An Ode to Marc Cohodes

May 5th, 2017 · 4 Comments · Educational Resources, Excellent Service Awards

This is in response to the backlash leveled at Marc Cohodes by Terence Corcoran, Marc has been criticizing our vaunted Canadian real estate market, and even calls us a banana republic. Here’s the truth, we deserve it. There is so much rot and corruption in our real estate market right now, I can just try to cite a few examples.

I’m a small player in the property management game, and I don’t have any shorts, and I love real estate but we are so far out of whack, it isn’t even funny. I was talking to my great friend yesterday, she met up with a mortgage broker, he asked her and her husband what they want to pay, and he will get them a mortgage.  It will be fixed. This is what the hell we have come to, where mortgage fraud for a million dollars is casual lunch talk.

My owners have asked me to send blank leases to mortgage brokers so that their brokers can “help them out”

Wages in Canada are flat, and house prices go up and up and up? Can we at least admit that fraud is part of that equation? It’s not about the outrageous egregious fraud but our soft, slow, stretching fraud on every level. It’s about people “helping out a friend” and inflating income 20K. Tell us more about your mom, who shops at three grocery stores to save, “gifted” you that down payment. It’s about your cousin who vouches for your job letter. All your friends and relatives help you with a down payment that it will take 20 years to save other wise or maybe a bit more serious fraud.

Our economy is shit without housing, and I say this terrified because I work in this industry.

I wrote about my friend in 2010 who was with Accredited Home Lenders and his mortgage was not renewed. You know who he ended up getting a mortgage with? TD Canada Trust that’s who.

Fraud is like an Iceberg

Do you see how much of that fraud is running below the surface ? Even when I talk to people about rental applications I’m listening for small lies, because where there’s one cockroach there’s sure to be many more hidden, dirty,  like greasy grimy sickness spreading.

Home Capital Group, FSCO, and Their Colossal Leadership Failure

When Home Capital discovered that their mortgage broker channel was compromised they had a duty to disclose. Those 45 Brokers should have been sanctioned by FSCO. They were not. In fact to my knowledge they are all still working in the industry.

Curiously, here is one of their board of directors resigning days before the announcement that the mortgage brokers were fired. That surely doesn’t mean anything, right Mr Corcoran? Just a coincidence?

OSC is a Joke Regulator

When I was involved in the League REIT Ponzi I did a lot of work with the Investors who had been scammed. One of those things was going to the OSC and sending evidence to the OSC. Every investor was to send their facts to their provincial regulator, and they would cooperate with the main investigator the BCSC. I was part of this misinformation campaign to get people to submit their documents. Later I found the the OSC did not cooperate with the BCSC and share documents so nothing was ever done, and those criminals that stole $370,000.000 from widows and orphans, went unpunished. The principals of First Leaside, another Ponzi here in Toronto, had to pay millions of dollars in fines.

My naivete was stripped away, and I have very very low expectations of OSC competence, and nothing I have seen yet, has convinced me otherwise. So when they do something, can we all stand up and applaud these spineless example of prosecutorial timidity? So a double FU to Terrence Corcoran. You are part of the problem.

They could at least try to send some of these crooks to actual jail after they prey on seniors and rape retirement funds for their unjust enrichment. These are complex cases that cost hundreds of thousands to prosecute, but I don’t care. Lets some suits wear some metal bracelets for stealing from granny and maybe the word will get around, the criminals don’t pay their fines anyway, maybe we need to get a little more serious.

The fact that OSC charged the executive of Home Capital Group with anything speaks volumes. The fact that they wouldn’t accept a plea from Soloway, but wanted to charge 5 executives speaks volumes. Those volumes have nothing to do with Marc Cohodes. He doesn’t have superpowers for crying out loud, he’s just a humble chicken farmer. OSC charged Home Capital Group with Bullshit Charges, but everyone who knows anything, knows its a big deal and that’s why their depositors pulled their money.

Al Capone didn’t go to jail for being a mobster, killing people, stealing money, or smuggling liquor, he went to jail for tax evasion, because that could be proven and the rest is history. I don’t evict tenants for disturbing the peace when I can evict them on non payment of rent. Capisce?

We Are In Real Estate Lalaland

I want to say this very softly, but not everyone in Canada needs to own a home. I know I’m blowing your mind here, but for many people, renting is a lot better. WHUT? I’m just going to go on the record, if you are a newly married couple you do not need a 4-5 bedroom house in Markham or Vaughan. Yes, even if it has a custom kitchen with special closers. When you ask me to rent it out as rooms, because that’s the only way you can afford the mortgage and get to live downtown where you are still getting your MBA, I will say no. 3 hour commutes are not good for anyone but sometimes you have to take your lumps.

