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In this video I produced, I talked with former Ameriquest employees who spoke about the corrupt culture that permeated the entire company.  It seems like the fraud problem is just now bubbling up to the surface.  Now that homeowners are facing foreclosure they are examining their loan agreements and finding fraud.  

Experts I have spoken to say that fraud was so rampant in the subprime lending industry that the investment banks who bought all of the mortgages have no idea of the true value of their assets.  

It is becoming increasingly clear that the financial crisis was the product of more than just corporate greed; as more of these stories surface it could become apparent that there was large scale white collar crime carried out at the highest levels of the mortgage and investment industries.  

Then the question is:  Who goes to jail?  

Criminal fraud may be the most underreported aspect of our current financial crisis. In this "Road to Ruin" report, former subprime lenders from Ameriquest, once the country's largest lender, describe a system rife with fraud. They describe how a "by-any-means-necessary" policy pushed employees to cut corners and falsify documents on bad mortgages and then sell the toxic assets to Wall Street banks eager to make fast profits.

There is a lot more that I would like to cover on this subject, so please let me know if you have any thoughts on this or other stories you think should be covered in video form.

You can email me directly at lagansebert@gmail.com

Originally posted to lagan on Mon May 11, 2009 at 09:08 AM PDT.

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Comment Preferences

  •  On a related note, (5+ / 0-)

    while it is perfectly legal to do it, expect a wave of company bankruptcies in 2013 due to LBOs (leveraged buyouts) when the debts largely come due.

    An LBO is nothing more than a form of mortgage: You buy a company with a loan and you mortgage a company to repay it. During the frantic pre-crash years it was quite common and isn't problematic when the economy is doing well, but when profits fall or vanish it's impossible to pay the debt off.

    Iuris praecepta sunt haec: Honeste vivere, alterum non laedere, suum cuique tribuere. - Ulpian, Digestae 1, 3

    by Dauphin on Mon May 11, 2009 at 09:22:22 AM PDT

  •  It was obvious that they knew the loans were bad (8+ / 0-)

    They charged the poor borrowers up the yinyang for them..

    Listen to this radio show, or read the transcript, its the best expose of how ugly the whole subprime mortgage thing really was..

    the best program or writing on its cause that I have seen..

    355: The Giant Pool of Money

    http://www.thislife.org/...

    Download a transcript.

    A special program about the housing crisis produced in a special collaboration with NPR News. We explain it all to you. What does the housing crisis have to do with the turmoil on Wall Street? Why did banks make half-million dollar loans to people without jobs or income? And why is everyone talking so much about the 1930s? It all comes back to the Giant Pool of Money.

    Public Option is Unproven Experimental Procedure
    We KNOW that single payer WORKS!

    by Andiamo on Mon May 11, 2009 at 09:24:08 AM PDT

  •  What is the URL of the video? (1+ / 0-)
    Recommended by:
    MKSinSA

    I didn't see it..

    Public Option is Unproven Experimental Procedure
    We KNOW that single payer WORKS!

    by Andiamo on Mon May 11, 2009 at 09:25:35 AM PDT

  •  What is unfortunate is that the 1980's didn't (4+ / 0-)

    teach anyone anything because the S & L scams of the 80's which resulted in the first bubble bust continued and grew in the 90's and up to now.

    I thought perhaps this wiki would also give some information on this particular company which I was never familiar with.

    Thanks for the video and the diary.

    http://en.wikipedia.org/...

    •  Your Wiki link points out that ACORN had (13+ / 0-)

      taken on Ameriquest for predatory lending and won.  I followed that link and read an article about ACORN taking on Citi, Household Finance, Beneficial, etc. over the issue of predatory lending.  It's no wonder that the Rethugs keep obsessing about ACORN.  It's been fighting and winning big battles against the Rethug banksters.  This whole subject is very complicated and rife with fraud against the poor and middle class.

