Whistleblower: Wall Street Has Engaged in Widespread Manipulation of Mortgage Funds
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Source: Propublica
Among the toxic contributors to the financial crisis of 2008, few caused as much havoc as mortgages with dodgy numbers and inflated values. Huge quantities of them were assembled into securities that crashed and burned, damaging homeowners and investors alike. Afterward, reforms were promised. Never again, regulators vowed, would real estate financiers be able to fudge numbers and threaten the entire economy.
Twelve years later, theres evidence something similar is happening again.
Some of the worlds biggest banks including Wells Fargo and Deutsche Bank as well as other lenders have engaged in a systematic fraud that allowed them to award borrowers bigger loans than were supported by their true financials, according to a previously unreported whistleblower complaint submitted to the Securities and Exchange Commission last year.
Whereas the fraud during the last crisis was in residential mortgages, the complaint claims this time its happening in commercial properties like office buildings, apartment complexes and retail centers. The complaint focuses on the loans that are gathered into pools whose worth can exceed $1 billion and turned into bonds sold to investors, known as CMBS (for commercial mortgage-backed securities).
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Read more: https://www.propublica.org/article/whistleblower-wall-street-has-engaged-in-widespread-manipulation-of-mortgage-funds
This has the potential to be so much worse than the 2008 financial debacle. We need to reinstate Glass-Steagall.
leftieNanner
(15,082 posts)Has proved to companies that they don't need big fancy offices because their employees can be very productive at home. When it comes time to re-up the lease, many corporations are going to down size. This could be a double whammy!
ck4829
(35,045 posts)Omaha Steve
(99,582 posts)Over the 12 hour limit for LBN.
by Heather Vogell May 15, 7 a.m. EDT
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