We are so far off the reservation with our collective mania…

Here’s a list of times you should rent

  • students
  • singles
  • marrieds with no money
  • people who do not want to be responsible for roofs
  • old people who can’t maintain a house
  • marrieds who want to party
  • people who like downtown
  • when it’s cheaper to rent
  • when you don’t have a stable job or career
  • when you have commit mortgage fraud

A Rule about Pyramid & Ponzi Schemes and Fraud

If you are the chicken keeper who is at the head of the charge of discussing fraud, calling out corruption and generally not being pleasant about going along to get along, there is some asshole who will blame you, the whistle blower, for “ruining the gig”. All of a sudden you are the problem because you brought attention to the flaccid emperor with no clothes, or the ponzi scheme with no profits, or the mortgage syndication fraud, or the stinky mortgage origination and the wandering brokers who travel from one company to the other. (Equitable I’m looking at you)

Just the other day, another property development/mortgage syndication racket in Alberta died. I’m betting this is 600 companies worth of co-mingled crap, that ended when they ceased selling more investments to more naive investors because they now have to follow rules of the Alberta Securities Commission.

But here’s the deal, the longer we don’t say anything about the booger on our face, or the pile of dog shit stuck to our shoe, the more it spreads, the grosser it gets, the stinkier it is, and the more it grows and festers.

For the love of all that is holy, government of Canada just stop propping this up. Stop inventing vacancy rates and taking a year to admit there is a mortgage default problem. Stop kowtowing to the senior vote, they’re not real estate geniuses because they lived in a house for 30 years doing nothing but breathing and neither are the rest. It’s time for things to adjust.

Including the Canadian Banks. Heresy.

To stop all the madness you just need to spread just a little of the pain of default to the banks. The first 10% of the default belongs to you, bank with the “impaired” mortgage. Better yet, lets just not hide all the “questionable” loans.

What the hell is this below? Is this really the Canadian way? Scotiabank is that you? BNS Annual report 2016 (pg 144). This graphic below is from a Twitter friend Perpetual in Toronto who posted the text and the link to the document.

So can we all stop saying or thinking that Marc Cohodes is the problem? Can we just stop deluding ourselves that all this is ok? It is not ok.  People said I was an asshole too, when League went through CCAA, they blamed me, because I made the delusion end.

There is no more chilling moment in life, then when you discover fraud. I was reading League’s financial statements, and I had finished reading the report from Grant Thornton (bankruptcy lawyer) on the First Leaside ponzi, and I realized there was no money, there would be no recovery, the company had been bankrupt for eons and was just waiting to die, but was existing solely to take more fees, and make more money for itself with no hope of any return for it’s investors. Nothing except loss of all their money. It is horrifying to have that gelling of facts and realize the sooner it ends, the less innocent people will be hurt. Then people called me and called me for years wishing I could do something about their loss. I tried, I really tried, sometimes all you can do is stop the madness and protect the future victims.

Blaming the Short Sellers Ha!

Years ago I had a husband, we were together for 7 years. One day I came home from work, and literally all my furniture was gone, and his clothes were gone.  I had a chair with no legs and the bed. He moved right in with another woman who I had no knowledge about.

Having been part of the family for years, I called and asked around what the hell was going on and found out about the new girlfriend.

He called me freaked out and fuming. “I was ruining his reputation” by telling everyone what had happened. That he had left, took all the furniture and I didn’t know about any of it, until I was informed by other people. To him I was the “bad guy” because now every one knew he was a cheat and a scoundrel. I mean I couldn’t even have gone along with his lies, because I didn’t know what he said and I was just looking for him and the furniture.

I told him then and I tell you now. Your failing doesn’t happen “when everyone knows about it” it starts with the doing of whatever heinous act you are involved in.  If you don’t want people to know you are a cheater and sneaky furniture taker (lol) don’t do that stuff and conduct yourself with some honor and honesty in life. People do not forget dishonestly.

If you are a Home Capital Group and you fire 45 mortgage brokers, you name them and report them to the authorities and make sure they never work as a mortgage broker again. That’s integrity. You hire an independent outside entity to look at your mortgages, not a Board member who quits after the “audit”

Marc Cohodes did his Homework

I count Marc Cohodes as a friend of mine, and I can assure you he did his homework, he came to Canada, he has integrity and he spoke to a lot of very respected people, myself included. He is just one of the guys who is right, other people have said Canadian real estate is crazy, we just don’t want to contemplate how horrific the carnage will be. We just see a little iceberg, we say that’ll buff right out. Actually it will sink the ship if we don’t stop right now. In fact, I think we’re too late by far, like those people who get stuck to a toilet seat and stay there because they can’t move anymore, until one day 2 years later they call the ambulance and have to get it surgically removed. That’s gonna hurt.

Is Marc profiting from the demise of Home Capital Group? Hell yeah and good on him. If you spot a gold nugget in the street and pick it up, is it your fault someone else dropped it? No. Did he cause the problems at Home Capital and Equitable and the dozen other companies through the years? No. He just spotted the smoke and yelled “There’s Fire” He didn’t set the goddamn fire. Sweeping fires under rugs is poor policy and even poorer public policy. Terence Corcoran, you should be ashamed.

There is no such thing as soft fraud.


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4 Comments so far ↓

  • Yann

    Great post. It is a shame that our mainstream media is barely doing any reporting on this stuff.

  • Allison Jean Munn Barber

    The BC government collected more in Property Transfer Fees than from all other revenues COMBINED in the last several years. You think they want to slow this roll? Luckily we have an election on Tuesday. But they are rolling in money, filthy money. They’ve been bought by the Chinese government.