The Center for Public Integrity Michael Hudson has another excellent installment of his investigation into the culture of fraud at mortgage lenders during the bubble.
Everybody else seems to have moved on from the on-the-ground crime scene, to the extent that they bothered to look at it in the first place, except for Hudson, who’s still trying to show us what happened for iWatch News.
At four years old and counting, this is ancient history for newspaper reporters unfortunately living under the “tyranny of recency” (h/t Megan Garber).
But there’s still lots of muck to be raked and it still matters, as we see from how easily the Big Lie that the private sector didn’t cause the crisis has taken hold on the right.
Hudson’s series has shown how companies crushed whistleblowers who tried to stop rampant fraud in their organizations. As Binyamin Appelbaum said this morning in linking Hudson’s story:
Further evidence that the government forced financial companies to make bad mortgage loans
Indeed, presumably managers weren’t doing this so they could meet Community Reinvestment Act requirements. They were doing it because they got paid to do it. Investors wanted crappy loans to get yield, banks wanted the fees from bundling and selling them to investors (and to themselves, in the cluster stage of the crisis), and the mortgage markets followed the money.
What Hudson is trying to do here is show the systemic corruption of the mortgage industry, and the numbers he puts up high help quite a bit there.
Watch News has identified 63 former employees at 20 financial institutions who say they were fired or demoted for reporting fraud or refusing to commit fraud.
Lest you think these people are falling all over themselves running to the media, think again. Some of the sixty-three talked to Hudson, but he found many of them scouring court filings and Department of Labor proceedings.
Like Washington Mutual fraud inspector Theresa Hagman, who was fired by WaMu in 2004 after finding what she thought was fraud in lending to homebuilders. A judge later awarded her a million bucks for wrongful terminating a whistleblower. She told him:
…that there were “senior-level people in this organization who are still there today who did not tell the truth. Their integrity and their honor … without question failed.”
Hudson nicely juxtaposes with ex-WaMu CEO Kerry Killinger’s testimony to Congress:
In congressional testimony, former Washington Mutual chief executive Kerry Killinger blamed borrowers for misleading WaMu about their incomes and other details in their loan applications.
“I’m certainly very disappointed to think about my customers lying to me, because that’s fraud and it shouldn’t happen,” Killinger said. “But I think an objective look at things is that there must have been situations where people did not tell the truth on their applications.”
Hudson notes that a WaMu internal investigation found an 83 percent fraud rate at one of the bank’s big centers, and it did nothing about it.
The prospect of whistleblowers getting fired, demoted, or ostracized is the big reason why it’s so hard to ferret out wrongdoing in companies. But there are other ones, of course.
At the same time, employers are often successful at preventing whistleblowers from getting the word out to the wider world. When companies and employees negotiate severance contracts and legal settlements, confidentiality clauses often permanently silence whistleblowers. Companies also frequently force ex-employees with whistleblower claims into private arbitration, ensuring that many details of their cases will remain secret.
This makes it that much harder for the press to report these stories. Hudson is showing here, though, that that’s no excuse.
UPDATE: In comments, Thimbles points out this stat from Hudson’s piece:
“When Congress passed Sarbanes-Oxley in 2002, it raised hopes that more workers would be emboldened to come forward with information that would help prevent future corporate scandals. One legal scholar hailed the act — which gave federal labor officials the power to order companies to swiftly reinstate whistleblowers with back pay — as “the most important whistleblower protection law in the world.”
Things haven’t worked out as whistleblower advocates had hoped. Critics claim the Labor Department hasn’t done enough to protect financial whistleblowers.
This was a shocking statistic:
"When Congress passed Sarbanes-Oxley in 2002, it raised hopes that more workers would be emboldened to come forward with information that would help prevent future corporate scandals. One legal scholar hailed the act — which gave federal labor officials the power to order companies to swiftly reinstate whistleblowers with back pay — as “the most important whistleblower protection law in the world.”
Things haven’t worked out as whistleblower advocates had hoped. Critics claim the Labor Department hasn’t done enough to protect financial whistleblowers.
In roughly the first nine years of the law — from 2002 through May 20 of this year — the agency issued merit findings in 21 whistleblower complaints and dismissed 1,211 others.
That record is just one example, whistleblower advocates say, of the trials that corporate whistleblowers go through when they try to do the right thing.
When whistleblowers seek help from government agencies or state and federal courts, they often face long delays and find themselves outgunned by their employers’ legal teams."
