Wall Street may finally be put on trial. People directly going after the executives

[Oldgamer]

Finally, Wall Street gets put on trial: We can still hold the 0.1 percent responsible for tanking the economy

Too Big To Fail bailouts let them get away with it. The amazing result of California fraud trial could change that

The Tea Party regards Barack Obama as a kind of devil figure, but when it comes to hunting down the fraudsters responsible for the economic disaster of the last six years, his administration has stuck pretty close to the Tea Party script.

The initial conservative reaction to the disaster, you will recall, was to blame the crisis on the people at the bottom, on minorities and proletarians lost in an orgy of financial misbehavior. Sure enough, when taking on ordinary people who got loans during the real-estate bubble, the president’s Department of Justice has shown admirable devotion to duty, filing hundreds of mortgage-fraud cases against small-timers.

But high-ranking financiers? Obama’s Department of Justice has thus far shown virtually no interest in holding leading bankers criminally accountable for what went on in the last decade. That is ruled out not only by the Too Big to Jail doctrine that top-ranking Obama officials have hinted at, but also by the same logic that inspires certain conservative thinkers—that financiers simply could not have committed fraud, since you would expect fraud to result in riches and instead so many banks went out of business.

“Benjamin Wagner, a U.S. Attorney who is actively prosecuting mortgage fraud cases in Sacramento, Calif., points out that banks lose money when a loan turns out to be fraudulent,” reported a now-famous 2010 story in the Huffington Post. “But convincing a jury that executives intended to make fraudulent loans, and thus should be held criminally responsible, may be too difficult of a hurdle for prosecutors. ‘It doesn't make any sense to me that they would be deliberately defrauding themselves,’ Wagner said.”

So forget those thousands of hours of Congressional investigation and those thousands of pages of journalism on the crisis. It doesn't make any sense to the man in charge. No jury would be convinced. Case closed.

As it happens, a trial just ended in Sacramento in which a jury was convinced that “executives intended to make fraudulent loans.” Here’s the thing, though: It wasn't the government that made the case against the financiers; it was the defendants.

*

The case started as a routine mortgage-fraud prosecution, brought by none other than the aforementioned U.S. Attorney Benjamin Wagner. A group of eastern European immigrants had bought houses in California in 2006, in a real-estate market that was in the early stages of collapse. According to the indictment, filed in 2012, these people’s mortgage applications contained blank spots and wrong information; they were accused of getting the mortgages in order to sell the houses to one another at pumped-up prices in what is called a “straw buyer” scheme. Also, they defaulted on the loans.

However, members of the immigrants’ legal defense team—several of them appointed by the state—had read the newspapers over the years and were aware of the kinds of things that had gone on in real estate during the bubble. They knew, for example, that in the go-go days of the last decade, the mortgage origination industry routinely cranked out “stated income” loans—also known as “liar’s loans”—to people who were obviously unable to make the payments. The bankers back then almost never checked on whether the borrower was telling the truth about their income; they just wanted to make the loan. So the defense team in Sacramento came up with a novel strategy: How can the borrower have committed fraud on a mortgage application if the lender didn't care whether their answers were truthful?

And lenders so didn't care back in the bubble days. They invented liar’s loans and blanketed the country with them during the Oughts not because the poors talked them into doing it, or because the liberals in the Bush Administration forced them to do it—on the contrary, the government warned them against issuing these things, just as the government warns us against swallowing arsenic. The reason bankers did it was because liar’s loans were making bankers rich.

This is a difficult thing to understand—indeed, not understanding it is the stated reason Obama Administration officials have made no effort to send financiers to jail—so let us take this slowly. Executives at the mortgage origination companies got huge bonuses in those days for writing lots of loans. OK? They wanted to write more of them, and the only way to really crank out mortgages on a vast scale was by giving one to anyone who wanted one, regardless of their ability to pay, a feat that is only possible by means of the “liar’s loan.” So: Liar’s loans = rich bankers.

