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Mortgage Fraud Deserves Jail Time
By Larry Doyle on November 4, 2009 | More Posts By Larry Doyle | Author's Website
Fraudulent actions must have consequences.
How is it that with trillions in financial losses and a variety of financial frauds readily apparent, very few individuals have been held accountable? FL, a loyal reader of Sense on Cents, has banged this drum repeatedly.
Why hasn’t this fraud been more aggressively combated? The influence of the banking lobby, primarily over the federal regulatory oversight of the financial industry.
What a shame. Are there some new sheriffs, those being state attorneys general, getting ready to ride into this mess? It would appear they are. I immediately thought of our friend FL upon reading The New York Times report, States Are Pondering Fraud Suits Against Banks.
The banking industry at large has worked in concert with its lobbyists and trade associations to keep regulators and law enforcement at bay. At the federal level, the banks have largely been successful. That success begs the question as to how deeply embedded the lobbyists are in the regulatory community.
How is the bottleneck at the federal level opening up? Thanks to former New York AG Eliot Spitzer for pursuing frauds perpetrated by nationally chartered banks. Current NY AG Andrew Cuomo followed up on Spitzer’s lead and fought a suit brought by the Office of the Comptroller of the Currency and The Clearing House Association, a consortium of national banks, to restrict states ability to oversee national lenders.
The financial industry and its federal regulator, the OCC, are showing their true stripes in fighting this case. Fortunately, lower courts have sided with the states.
Hopefully, the truth will out and those individuals and banking corporations which engaged in the perpetration of fraud will be dealt with in appropriate fashion.
The American public and especially FL deserve nothing less.
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As one of the only honest mortgage brokers in Las Vegas - now out of business thanks to the Fed giving all the business to the big banks - all I can say is that EVERY idiot that came to me for a stupid negative amortization loan option arm loan or want a 2/28 or 3/27 was every bit as guilty - driven by PURE GREED - that they were going to flip the house(s) and wanted zero down and the lowest payment possible. FYI - I refused to write these time bombs - and consequently made far less than most of my competitors. But I can sleep at night.
The real FRAUDSTERS are the real estate agents and the builders that herded the fools into buying homes they could never afford.
The majority of state, no doc, liar loans were originated by the builders via their captive or “preferred” lenders.
But the NAHB, Freddie Mac and the FHA will never let this come to light.