Which leads us to another year old Michael Hudson article on whistleblower handling under Bush and Obama:
http://www.iwatchnews.org/2010/07/22/2606/federal-bureaucracy-dismisses-most-sarbanes-oxley-whistleblower-claims
And a year old GAO report on the how OSHA's whistleblowing handling blows.
http://www.gao.gov/new.items/d10722.pdf
"OSHA enhanced its whistleblower training, establishing two mandatory 2-week courses between 2007 and 2008, but has not ensured attendance or taken steps to ensure that investigators have necessary equipment to do their jobs. Nearly all investigators have been credited with taking the first mandatory course, but just over 60 percent has taken or registered for the second mandatory course."
#1 Posted by Thimbles, CJR on Tue 22 Nov 2011 at 06:35 PM
Ryan wrote: "[P]resumably managers weren’t doing this so they could meet Community Reinvestment Act requirements"
padikiller responds: "Presumably"? Why? (aside from the fact that such a presumption aids the cause of those "advocates for government-endorsed redistribution of wealth" that can no longer be referred to as "commies" under Pravda's... er, I mean CJR's new commenting censorship policy)
#2 Posted by padikiller, CJR on Wed 23 Nov 2011 at 06:04 AM
Good catch, Thimbles.
I meant to flag that in my post too. I'll tag on an update...
#3 Posted by Ryan Chittum, CJR on Wed 23 Nov 2011 at 12:00 PM
Ryan wrote: "[P]resumably managers weren’t doing this so they could meet Community Reinvestment Act requirements"
padikiller responds: "Presumably"? Why? (aside from the fact that such a presumption aids the cause of those "advocates for government-endorsed redistribution of wealth" that can no longer be referred to as "commies" under Pravda's... er, I mean CJR's new commenting censorship policy)
#3 Posted by padikiller on Wed 23 Nov 2011 at 06:04 AM
Repeat 10,000 times. (Disclaimer: not channel-jamming).
#4 Posted by Clayton Burns, CJR on Wed 23 Nov 2011 at 12:08 PM
"Presumably"? Why?"
Because padi, if you have to show specific instances with names and documentation to support a pattern and there are few to no specific instances with names and documentation that do, than we have no choice but to presume innocence, remember?
Can you give me ANY specific instances where a low quality subprime loan was give on the basis of the Community Reinvestment Act? Can you summon enough specific instances in order to establish a pattern in a single institution that the CRA was the motivation for giving out bad loans?
By your standards, if the glove doesn't fit (or even if it does, but you refuse to accept the gloves or the hands as evidence) than you must acquit.
#5 Posted by Thimbles, CJR on Wed 23 Nov 2011 at 04:42 PM
I think I'd like to see if there's any relationship between the pathetic handling of whistleblowers and their reports and the destruction of MUI's (matters under inquiry) at the SEC.
http://www.nytimes.com/2011/08/18/business/sec-illegally-destroyed-documents-whistle-blower-alleges.html
http://m.rollingstone.com/?redirurl=/politics/news/is-the-sec-covering-up-wall-street-crimes-20110817
Who knows. Something may pop up. Sure are a lot of questions about the enforcement desire/capability at the SEC. Perhaps the SEC declines a case brought by a whistleblower, the whistleblower becomes another merit dismissed statistic at OSHA.
#6 Posted by Thimbles, CJR on Wed 23 Nov 2011 at 04:55 PM
"Perhaps WHEN the SEC declines a case brought by a whistleblower, the whistleblower becomes another merit dismissed statistic at OSHA."
I need an editor, and another coffee.
#7 Posted by Thimbles, CJR on Wed 23 Nov 2011 at 05:02 PM
I gotcha...
There's a presumption of guilt for "Wall Street" people, generally..
But a presumption of innocence arises when a government boondoggle is called into question...
#8 Posted by padikiller, CJR on Wed 23 Nov 2011 at 06:02 PM
"There's a presumption of guilt for "Wall Street" people, generally..
But a presumption of innocence arises when a government boondoggle is called into question..."
:?
Yeah, um, invert much?
Me? I say marshal the evidence and establish guilt based on where it points. We showed you lots of evidence in the fraud thread previous and in the links to this thread. It all points to bankers and fraud.
What evidence have you got? Does it point to the CRA? Is it 'specific'?
No? Then you got nothing, just "a presumption of innocence for "Wall Street" people who were caught red handed generally, and a presumption of guilt for "government boondoggles" that had nothing to do with the problem generally.
If you believe different, then put yourself to the test you gave me and produce specific instances, including names and details for evidence.
