Realtors, property appraisers, mortgage brokers, and risky borrowers cooked the loan books to boost the housing bubble with dodgy loans, then cooked the real-estate sales books for as long as possible to hide the housing-market downturn, and then cooked the public relations to prop up the bubble by claiming that it is a great time to buy and not to worry about a small correction limited to subprime loans already at the bottom of the drop.
Hoisted on Their Own Petard
The bubble-denial backfires on them when it becomes a reason to refuse any taxpayer bailout of the industry, so the conspiracy of silence is cracking.
Orange County real-estate consultant John Burns confessed:
"The housing market has softened much more than is being reported. We have been advising our retainer clients for more than one year about misleading national sales information, both with the Existing Home Sales and New Home Sales data. We are now going public with our concerns because we are concerned that policy makers are relying on national data to conclude that the housing market correction has not been severe" (OCR).It seems that fear of no bailout is driving industry insiders to a desperate new tactic—telling the truth.