Melody Wrong: A Deep Dive Into MORTGAGE FRAUD

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**Michael Zuber** (0:26)
Alrighty, folks, I didn't want to do it, but I have to do it. We're going to once again talk about Melody Wrong.
She is blowing up my ex or Twitter feed. I have been copied on no less than 25 different posts talking about Melody Wrong and mortgage fraud. Jason, I don't know if you know who Melody Wrong is, but she is a substack, Arthur and constant doomer on YouTube. But I wanted to run through a scenario that Melody Wrong is pointing at mortgage fraud, money laundering, ultimate criminal activity. And I want to know if you think it's real, if it's fake news or whatnot.

**Jason Hartman** (1:06)
Yeah. And she was on my show about, I want to say maybe three years ago, with predictions of doom that definitely did not come true.

**Michael Zuber** (1:16)
Well, she has a track record that is unimpressive. Negative 5% in 2024 did not happen. Negative 9% in 2025 did not happen. And of course, the latest, greatest, negative 38% in 2026, and we are sitting at all time high. So again, she is not a forecaster, a doomer.

**Jason Hartman** (1:36)
Right. And just so you know, we're talking about her housing price predictions. But remember, she was out with another article that we talked about previously, Michael, that said we would see a 50%, 5-0% reduction in housing prices in the United States. And we debunked that.

**Michael Zuber** (1:55)
It was in the Newsweek article. That's just crazy.

**Jason Hartman** (1:58)
But the point is, is that you know what she's been great at? She's been great at getting views and getting subscribers to her newsletter and doom cells. That's the reality of it. You know, if you're going to come out with a bunch of negative predictions, people pay attention. Our minds look for negativity because that's what helped us survive over eons of history. But we just don't live in that world anymore.
And our primitive brains can't sort this stuff very well.

**Michael Zuber** (2:31)
Well, I want to talk about mortgage fraud because she is painting a very scary picture where all the greedy folks are doing, frankly, things that are illegal. And it's because of this mortgage fraud that the housing market is not performing well. So again, I'm going to summarize what I've seen all over X. Folks, you can look it up on X if you want. But basically, she was on a channel recently that said the following. Jason, you go out and you buy a home for make up a number $500,000.
You then put some lipstick on it, but then you go and you sell it to your friend for a million dollars.
And again, the house is only worth 500 grand, but because he's your friend, he agrees to pay a million dollars. And then of course, you have other homes around there where you go and do cash out refis and use this one single sale to artificially inflate prices. You do a cash out refi and bingo bango. You are suddenly like flush with cash. She is out talking about this as being prevalent. It's happening everywhere and it's fraud. And it doesn't work that way. But again, she has PTSD. So every bogeyman is a bogeyman. How does the mortgage market actually work? How do appraisers actually work? And how are arm's length transactions done to prevent stupid activity like this?

**Jason Hartman** (3:46)
Yeah. Well, you know, what she's talking about, Michael, does happen to some very small degree. Okay, so let's examine this. First of all, appraisers need three comparables.
And even if they had three comparables in one particular neighborhood, they're not generally completely stupid to where they're going to think, oh, why is this house in this neighborhood one million dollars when, you know...

**Michael Zuber** (4:15)
Every other house.

**Jason Hartman** (4:17)
Yeah, just a very short, one neighborhood over, it's only 500,000 for a similar house, okay? You know, the appraisers aren't that dumb. Remember, appraisal is a very localized business, so these appraisers work in local markets largely. I mean, look, I want to just say, there's exceptions to everything, including this. You know, no rule or law applies universally, including this.