#9 Posted by Thimbles, CJR on Wed 23 Nov 2011 at 09:53 PM
Man, Krugman gets so close to the point here:
http://www.nytimes.com/2011/11/25/opinion/we-are-the-99-9.html
"Meanwhile, the economic crisis showed that much of the apparent value created by modern finance was a mirage. As the Bank of England’s director for financial stability recently put it, seemingly high returns before the crisis simply reflected increased risk-taking — risk that was mostly borne not by the wheeler-dealers themselves but either by naïve investors or by taxpayers, who ended up holding the bag when it all went wrong. And as he waspishly noted, “If risk-making were a value-adding activity, Russian roulette players would contribute disproportionately to global welfare.”"
He gets it. Executives booked high returns today in exchange for high risks tomorrow which they foisted onto naive investors. All he needs to add is "in exchange for high risks tomorrow on purpose foisted onto naive investors on purpose" and you'd have a pretty good sketch of the accounting control fraud dynamic.
"First, cheating has become the dominant strategy in finance. Second, cheating is dominant because finance CEOs create such intensely perverse incentives that fraud becomes endemic...
Accounting control fraud, as criminologists, economists, and (competent) financial regulators recognize is a “sure thing”. See George Akerlof and Paul Romer, “Looting: the Economic Underworld of Bankruptcy for Profit” (1993). It produces guaranteed, record (albeit fictional) short-term reported profits if one follows the fraud “recipe” for a lender, which produces guaranteed, extreme compensation for the controlling officers, and causes catastrophic losses. It is trifecta of guaranteed results that causes CEOs to adopt the perverse incentives they know will cause their officers and employees to follow the fraud recipe. It is the three “de’s” – deregulation, desupervision, and de facto decriminalization that allow the CEOs to put these perverse incentives in place with impunity and produce the criminogenic environments that drive our recurrent, intensifying financial crises."
The problem that occurs in every hideously unequal society is that the minority who controls the balance of power within a system direct the system to channel more resources to themselves. They corrupt it until it becomes dysfunctional. They use it to increase their riches and to restore their losses. Their actions become someone else's consequences.
In an unequal society, there is no penalty for fraud because fraud is just another form of corruption and unequal societies require corruption (on behalf of the minority) to function.
#10 Posted by Thimbles, CJR on Fri 25 Nov 2011 at 02:29 PM
Once again...
No names...
Just more kooky "Vast Wall Street Fraud" nonsense.
Fraud should be prosecuted. If someone lied or misrepresented information to an investor then the book should be thrown at the criminal.
But losing money isn't a crime. Speculating isn't a crime. It just isn't.
And risk taking does indeed add value to the economy. The guy who throws his money on red pays for casino employees to provide services that people want. Wealth is not only transferred to the casino when he (inevitably) loses but is also CREATED in the casino by the added value of labor. This wealth is reflected in the furniture in the pit boss' home, in the car purchased by the cocktail waitress, etc.
Now whether it is "good" or "bad" to have wealth created in casinos is, of course, a matter of debate.
But the simple truth is that WORK creates WEALTH. In a factory or in a casino. Making things or doing things that people want creates wealth.
#11 Posted by padikiller, CJR on Fri 25 Nov 2011 at 02:44 PM
From the Quiet Coup:
http://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/7364/
"Typically, these countries are in a desperate economic situation for one simple reason—the powerful elites within them overreached in good times and took too many risks. Emerging-market governments and their private-sector allies commonly form a tight-knit—and, most of the time, genteel—oligarchy, running the country rather like a profit-seeking company in which they are the controlling shareholders. When a country like Indonesia or South Korea or Russia grows, so do the ambitions of its captains of industry. As masters of their mini-universe, these people make some investments that clearly benefit the broader economy, but they also start making bigger and riskier bets. They reckon—correctly, in most cases—that their political connections will allow them to push onto the government any substantial problems that arise...
But inevitably, emerging-market oligarchs get carried away; they waste money and build massive business empires on a mountain of debt...
Squeezing the oligarchs, though, is seldom the strategy of choice among emerging-market governments. Quite the contrary: at the outset of the crisis, the oligarchs are usually among the first to get extra help from the government, such as preferential access to foreign currency, or maybe a nice tax break, or—here’s a classic Kremlin bailout technique—the assumption of private debt obligations by the government...
But there’s a deeper and more disturbing similarity: elite business interests—financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them."