Now, it just so happens that liar’s loans are a lousy product, something that is virtually guaranteed to fail when prices stop rising, something that everyone knew at the time would fail when the bubble burst. That’s why you don’t see liar’s loans when banks are honest and regulators are on the job. Because the bank that makes liar’s loans—and the investor who buys a security based on liar’s loans—will eventually lose their money. That’s why they are banned today. So: Liar’s loans = dead banks. Liar’s loans = slow-acting arsenic. But on the other hand, the immediate bonuses that mortgage execs were collecting for making these poisonous loans were so sweet that they didn’t really care about the long-term effects. So while those awful loans they wrote eventually sank all the big subprime houses—and wrecked the global economy to boot, with Europe still in ruins, etc.—the bankers themselves lived to sail away into the sunset, their yachts laden with bullion.

Do you see what I’m saying? Executives do not always share the interests of the corporation that employs them. They weren’t “defrauding themselves,” as our federal protector laughs, they were defrauding the suckers that paid their bonuses, the shareholders that invested in them, the European pension funds that believed their excreta was Grade A Prime.

The name for this kind of scheme is a “control fraud”; it happens when the officers who control a firm use their power over the firm to enrich themselves while driving the firm itself to the boneyard. The country has seen control frauds many times before; indeed, the man who invented the term was a regulator of S&Ls during the S&L meltdown of the 1980s, and he saw the pattern so many times back then that he wrote a book about it. I am referring to my friend Bill Black, a professor of economics and law at the University of Missouri-Kansas City and also a Distinguished Scholar in Residence for Financial Regulation at the University of Minnesota’s School of Law. Control fraud, Black says, always follows the same recipe, with banks growing rapidly by making vast numbers of extremely risky loans, executives immediately getting rich with big bonuses, and the bank eventually collapsing under the weight of those malicious loans.

The last decade’s epidemic of crap financial instruments—liar’s loans, NINJA loans, interest-only ARMs and all the rest—fit the pattern perfectly. “It makes no sense for an honest banker to lend in this fashion,” Black told me. “If you lend in this fashion, you will suffer catastrophic losses. So honest banks don’t make loans without effective underwriting. But dishonest banks find, under the fraud recipe, that it optimizes their fraud scheme. To make not just a few bad loans, but to have a regular practice of making, day in and day out, enormous numbers of bad loans. . . . You’re mathematically guaranteed to make the officers rich and then they can walk away while the place collapses.”

*

Bill Black worked for many years as a bank regulator and a lawyer for the Federal government, but these days the Federal government has little interest in litigation against bankers. That’s why the mortgage-fraud case in Sacramento saw him appearing as an expert witness for the defense, on whose behalf he testified at great length about the role of control fraud in pumping the real-estate bubble.

The defense wanted the jury to hear Black’s theory because the essence of our government’s law-enforcement work on mortgage fraud is that banks were the victims. Those poor unfortunate financiers were tricked by little people like the “neighbor” that Rick Santelli once ranted against, trying to get an extra bathroom that he didn’t deserve.

What the defense team sought to prove was that this picture was completely upside-down—that the banks didn’t care if people lied on liar’s loans. According to the legal definition of fraud, the lie in question has to be “material,” meaning it has to influence the decision-makers. When a bank is honest, that is an easy thing to show. But it’s different if the decision-makers are themselves trying to crank out lousy (but profitable) loans. Bill Black again, on the control-fraud formula:

“Not only are they not distressed by crappy loans, they must make crappy loans. That’s the fraud recipe. . . . If the decision-makers are running a fraud in which they want this outcome, then they’re going to approve these loans. And they will create a system designed to approve loans that are 90 percent fraudulent.”

