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View Diary: William K. Black to FDIC/Obama: Stop the Friggin Fraud (178 comments)

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  •  Dead wrong. They loaned other peoples' (5+ / 0-)

    money, often lying at both ends of the deal: to the borrower and the investors in securitized mortgages. These are the folk we tax payers are saving.

    The frog jumped/ into the old pond/ plop! (Basho)

    by Wolf10 on Fri Oct 22, 2010 at 03:50:09 PM PDT

    [ Parent ]

    •  If they lied to investors, that is for (1+ / 0-)
      Recommended by:
      lordcopper

      the investors to litigate. Same for the borrowers. But in a transaction in which the lender wires out money to the borrower, who do you think did most of the lying?

      I'm in the I-fucking-love-this-guy wing of the Democratic Party!

      by doc2 on Fri Oct 22, 2010 at 03:55:40 PM PDT

      [ Parent ]

      •  Missing forest for the trees; (3+ / 0-)
        Recommended by:
        emal, Badabing, nippersdad

        a pattern exists and the same party was lying at both ends of the deal.

        Too much capital in too few hands chasing too few productive opportunities. So they cook up toxic shit and sell it as the next big, great safe thing thus destabilizing the whole system.

        The frog jumped/ into the old pond/ plop! (Basho)

        by Wolf10 on Fri Oct 22, 2010 at 04:16:39 PM PDT

        [ Parent ]

      •  According to the documentation the banks and the (4+ / 0-)
        Recommended by:
        emal, Badabing, nippersdad, Wolf10

        originators.  That is why they are called liars loans, you cannot lie if you have to provide documentation.  They stopped asking for it for a reason, they just needed paper to securitize, that is all they cared about...fee's.  

        "When fascism comes to America, it'll be wrapped in a flag and carrying a cross." Sinclair Lewis

        by lakehillsliberal on Fri Oct 22, 2010 at 04:35:27 PM PDT

        [ Parent ]

        •  There also was a real segment of (0+ / 0-)

          society that was underserved by the full-doc mentality. Alt and limited doc programs started out being a godsend to everybody who is self-employed or wanted to buy real estate with a substantial down payment but not have their tax returns scrutinized. In the end the programs did go too far, but they started out a very good idea.

          I'm in the I-fucking-love-this-guy wing of the Democratic Party!

          by doc2 on Fri Oct 22, 2010 at 06:33:52 PM PDT

          [ Parent ]

          •  I am sure you are right but once those loans (1+ / 0-)
            Recommended by:
            Badabing

            reached critical mass, somebody should have spoken out.  The system has no brakes for bad behavior.

            "When fascism comes to America, it'll be wrapped in a flag and carrying a cross." Sinclair Lewis

            by lakehillsliberal on Fri Oct 22, 2010 at 07:30:46 PM PDT

            [ Parent ]

          •  Whoa whoa whoa (0+ / 0-)

            doc2, I agree with you a lot, but

            who is self-employed or wanted to buy real estate with a substantial down payment but not have their tax returns scrutinized

            suggests that people who engage in tax evasion need to be served in the mortgage market. One, I'm cool with legal tax avoidance, but not tax evasion. Two, this is a slippery slope to

            In the end the programs did go too far

            that is probably unavoidable, as where do you draw the line? Full-doc served us very well for decades before the housing/credit bubble.

            One night in Bangkok makes a hard man humble ... Murray Head

            by virginislandsguy on Fri Oct 22, 2010 at 08:41:14 PM PDT

            [ Parent ]

            •  It's not tax evasion. Some people (0+ / 0-)

              do not want to disclose their tax information to the outside world. It doesn't mean that they didn't pay taxes, or that they underpaid. It just means that they are private, or that while they didn't have much income last year they are now in good shape.

              I'm in the I-fucking-love-this-guy wing of the Democratic Party!

              by doc2 on Fri Oct 22, 2010 at 10:12:37 PM PDT

              [ Parent ]

              •  Ok, I'll stipulate it's not a case (0+ / 0-)

                of tax evasion, but financial privacy. If they are not willing to open the kimono as in a regular mortgage, then they will have to provide additional downside protection for the lender. This could be via a higher down payment, say 25% to 35% and/or a higher interest rate. That would go a long ways in eliminating the speculators and fraudsters.

                One night in Bangkok makes a hard man humble ... Murray Head

                by virginislandsguy on Fri Oct 22, 2010 at 11:53:37 PM PDT

                [ Parent ]

      •  But... in case you missed the news... a judge (2+ / 0-)
        Recommended by:
        Badabing, pawtucketpat

        in charge of litigation at the CFTC made a pact to always rule against investors in favor for the banks. Here, go read carolita's diary on financial frauds and CONNECTIONS.

        The stench is overpowering from the corruption in our system.

        <div style="color: #a00000;"> Our... constitutional heritage rebels at the thought of giving government the power to control men's minds. Thurgood Marshal

        by bronte17 on Fri Oct 22, 2010 at 10:25:45 PM PDT

        [ Parent ]

    •  Wrong - no commercial bank depositor has lost (0+ / 0-)

      money since the advent of the FDIC regulations that insured such deposits up to a limit.

      "The way to see by faith is to shut the eye of reason." - Thomas Paine

      by shrike on Fri Oct 22, 2010 at 03:56:05 PM PDT

      [ Parent ]

      •  It's the investors in securitized mortgage (4+ / 0-)

        of whom I speak.

        The frog jumped/ into the old pond/ plop! (Basho)

        by Wolf10 on Fri Oct 22, 2010 at 04:14:06 PM PDT

        [ Parent ]

        •  Exactly...without proper due diligence, I might (5+ / 0-)
          Recommended by:
          emal, DorothyT, Badabing, nippersdad, Wolf10

          add.  They did not even look at the underlying mortgages or ask for verification.  They relied on the person putting the deal together to do that.  It is too incredible to even believe.

          "When fascism comes to America, it'll be wrapped in a flag and carrying a cross." Sinclair Lewis

          by lakehillsliberal on Fri Oct 22, 2010 at 04:37:27 PM PDT

          [ Parent ]

          •  Due diligence was the responsibility of (3+ / 0-)
            Recommended by:
            Major Tom, Badabing, Wolf10

            the ratings agencies...that were bought off. I can't entirely blame a school system, for example, that did not do its' own due diligence when investing its' retirement funds, that is what the ratings agencies are for. Soveriegn wealth funds, on the other hand, really have no excuse. This is supposedly their business.

            "Man is least himself when he talks in his own person. Give him a mask, and he will tell you the truth." Oscar Wilde

            by nippersdad on Fri Oct 22, 2010 at 05:13:01 PM PDT

            [ Parent ]

            •  Except that the ratings agencies (0+ / 0-)

              never told institutional investors they were doing due diligence. Investors were well aware of the specifics of the ratings process, and they often complained about it. But every deal issued in 06 and 07 got gobbled up anyway. The highly-paid managers of these institutional investors knew exactly what they were buying, they just fucked up. They didn't figure that real estate would blow up and the securitization market would implode. But the smarter ones did.

              I'm in the I-fucking-love-this-guy wing of the Democratic Party!

              by doc2 on Fri Oct 22, 2010 at 06:36:13 PM PDT

              [ Parent ]

      •  the FCIC has already said they cannot support the (1+ / 0-)
        Recommended by:
        Wolf10

        big banks if they go under...are you denying that?

        they have no more money?

        Amazing...

        what lies are told here on Kos.

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