So we think we have it bad in the United States as the housing market is slowing down and dipping. Lets look at Russia as an example of what can really go wrong.

Russia is in a boom period due to profits from oil and is having a housing shortage. Builders have been buying homes and apartments in the cities and promising people that if they sell to them they will build a better home further out in the suburbs. Once the deal is closed however, the builders are walking away from the customers and they are losing their lifes savings.

The population is in an uproar and are calling on Russian President Putin to reform real estate transactions so this level of fraud and deceit will be stopped. What is even more  disturbing is that when the people defrauded try to take the companies to court, the court officials are paid  off and nothing ever happens with the cases.

The home buyers say they were defrauded by construction firms who promised customers apartments in Moscow and other cities. Russia’s oil-driven economic boom has spurred demand for housing, especially in the capital, forcing many Russians to look for new, affordable homes in the suburbs.
After accepting partial or full payments in cash for the apartments — common practice in the Russian housing market — the firms never built the homes or they sold them to multiple buyers.
One Moscow construction company, Sotsialnaya Initsiativa, is reported to have collected more than $555 million throughout Russia in the scam. The company’s former director, Nikolai Karasyov, was arrested and charged with large-scale fraud in January.
“We’re being told that Russia is in a demographic crisis, that women need to have more children, but how are we supposed to do that when we haven’t got anywhere to live?” asked Anastasia Antonycheva, a spokeswoman for the home buyers, referring to Mr. Putin’s call during his recent state of the nation address for Russians to have more babies. via The Washington Times

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