What would such a system look like? Well, indiscriminately handing out stated-income loans is part of it. A weak underwriting system is another element. In the case in Sacramento, the court heard testimony from an underwriter at one of the mortgage firms in question and learned that in certain cases she was actually forbidden to ask the borrower’s employer how much the borrower made—in other words, forbidden to check on the income that was stated in the stated-income loan. Here is how Bill Black reacted to that testimony, according to court transcripts:

Q. And do you have an opinion on the quality of the underwriting at GreenPoint [one of the lenders in the case] ?

A. Using the word “quality” in the sentence is an injustice to the word quality.

This was an utter sham in which underwriters were instructed not to underwrite. They were instructed, according to the testimony, that even if they called the employer, had them on the phone, that they were not permitted to ask about the income.

That’s insane.

No honest banker would ever do that.

A mortgage company advertising flier that had been plucked from the sloshing depths of the last decade’s Internet offered further evidence of the bankers’ regard for facts. It is illustrated with a crude computer rendering of the three wise monkeys, next to the words, “Hear No Income, Speak No Asset, See No Employment.” (“Don’t Disclose Your Income, Assets or Employment on this hot new flexible adjustable rate mortgage!”) Look, kids—monkeys! This arsenic must be extra tasty!

The obvious way for the federal prosecutors to head off this argument would have been to describe the lender’s business practices and show that its executives were not, in fact, simply churning out vast numbers of super-high-risk liar’s loans in order to ring some bonus bell. That, in truth, the bankers really cared that facts be represented accurately on loan applications. Unfortunately, the Federal agent who had investigated the case—a man with plenty of experience detecting mortgage fraud—told the court that he had not talked to executives at the firms in question and, indeed, had not interviewed any top mortgage executives, ever.

Q. People in control of a company. So the person who calls the shots at the very top of a company. How many of those have you interviewed in your career?

A. As relates to mortgages?

Q. As to mortgages, yeah.

A. I can’t recall any.

A while later, with a different defense attorney asking questions, here is what the Federal agent had to say about the subprime mortgage lenders:

Q. So you were not concerned at all about the people who were loaning the money and their conduct; is that right?

MR. COPPOLA [the Federal prosecutor]: Objection. Argumentative.

THE COURT: Overruled. You may answer.

THE WITNESS: No. I would consider — they’re the victims in this case. That’s how I consider them.

What kind of snarky remark can I append to that, reader? Sarcasm fails me.

*

This was the first criminal proceeding to examine the basic facts of the mortgage meltdown, and the transcript suggests that some of the people in the courtroom knew it was a historic occasion. After reciting a list of iffy lending practices that were common in the subprime market 10 years ago, the transcript tells us that Bill Black testified as follows:

But for every one of those crazy things that I just described, they’re not crazy for the controlling officers because all of them come with higher fees.

Q. They contribute to the bonuses?

A. They contribute to the phony income that produces the bonuses, but they produce massive increases in losses. That’s why all of the lenders in this case suffered massive losses. Not, you know: Oh, gosh, things got bad. They fell off the table. Disastrous. Billions of dollars of losses in the case of GreenPoint.

But they also pumped out at least 20 billion dollars of this toxic waste. And they are one of the major contributors to the failure of Bear Stearns, one of the largest investment banks in the world.

So you finally have a case in which you are actually looking at the causes of the financial crisis. It’s the first criminal case.

MR. COPPOLA [the Federal prosecutor]: Objection to the relevance of the last remark. Ask it be stricken.

THE COURT: Denied.

The defense put Wall Street’s practices on trial, and the defense won. The jury in Sacramento eventually acquitted all the defendants of all charges.

When I got Bill Black on the phone last week, he talked about the case as a watershed moment. “I came out there to say, ‘Look! there are lions roaming the campsite!’ They took down the global economy!,” he told me. “And jurors can understand this. You say that you can’t get a prosecution. We will come to your back yard and show you how to get a prosecution. Because we’ll do it as a defense. Even though we have no FBI agents, no subpoena authority. . . , we’ll put on a successful prosecution. And we’ll show to you that jurors can understand this.”

