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View Diary: Take Action! Obama Administration and Banks Close to Unacceptable Foreclosure Settlement (20 comments)

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  •  On the issue of mortgage fraud (10+ / 0-)

    Bill Black is an economist and law professor who has written extensively about this mess.  He explainsthe kinds of fraud we are dealing with, and it isn't all about a few people buying a too-expensive house.

    The Four Levels of Control Fraud Involving Mortgages

    Home lenders, particularly those making liar’s loans, typically committed endemic “accounting control fraud” on multiple levels.  Control fraud occurs when the persons controlling a seemingly legitimate entity use it as a “weapon” to defraud.  Accounting is the “weapon of choice” for financial control frauds.  Mortgage frauds can be grouped into four levels, each of them exceptionally widespread:  loan origination fraud by the lenders and their agents, the fraudulent sale of fraudulent mortgages, the fraudulent pooling and sale of collateralized debt obligations (CDOs) in which the underlying was largely fraudulent mortgages, and foreclosure fraud.

    I don't expect the Obama Administration to do anything, based on observation of their inactivity thus far.  But if they did what a prosecutor SHOULD do, they would prosecute these frauds instead of trying to sweep them under the rug.

    Your own experience may not be instructive in judging others about whom you may not know anything.  More from a different Bill Black post:

    Making fraudulent loans that placed millions of working class borrowers in loans that they frequently could not afford to repay and were deeply underwater caused them a massive loss of wealth and was distressingly unethical.  The officers controlling the lenders that made fraudulent liar’s loans were even more unethical because they caused this devastation in order to become exceptionally wealthy.  The most morally depraved of the CEOs running accounting control frauds sought out the least financially sophisticated borrowers, often minorities, as their victims.  

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