Did you know that in the aftermath of the Savings and Loan (Thrifts) scandal there were more than a thousand felony convictions of financial elites? The cost of the wrongdoing associated with the rip-off and closure of nearly 800 Thrifts cost taxpayers more than $160 billion. The current sub-prime/mortgage-backed security scandal is 40 times bigger according to Economics professor William Black. That means the size of the crime is $6.4 trillion by my calculation. Can you guess how many indictments there have been on financial elites who created this enormous mess? Zero, none, nada, zip. Yes, not one single prosecution or conviction has been started of achieved.
That is simply outrageous considering the width and breadth of the many crimes committed. There was “rampant” mortgage fraud in the loan application process according to the FBI as far back as 2004. (Click here to see one of many stories of the FBI warning of mortgage fraud) There was real estate document fraud when the original Promissory Notes and loan documents were “lost.” The Promissory Notes were required to create tens of thousands of mortgage-backed securities (MBS). No “note,” no security. That is security fraud. No security means the special IRS tax treatments for the MBS’s were fraudulently obtained. That is IRS tax fraud. Because there were no documents, the rating agencies fraudulently made up triple “A” ratings for the securities. When the whole mess blew up, big banks hired foreclosure mill law firms to create forged documents. That phony paperwork was and is being used to wrongfully remove homeowners from their property. That is foreclosure fraud.
It appears to me the entire mortgage/securitization industry is one giant criminal enterprise. And yet, last Wednesday, Housing and Urban Development Secretary Shaun Donovan said, “We have not found any evidence at this point of systemic issues in the underlying legal or other documents that have been reviewed.” What!
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