U.S. Attorney Benjamin Wagner had this to say, according to the Sacramento Bee: “We respect the criminal process, and accept the jury’s verdict in this case. It will not dissuade us from pressing forward in the many other mortgage fraud cases currently pending in this courthouse.”

Have no fear. The government is on the case. They’re going to track down people who lied on a loan application in the last decade and go after them. Unrelenting pursuit of the people at society’s bottom.

And bailouts for the victims in the C-suites, should some new round of unpleasantness arise.

Of course, the result in the Sacramento case might knock those beautiful plans off the track. Up till now it has been covered as a kind of man-bites-dog story, because “an acquittal in Sacramento federal court is rare,” as the Bee put it. But maybe, in the weeks to come, acquittals like this will become more common. Already, says John Balazs, a member of the defense team, he has been contacted by other attorneys arguing similar cases. Maybe lawyers all over the country will soon be reminding juries that a borrower’s alleged misstatements can’t have been “material” to a lender if the lender was a control fraud dealing in liar’s loans. Maybe one day the courts of this land will acknowledge what the public has known for years: That the fraud that wrecked the world actually happened in the offices of the shadow banks and the Wall Street investment firms.

It all depends, says Toni White, one of the defense attorneys in Sacramento, on “if the judge lets it in.”

“This is what happens when defendants get a fair trial,” she continues. “Where are the CEO’s? Why aren't they here?”

It’s a good question. The government’s near-complete failure to prosecute the true villains of the Great Recession will surely go down as the Obama administration’s grandest disappointment. It has convinced a generation that the fix is always in, that the government patrols some neighborhoods with a finger on the trigger, showing no mercy ever, but that in other precincts a kinder, gentler law prevails. It gets worse when people realize that the officers who ran the subprime lenders before the disaster are back in the mortgage business today. Taken as a whole, the crisis and its aftermath have given the lie to the president’s oft-repeated faith in meritocracy. The people see what’s happened and they get it: there is no meritocracy without accountability. What we've got instead is a society dominated by thieves.

----------------------------------

This is lengthy but very worth reading. This trial may change everything and could sprout more of these suits going after the executives themselves.

What the Government should have done and so far refuses to do is being taken up by people who are gathering in class action suits against these executives like Jamie Dimon who made billions for themselves while destroying their own banks with intent to enrich only themselves.

Link to article

 

[Attic]

Do you see what I’m saying? Executives do not always share the interests of the corporation that employs them. They weren’t “defrauding themselves,” as our federal protector laughs, they were defrauding the suckers that paid their bonuses, the shareholders that invested in them, the European pension funds that believed their excreta was Grade A Prime.




The name for this kind of scheme is a “control fraud”; it happens when the officers who control a firm use their power over the firm to enrich themselves while driving the firm itself to the boneyard. The country has seen control frauds many times before; indeed, the man who invented the term was a regulator of S&Ls during the S&L meltdown of the 1980s, and he saw the pattern so many times back then that he wrote a book about it. I am referring to my friend Bill Black, a professor of economics and law at the University of Missouri-Kansas City and also a Distinguished Scholar in Residence for Financial Regulation at the University of Minnesota’s School of Law. Control fraud, Black says, always follows the same recipe, with banks growing rapidly by making vast numbers of extremely risky loans, executives immediately getting rich with big bonuses, and the bank eventually collapsing under the weight of those malicious loans.

Bolded what I saw first hand during the financial crisis, and something I feel is not widely known about how the fraud effected Wall Street.



Not holding my breath on execs being held accountable for defrauding shareholders or engaging in fraudulent behavior that wrecked the economy. They were bailed out, not sentenced. They also have huge influence over Washington DC politics and behavior.

Dangerous to think Wall St will be held accountable when it's fairly clear and obvious they have not been. It's more likely they aren't being held accountable and will not be for the destruction through financialization (fraudulent and non fraudulent) as they suck productivity and purchasing power away from the masses in order to inflate their number.

 

[Oldgamer]

Bolded what I saw first hand during the financial crisis, and something I feel is not widely known about how the fraud effected Wall Street.



