U.S. Charges 530 in Mortgage Probe With $1 Billion in Losses
Source: Bloomberg
The U.S. charged 530 people with targeting homeowners in mortgage schemes that cost the victims more than $1 billion, Attorney General Eric Holder said today.
More than 73,000 homeowners around the country were affected, the Justice Department said in a statement. The cases, brought over the past year, included “foreclosure rescue schemes” that take advantage of those who have fallen behind on payments, according to the statement.
“These comprehensive efforts represent an historic, government-wide commitment to eradicating mortgage fraud and related offenses across the country,” Holder said at a news conference in Washington.
Frauds involving mortgages expanded after the 2008 housing collapse, prompting federal and state law enforcement officials to increasingly focus on the crimes.
Read more: http://www.bloomberg.com/news/2012-10-09/u-s-charges-530-in-mortgage-fraud-probe-with-1-billion-losses.html
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naaman fletcher
(7,362 posts)but what about the bankers who promoted the frauds and lied in prospectus' about the shit mortgages they were selling to pension funds?
Oh wait, can't charge bankers.
dixiegrrrrl
(60,161 posts)U.S. Files Civil Mortgage Fraud Suit Against Wells Fargo
http://www.democraticunderground.com/1014261059
freshwest
(53,661 posts)That's the way these things are investigated, with tens of thousands of pages entered and many thousands of interviews, and every i dotted and t crossed. When a case like this is perfected, those bankers are toast.
progree
(12,993 posts)I really don't think I'm being cynical. Of all the civil cases, they just result in fines to the company that are trivial compared to the profits they've made and affect nobody but the shareholders, and those only slightly. The only thing that has an effect is criminal charges against executives that result in prison time - that's the only thing that meaningfully punishes this behavior and act as a deterrent.
I'm really trying not to be cynical, but as far as I can tell, these things are (a) window-dressing (b) a way to fund the regulatory agencies.
dixiegrrrrl
(60,161 posts)sounds like you have a healthy grasp on reality.
naaman fletcher
(7,362 posts)The resulting fines will be paid with bailout dollars.
Hell Hath No Fury
(16,327 posts)
NYtoBush-Drop Dead
(490 posts)progree
(12,993 posts)But on reading the entire (short) article, I'm not seeing that. When will anything, anything be done about these people?
A friend of mine, who has been screwed by one of these mortgages, says she's not voting because nobody - Dems or RepubliCONS, and certainly not the present administration, is doing a damn thing to go after these people or to help people like her. That the politicians are all a bunch of crooks at worst, or bought off at best. I've been bugging her to vote, but through her eyes, in a desperate struggle to make payments, its kind of a single issue issue for her. Will welcome any feedback I can give her ON THIS ISSUE, and don't tell me about HAMP and this program and that program and some other program, we already know about all those - she's working with Habitat for Humanity and yet again trying again with more paperwork submissions.
On Edit: Also, I'm not at all interested in civil penalties against Wells Fargo or whoever that are little more that have trivial financial impact on the company. The only thing that counts is lots of prison time.
byeya
(2,842 posts)
McCamy Taylor
(19,240 posts)
MarinCoUSA
(891 posts)Better late than never but why so long to crack this up?
Just asking.
dixiegrrrrl
(60,161 posts)Next month is Nov. 2012, that's why.
The Election!
freshwest
(53,661 posts)
OnlinePoker
(6,128 posts)The banks did a lot of shady dealings to get people who were nowhere near qualified to have massive mortgages under roofs. It was the only way to keep the bubble expanding and their fraud going for a while longer. Of course it was people who had very little to begin with that ended up losing everything in the end.
freshwest
(53,661 posts)They were reading like, 'No money down! Buy a home, it's cheaper than rent! It's time for you to do the right thing for your family's future and invest in a home!'
It was really deceptive about the huge risk being taken by all parties. In years gone by, a good sized down payment was required, calculations done to determine the ratio of annual income to the cost of the house, and the loan, computed.
Because just being able to make a note payment wasn't going to sufficient, insurance, repairs, community fees, etc., also needed to be taken into account. A mortgage is a risk to begin with, for all parties and predicated on the assumption that the borrower's income will e steady, not take a drastic cut through layoff, health or down sizing hours, corporate bankruptcy, or many other factors that are out of both the lender and the borrower's control. I remember when a down of from 10% to 30% was not unheard of.
Also a lot of questions were asked, even asking childless working couples, if they intended to have any and would one of them be staying home for childcare. In addition to credit histories, work and employer questions, other family members vouching for them, etc.
I'm not saying that a great many of them were in over their heads, and as Warren said, the crooks are the ones who knew very well the loans would fail and expected the federal government to bail out the bad loans like the S & L mess during RR's term, when they de-regulated.
In the eighties, they adverstised 'balloon note' mortgages, once again, based on the assumption of stable income, not only that, but rising income. The major problem in this was the failure of income to keep to to the cost of housing. I read a book years back that said a housing bubble was inevitable because of the inflation caused by Nixon changing the basis of US currency. IDK.
I don't blame the homeowners, though. The people who signed those loans may have been ignorant or impractical, but I'll bet the majority were being as responsible as they could, but were just overwhelmed. And they signed loans written by bad actors who knew better.
It's amazing that this one lawsuit against the banks and this is one of several, has finally made it to court with the number of people involved. This is now a criminal case, bigger than most class action lawsuits and I think it will proceed quickly.
dixiegrrrrl
(60,161 posts)as the economy tanked, it spread to affect all sorts of homeowners, many of whom lost their houses thru illegal foreclosures.
In fact, Benanke's most famous understatement was " We have the sub-prime mortage problem contained"
just before Lehman Brothers, Merril Lynch and Bear Stearans all imploded.
And the layer upon layer upon layer of mortgage fraud perpetuated by the banks is STILL being discovered.
Spitfire of ATJ
(32,723 posts)....then they did what they called a "credit default swap" thus betting they would fail.
Soon after it was revealed S&P knew this and was bribed to overrate the securities they downgraded the United States credit rating. They figured any prosecution of their part in the mortgage fraud could be spun as a witch hunt in retaliation.
Up2Late
(17,797 posts)...political reasons (so close to the election), or has that already happened?
Spitfire of ATJ
(32,723 posts)One of these vulture places showed up and claimed they could allow her to stay in the place for six months,...for a fee.
She pulled out her badge and they took off.
Thing of beauty...
Up2Late
(17,797 posts)
Comrade_McKenzie
(2,526 posts)progree
(12,993 posts)DU members. Do you know of any civil penalties on large corporations that have been more than a trivial cost of doing business? If you can show me that, I might change my mind.