If you move up one level in the Crony Capitalist food chain they too will escape personal accountability, or otherwise not suffer any private capitalist risk. This sort of scam can be addressed with only slightly more than de minimus attention to obtaining valid appraisals at the outset, which then remain in the portfolio of material and significant documents that would just never go away. A federal prosecutor could charge lots of folks for a violation of 18 USC 1014 for overvaluing collateral. It would be like shooting fish in a barrel.

Yet, our policymakers favor the promotion of a publicly-sanctioned pyramid scheme (asset-price hyperinflation), through the creation of debt. There is no greater threat than a properly functioning real estate market -- unadulterated with funny money -- that represents a healthy equilibrium, where appraisals for purposes of collateral for a loan never exceed rental justified valuations with rents that have seasoned for a year or more.

A healthy market would offer the hope of only reasonable rates of return. It would be free of hype. All the hype, including the hype associated with the capital gains tax cut game, is just an indicator the level of corruption or the invitation to engage in corruption. When some policymaker says they want a healthy real estate market -- through artificial price boosting schemes and lots of debt -- what they really want is a sustainable market opportunity for crony capitalist corruption.

Deny the "lender" any cover for losses over and above genuine appraisals for the collateral.

I'm always amazed at how well people like this fall upward. It's as if the only way to advance is to keep failing, and then steal credit for what little good comes from the failure.

And how many banks have been closed by the FDIC because of garbage loans like this in just the past year? Maybe - just maybe - one of the major banks will finally tell this putz he's never going to see money from them again.

Nothing succeeds like failure.

Sam's gonna need to funnel even more projects to G-E now.

The construction loan is but one part of the picture. I would sometime like to see disclosed what this typically does to the condo association's upfront operations and reserve contributions that the developers are usually allowed to defer until a sale occurs - at least in Oregon.

"I would sometime like to see disclosed what this typically does to the condo association's upfront operations"

The usual rule is that the builder/dev (whoever owns the condos before sold) needs to make reserve contributions for all of his unsold units from the day the first one closes.

I am sure there is nothing in reserves from G-E for this project - Unless they had to skim it from the Vestas money they got from CoP.

When you walk away from your obligations as an individual you are a bankrupt and a poor credit risk, if you are a big shot developer it is a "business decision" and you move on to the next suckers (clients).

Our company's 403(b) is with TIAA-CREF. Looks like I better move my money out of their real-estate fund soon . . .

. . . since TIAA-CREF is among the investors giving Edlen more money to blow. (Sorry, that detail was provided in The O's article and not this one. Needed to clarify.)