Not holding my breath on execs being held accountable for defrauding shareholders or engaging in fraudulent behavior that wrecked the economy. They were bailed out, not sentenced. They also have huge influence over Washington DC politics and behavior.

Dangerous to think Wall St will be held accountable when it's fairly clear and obvious they have not been. It's more likely they aren't being held accountable and will not be for the destruction through financialization (fraudulent and non fraudulent) as they suck productivity and purchasing power away from the masses in order to inflate their number.

Well I certainly agree and I have a very small hope that maybe this may be a game changer what is happening with regard to the court suit right now. But we will have to wait and see. I will keep my fingers crossed, however this isn't going to change these big bank executives behavior until many are actually charged and thrown in prison for this. Despite any lawsuits that are won by the people, to them this may be just sheer pocket change.

 

[inachu]

I like the 60 minutes article on the home mortgage industry.

She was never late on her payments and she was not a renter but the bank decided to foreclose on her anyway.

Funny thing was that when she explained herself that her job is to investigate fraud in the housing industry she knew they picked on the wrong person.

I'll have to watch that on the 60 app tonight.

 

[nehalem256]

The case started as a routine mortgage-fraud prosecution, brought by none other than the aforementioned U.S. Attorney Benjamin Wagner. A group of eastern European immigrants had bought houses in California in 2006, in a real-estate market that was in the early stages of collapse. According to the indictment, filed in 2012, these people’s mortgage applications contained blank spots and wrong information; they were accused of getting the mortgages in order to sell the houses to one another at pumped-up prices in what is called a “straw buyer” scheme. Also, they defaulted on the loans.

However, members of the immigrants’ legal defense team—several of them appointed by the state—had read the newspapers over the years and were aware of the kinds of things that had gone on in real estate during the bubble. They knew, for example, that in the go-go days of the last decade, the mortgage origination industry routinely cranked out “stated income” loans—also known as “liar’s loans”—to people who were obviously unable to make the payments. The bankers back then almost never checked on whether the borrower was telling the truth about their income; they just wanted to make the loan. So the defense team in Sacramento came up with a novel strategy: How can the borrower have committed fraud on a mortgage application if the lender didn't care whether their answers were truthful?

Those evil banking executives could have stopped me from committing fraud

 

[blake0812]

What exactly does this mean for the OWS movement?

 

[Attic]

Well I certainly agree and I have a very small hope that maybe this may be a game changer what is happening with regard to the court suit right now. But we will have to wait and see. I will keep my fingers crossed, however this isn't going to change these big bank executives behavior until many are actually charged and thrown in prison for this. Despite any lawsuits that are won by the people, to them this may be just sheer pocket change.

What we do see is fines being levied against Wall Street, and large ones. But no jail time.

The problem with fines is that they act more like a toll for these firms rather than a real disincentive to stop driving where and when they want to. So the superhighway of fruad, questionable ethics, outright deceit and theft through financial schemes is still open, as long as you are big enough and can pony up enough dough to pay the toll.

 

[WHAMPOM]

Those evil banking executives could have stopped me from committing fraud

Those evil executives made money off you committing fraud, by making it so easy to commit fraud. They stacked the deck, not you.

 

[JimKiler]

What exactly does this mean for the OWS movement?

Is that still going on? I have not heard any mainstream news about OWS in a long time.

 

[nehalem256]

Those evil executives made money off you committing fraud, by making it so easy to commit fraud. They stacked the deck, not you.

Sounds like they are really claiming there was a conspiracy to commit fraud. Buyer puts in a false income. Bank executives don't bother verifying it.

Shareholder and taxpayer gets screwed.

 

[Anarchist420]

lol... i dont think the OP gets it. let me try to explain:

even if the govt only had one source of funding, then wall street wouldn't exist. the govt having the power (or even the power to threaten) to tax at the same time is how those at the top get away with what they do. as wall street execs are the heads of the biggest banks, they are the first to receive the newly created credit and have the final say what to do with it, so they get the most value from it. before it is spent into circulation, executives can decide how much of it take. with that they can buy public office and the best lawyers.

