owned by taxpayers.
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Via Reason, a look at a real estate scam that involved Freddie and Fannie-at taxpayer expense.