    •  The 80's Taught EVERYTHING To These Perps (7+ / 0-)

      It's all been about global syndicated crime and very literal conquest.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Mon May 11, 2009 at 10:01:33 AM PDT

      [ Parent ]

      •  They seem to have refined their criminal activity (0+ / 0-)

        from the 1980's to now.  It took some time, but looks like they succeeded in their goal of becoming untouchable by the justice department.

        •  William Black tells us that (0+ / 0-)

          the 1980's S&L crimes, Drexel Burnham shenanigans, and the taxpayer-financed bailout were the training that prefigured the housing bubble and mortgage scam. Once they knew that the government could be bought into bailing out the bankers, it was no-holds-barred. The pressure to move the loans out the door was to maximize on the theft before the economy crashed, putting a cap on the amount of bailout.
          .........
          lagan:

          Thanks for this excellent video.
          .........
          The scam continues, enabled by Congress and the Executive. Unless criminal charges are brought, and endless bailouts stopped, there will be no incentive for the banks to modify loans or permit short sales. Instead, they continue to foreclose, as the video showed the boarded-up homes. Even good-faith efforts to negotiate with lenders are stonewalled, then used as a reason to charge huge additional 'lawyers fees' onto the mortgage. Theses banks are merely trying to bilk desperate people out of every last cent before finally foreclosing, knowing all along that the taxpayers will ante up to cover their 'losses' (never mind covering the losses of the borrowers). Meanwhile neighborhoods are ravaged and perfectly good houses left to rot, while millions of broke, homeless families .......... ?

          •  I believe you are most likely correct. (0+ / 0-)

            I have never thought of it as a designed theft on this grand of a scale, but you could be right on the mark.

            You have described the scenario as it is.  I agree that the bankers need to be dealt with.  If not by the Department of Justice then the states should have their Attorneys General go after them on state charges.  Many states have state RICO laws and they should be put to good use.

            •  The state AGs actually tried to go (1+ / 0-)
              Recommended by:
              seattledoglover

              after the banks for predatory lending. Eliot Spitzer wrote an oped about how the Bush Admin put the OCC up to pre-empting that effort. He was busted shortly thereafter with the prostitution charge. Thus proof of Federal government complicity. We know about Neil Bush's Silverado escapade in the 1980's S&L scam. It all makes perfect sense as a concerted conspiracy between the banks and those who could make sure the regulators looked the other way or were purposely underfunded.

              •  The more I read your comments the more my stomach (1+ / 0-)
                Recommended by:
                Halcyon

                is jumping because I am sorry to say that you are right on the money.  We have been had and that is a sad situation.  I am very angry about it all.  

                The best we can do is remove ourselves from their economy altogether which is what many people on DK have been suggesting.  

                The best thing I can think of is to create an economy that is outside of the Wall Street situation meaning, pull money and close accounts with the big banks and let them go their merry way.

                If we have no jobs, the government gets no revenue to bail them out with.  Perhaps that is where we are going.

                •  Yes, those who can divest from 'the system' (1+ / 0-)
                  Recommended by:
                  seattledoglover

                  and grow their own food in barter communities, and who have handyman skills, will have the best chance of muddling through.

                  What kind of dog(s) have you? We have a Std Poodle who protects our chickens from the resident foxes, and generally delights us with her engaging goofiness.

                  •  The dog is so old, he would be frightened away (1+ / 0-)
                    Recommended by:
                    Halcyon

                    by the fox or give the fox the chickens if I had chickens.

                    There are interesting things happening in Seattle.  I don't know where it will all end up but I am considering leaving the city soon.  We might see some odd things soon.  I have never seen more police cars roaming around the city in my life.

  •  The homeowners are finding fraud? (0+ / 0-)

    The homeowners were part of the fraud much of the time. Ameriquest was a retail company, no brokers. So any inflation of property values or borrower income or misrepresentation of occupancy would have had to at least have been known by the borrower at the time of origination (even if the loan officer knew it as well).