Then say the govt abolished the fed and replaced it with pure greenbacking (i.e., the govt directly issuing a fiat medium of exchange while taxing certain other mediums of exchange out of circulation and enforcing legal tender contracts), then hyper inflation would be more likely to occur and the avg person definitely wouldn't be able to invest any better than they could now because congress and the president would still decide where the money it created went (those who could influence the central authority the most get the newly created money before everyone else then it would circulate down gradually without giving any one anymore more confidence in its value to invest than wall street would ever allow). prices are set by the market (which means value is subjective). so there would still be just as much malinvestment and more lobbying from wealthy individuals and institutions other than wall street.

And it should not be forgotten that the only constant is change (left wing populists don't seem to have thought about that for some reason).

Finally, the State cant make people happy and it can't even lead many people to happiness for more than a second without making just as many people unhappy. To illustrate my final point for now:
i would still be complaining in a world with 5, 6, 7, fuck, even 15 billion govts as i would still be governed (maybe even totally enslaved). OTOH, the OP would still be complaining if a republic over 5, 6, or even all the continents existed and he were popularly elected to the "highest office of the world". he would be complaining because there would still be naturally occurring differences between "world citizens". two effects of naturally occurring differences between one person and everyone else are that wealth equalities wouldnt last for long and he wouldnt be able to punish enough dishonest rich white male thieves.

 

[cabri]

The people receiving the loans were able to deflect the responsibility.

However, the government is still not going after Wall Street.

Until that happens,same old revolving door.

And from the article the Federal prosecutor passed the blame onto the jury rather than looking at what the jury was indicating.

 

[SMOGZINN]

Those evil banking executives could have stopped me from committing fraud

To have it be fraud the bankers would have to actually want you to give them accurate information. But the reality is that many, and probably most, of them were actively encouraging people to put unrealistic income numbers down. Telling people directly, 'that number is too low, it will never get approved. So, what I want you do to is put down a larger income and the odds are it will get approved, no one ever checks these things.'
That is not fraud on the lenders part.

 

[blake0812]

Is that still going on? I have not heard any mainstream news about OWS in a long time.

I believe so, surely there's some people still protesting after being hijacked by SJWs.

 

[nehalem256]

To have it be fraud the bankers would have to actually want you to give them accurate information. But the reality is that many, and probably most, of them were actively encouraging people to put unrealistic income numbers down. Telling people directly, 'that number is too low, it will never get approved. So, what I want you do to is put down a larger income and the odds are it will get approved, no one ever checks these things.'
That is not fraud on the lenders part.

Of course its fraud.

You appear to be confusing the bank with its employees.

Lets say I own a bank. I then hire some employees to run the bank for me.

Dude comes in and applies for a mortgage and puts down $X for his income. Employee then tells him that income is to low for him to approved and asks him if that is "really" his income *wink wink*. Dude then puts down $2X for his income. Employee approves mortgage and collects massive bonus. Dude later defaults on mortgage that he could not afford causing me to lose money.

Are you really going to argue that the dude and the employee did not defraud me?

 

[SMOGZINN]

Of course its fraud.

You appear to be confusing the bank with its employees.

Lets say I own a bank. I then hire some employees to run the bank for me.

Dude comes in and applies for a mortgage and puts down $X for his income. Employee then tells him that income is to low for him to approved and asks him if that is "really" his income *wink wink*. Dude then puts down $2X for his income. Employee approves mortgage and collects massive bonus. Dude later defaults on mortgage that he could not afford causing me to lose money.

Are you really going to argue that the dude and the employee did not defraud me?

