Sham boom?

I know a little about housing (enough to get me in trouble anyway) and I vividly remember the S&L scandal back in the late '80s, so when I hear about this kind of stuff, my bowels feel lighter and I spend all evening doing laundry. From the WaPo:

Many experts have concluded that the nation's real estate boom of recent years was fueled in part by weakened lending standards that sparked excessive demand and drove up prices. Now, some are worried that the looser standards may have permitted a boom of another kind -- a big expansion of mortgage fraud.

No one knows exactly how extensive the crime has become, but new data from the federal government suggest that it has jumped tenfold since 2000. Prosecutors are finding cases all over the country in which sham transactions, based on fraudulent appraisals, led to homes changing hands at far above their real value. Mortgage lenders failed to carry out the most elementary safeguards.

In some neighborhoods, mortgage fraud became so extensive that it drove up overall home prices. That is what happened in Atlanta. Hill, 50, was convicted last month in what authorities call one of the biggest mortgage-fraud cases in U.S. history. It involved 400 fraudulent loan applications; nearly $100 million in mortgages; and 120 closing attorneys, appraisers, mortgage brokers and others who prosecutors say were in on the scam...

Thirty years ago, most Americans got their mortgages at a savings-and-loan association from bankers who obeyed conservative lending rules. But sweeping changes in the finance world have created a far different system. It has helped raise homeownership to record levels, but many real-estate professionals say it also has led to far looser lending standards.

Nowadays, instead of poring over paperwork for weeks, lenders often verify loans through electronic underwriting programs in which numbers can easily be tweaked. About 70 percent of Americans get their home loans from independent mortgage brokers, many of whom are paid bonuses for pushing higher-interest loans.

Now, there are three things that I want to mention here:

First, the housing/mortgage industry sets itself up for scams: developers want houses to sell and push realtors (hungry for commission) to sell to buyers who are set up with mortgages that they can't afford, which are packaged into bonds and sold to Wall Street. The whole thing can quickly devolve into a ponzi scheme if people are either ethically challenged or not paying attention. With the home buying frenzy that has transpired I wouldn't be surprised if there is a real, underlying crisis here.

Second, Pittsburgh hasn't really seen the housing boom like Boston or California did, so I doubt that we'll see widespread fraud. I think, however, that it's more likely that you'll see a lot of these marginal buyers who were sold homes and mortgages that they can't afford begin to enter foreclosure. This will probably be a bigger problem in poorer communities, although it will be more pronounced in more affluent neighborhoods.

Finally, because of the lack of appropriate regulatory oversight, this may only be the tip of the iceberg. How much of the GDP in the last 5 years has been as a result of housing? 6%, perhaps? Imagine what would happen if this was all a sham.

Anyone know if Neil Bush a real esate developer nowadays?