    I'm in the pro-Obama wing of the Democratic Party.

    by doc2 on Mon May 11, 2009 at 09:34:48 AM PDT

    •  I disagree with that (6+ / 0-)

      Yeah, perhaps a percentage -- 25 percent- of homeowners knew something was shady.  But banks had for so long established that you don't get a loan unless you can afford to pay it- and then they just dropped that notion.

      I bought my house in 1999- perfect credit- and was given a hard time, even though its quite a modest house.  In 2006 we thought about selling, and investigated what we would qualify for-- one broker told me-- that, in 1999, with almost the same income, I could qualify for 130K, that in 2006 I'd qualify for 400K loan-- that's the difference that happened in the industry in a few short years.

      Now- I didn't do that- but I think some people who did were misled or didn't understand.  I hate the notion that when people are misled by "professionals" they somehow are totally responsible.  

    •  Hmmm (2+ / 0-)
      Recommended by:
      Cali Techie, EmmaKY

      Didn't one or more of the former employees in the film say that documents including the buyers financials (income) were fabricated by the employee in order to get the loan through?  That's what I heard.

      Perhaps some of the borrowers were also aware of the "cheating" on the facts, perhaps not.  When I was in real estate (during the 70's) lenders were always pushing to do things on the fringe or clearly fraud saying "You don't understand, we do this all the time.  This is just the way the mortgage business is."  I never encouraged any buyers to go along with this "lie."  It wasn't long before I quit real estate because there was just too much of all of it that was border-line ethical or legal.  Not something I could or would do.

      *the blogger formerly known as shirlstars

      by Shirl In Idaho on Mon May 11, 2009 at 10:08:01 AM PDT

      [ Parent ]

    •  Not according to the video (3+ / 0-)

      Some of the former employees state income and other underwriting information was changed after borrowers signed the papers.  In some cases papers weren't signed at all.

      A conservative is a man with two perfectly good legs who, however, has never learned how to walk forward. FDR

      by Betty Pinson on Mon May 11, 2009 at 10:21:42 AM PDT

      [ Parent ]

  •  I think you are really doing a great service by (11+ / 0-)

    publicizing this aspect of the financial crisis.  Thanks for the excellent video.  One aspect of this problem that I've wondered about concerns the government agencies who are responsible for investigating these crimes.  They are apparently so understaffed and untrained that they have neither the manpower not the intellectual resources to fully investigate.  Keep up the good work!

  •  the notion of fraud (9+ / 0-)

    as perpetuated in the media is one of borrower fraud vs lender fraud.  

    Basically the lenders got out in front of the scandal to pervert/subvert the debate and blame the huge numbers of "nefarious" borrowers of committing fraud against the "victimized" industry that stood to profit on a huge scale.  

    The success of this media campaign has been mind boggling and depressing in that it is so weak once an even cursory look is given.  It presupposes that unaffiliated people all over the country got together (must have been at the annual defrauders conference) to take the system down by way of becoming homeless and destitute.  After all, "That'll show 'em!").

    Thanks for putting the blame for fraud where it belongs, as indeed fraud occurred.  The only question is whether the TM will attach it as vigorously to the true instigators as they so willingly cast responsibility on the borrowers?  One can hope.  

  •  Fraud? At a mortgage company? (4+ / 0-)

    Who knew?

  •  One in every 135 Florida homeowners (0+ / 0-)

    received a foreclosure notice in April of 2009.  Nevada, one in every 68 homes.  California, one in 138.

    Today:

    http://www.dailyfinance.com/...

    This is insanity, these homeowners are trapped, the vast majority are not cheaters, criminals or stupid.  They were lured into this situation by the system.

    Something has to to happen or this economy is going to be fucked for another 20 years.  Who is going to spend money when everything is going to the banks, credit card companies and healthcare?

    I am quite sure now that often, very often, in matters concerning religion and politics a man's reasoning powers are not above the monkey's. - Mark Twain

    by route66 on Wed May 13, 2009 at 07:18:49 AM PDT

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