The dude did not defraud you, he did what the duly appointed employee told him to do. That is the very definition of compliance, not fraud. The employee might have defrauded you, if you didn't tell him to do that. The whole point of this article is that the upper management of banks were telling their loan officers to do that. The loan officers complied because, like in most major corporations, the front line workers can't see the big picture so have to trust that management knows what they are doing.
The executives of the banks were defrauding the shareholders.

 

[nehalem256]

The dude did not defraud you, he did what the duly appointed employee told him to do. That is the very definition of compliance, not fraud. The employee might have defrauded you, if you didn't tell him to do that. The whole point of this article is that the upper management of banks were telling their loan officers to do that. The loan officers complied because, like in most major corporations, the front line workers can't see the big picture so have to trust that management knows what they are doing.
The executives of the banks were defrauding the shareholders.

And what the the employee told him to do was commit fraud.

 

[SMOGZINN]

And what the the employee told him to do was commit fraud.

Fraud deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury. That means it takes more then just false information to be fraud, you have to be using that false information to deceive. If they were being told to put larger numbers then they were not deceiving, therefore not fraud.

 

[nehalem256]

Fraud deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury. That means it takes more then just false information to be fraud, you have to be using that false information to deceive. If they were being told to put larger numbers then they were not deceiving, therefore not fraud.

Except here you agreed that someone was being deceived.

The executives of the banks were defrauding the shareholders.

Basically the people getting the loans and the people making the loans were working together to defraud the shareholders.

 

[SMOGZINN]

Except here you agreed that someone was being deceived.



Basically the people getting the loans and the people making the loans were working together to defraud the shareholders.

Except intention was there as well. Only the bank executives have intent to defraud. Everyone else are following instructions they are given on how to fill out the loan forms.

 

[piasabird]

How come when a big fine is paid by BAC or some other bank, Holder wants to give the money to liberal causes and not back to the people with the bad loans?

 

[Squeetard]

Those evil banking executives could have stopped me from committing fraud

This article is only a part of the entire fiasco. It was about some home owners defending themselves.

The massive fraud occurred when bankers fraudulently and knowingly (there are emails and voice recordings) pumped these as AAA loans to the mortgage insurers. That's right, they lent the money and then bet on it to fail, making even more money. That is how they sunk the big banks.

Watch the documentary "Inside Job". It will fill you with murderous rage.

 

[glenn1]

The dude did not defraud you, he did what the duly appointed employee told him to do. That is the very definition of compliance, not fraud. The employee might have defrauded you, if you didn't tell him to do that. The whole point of this article is that the upper management of banks were telling their loan officers to do that. The loan officers complied because, like in most major corporations, the front line workers can't see the big picture so have to trust that management knows what they are doing.
The executives of the banks were defrauding the shareholders.

All mortgage applications have boilerplate language the borrower agrees to, such as "I certify that all information submitted in the application is true and correct." It doesn't matter if a bank employee or anyone else induced or instructed them to put falsehoods there, it's still mortgage fraud no matter what.

 

[fskimospy]

All mortgage applications have boilerplate language the borrower agrees to, such as "I certify that all information submitted in the application is true and correct." It doesn't matter if a bank employee or anyone else induced or instructed them to put falsehoods there, it's still mortgage fraud no matter what.

You still have to have intent. I tend to think that the major majority of these fraudulent mortgages involved fraud from both the person preparing the paperwork and the person signing it, but I'm quite certain that in some cases the person didn't know what they were signing or what those numbers meant.

I do agree that this is one thing that people really should focus more on when it comes to the housing bubble/financial crisis, though. People all know that the various banks were committing massive fraud. (and they definitely were) People tend to forget all the fraud being engaged in by individuals.

 

[dmcowen674]

Wall Street may finally be put on trial.

People directly going after the executives

Finally, Wall Street gets put on trial:

We can still hold the 0.1 percent responsible for tanking the economy

----------------------------------

This is lengthy but very worth reading.

This trial may change everything and could sprout more of these suits going after the executives themselves.

I don't expect too much from these trials however they are yet another pointer in the direction of a full scale revolt.