So, was doing light insomnia reading and came across an article from May 15, 2020 over at Common Dreams about a new whistleblower lawsuit relating to CMBS ( commercial mortgage-backed securities, I think that is what it is, too lazy and tired to check) and mortgage fund manipulation. Pretty interesting story and well researched by the writer(s), as it delves into the differences and similarities of the MBS debacles of 2008-2009 (with the regular cast of villainous banks). Just a quick lede to whet the appetite for more depressing investor news:
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, there’s evidence something similar is happening again.
Some of the world’s 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.
The gist of the fraud being committed is that the lenders and securities handlers are inflating values, getting fraudulently obtained mortgages/loans, and then bundling them into CMBS and hiding the fraud and making more money.
We really need to allow full clawback with no plea deals for all the people and corporations involved. This revolving door system with full absolution of all parties involved has got to stop and full restitutions and penalties applied; There also needs to be a stipulation for no golden parachute preferences in bankruptcies and no ability to serve in an executive or contractor position for any corporation, period. While we are at it, let’s disallow loading of debt to feed capital companies...