This corruption becomes tolerated - expected even - when inequality becomes chronic. Integrity within a society is based on mutual trust and mutual power. When both collapse, as they have in America, you see problems described as PK describes here in 19-bloody-96
http://motherjones.com/politics/1996/11/spiral-inequality
"In 1970 the CEO of a typical Fortune 500 corporation earned about 35 times as much as the average manufacturing employee. It would have been unthinkable to pay him 150 times the average, as is now common, and downright outrageous to do so while announcing mass layoffs and cutting the real earnings of many of the company's workers, especially those who were paid the least to start with. So how did the unthinkable become first thinkable, then doable, and finally—if we believe the CEOs—unavoidable?
The answer is that values changed—not the middle-class values politicians keep talking about, but the kind of values that helped to sustain the middle-class society we have lost.
Twenty-five years ago, prosperous companies could have paid their janitors minimum wage and still could have found people to do the work. They didn't, because it would have been bad for company morale. Then, as now, CEOs were in a position to arrange for very high salaries for themselves, whatever their performance, but corporate boards restrained such excesses, knowing that too great a disparity between the top man and the ordinary worker would cause problems. In short, though America was a society with large disparities between economic classes, it had an egalitarian ethic that limited those disparities. That ethic is gone."
If we are to restore the vibrant middle class economy America once had, you need to attack inequality (which means raising the value of work
#12 Posted by Thimbles, CJR on Fri 25 Nov 2011 at 02:45 PM
"Then, as now, CEOs were in a position to arrange for very high salaries for themselves..."
whatever their performance, but corporate boards restrained such excesses, knowing that too great a disparity between the top man and the ordinary worker would cause problems. In short, though America was a society with large disparities between economic classes, it had an egalitarian ethic that limited those disparities. That ethic is gone."
If we are to restore the vibrant middle class economy America once had, you need to attack inequality (which means raising the value of work and the power of workers) and corruption.
And the place you need to start is with those people who deceived the naive, the fraudsters.
Krugman knows this, he's seen "Inside Job". Why does he hesitate to label fraud as fraud?
#13 Posted by Thimbles, CJR on Fri 25 Nov 2011 at 02:48 PM
35 years ago, labor was worth something.
We made more stuff than we bought.
Now we don't.
It isn't complicated. If your economy is based on making stuff, then labor is king. If your economy is based on buying stuff, then traders are the kings.
The money goes to the king. That's just how it works.
The value of labor is further eroded by welfare programs that render sloth and ignorance among what used to be called the "working class".
For every 1 hour worked by an adult in a household in the bottom 20% of American households (by income), an adult in the top 20% works 11.6 hours.
And people wonder why there's "income inequality"? Seriously?
#14 Posted by padikiller, CJR on Fri 25 Nov 2011 at 02:52 PM
Sorry, I thought you were getting the specifics (instances, names, documents) on all those faulty CRA loans that crashed the economy. Did you get distracted?
Meanwhile:
http://www.iwatchnews.org/2011/11/22/7462/underwriter-uncovered-three-frauds-one-loan-suit-claims
"After Steinmetz uncovered evidence of fraud on loans submitted by a mortgage broker based in Florida, the suit said, one of her bosses became irate, telling her “you must approve these loans” because the broker was opening a New York office and he wanted to make sure it sent GreenPoint’s Manhattan branch “a lot of business. So do what needs to get done!”
The pressures became so intolerable, she charged, that she was forced into an “involuntary resignation” in June 2006...
In August 2007, with the mortgage industry in full-fledged retreat, Capital One closed down GreenPoint. It estimated that it would suffer losses of some $900 million as a result.
Steinmetz sued under the whistleblower protections of the Sarbanes-Oxley corporate reform law. Capital One denied her allegations, and argued she had no case under Sarbanes-Oxley, because she failed to show how the alleged lending frauds could have hurt shareholders.
The case was ultimately settled, according to a Capital One spokeswoman."
I think Barney Frank is to blame, don't you?
#15 Posted by Thimbles, CJR on Fri 25 Nov 2011 at 03:03 PM
Thimbles...
You're preaching to the choir, here.
If the "mortgage broker based in Florida" actually committed fraud... Throw the boot at him!
But I'm not seeing a name there (as usual). And one disgruntled whistleblower's accusations do not make a case of criminal misconduct, unless substantiated independently.
It is indeed possible that the purported $900 million in losses are entirely unrelated to the "fraud" supposedly committed by this broker. Indeed, if you believe the standard cry of the "advocates of government-endorsed redistribution of wealth" (who can no longer be called "commies" under Pravda's... er, I mean CJR's new comment censorship policy) then fraud makes money for corporations and their shareholders.
If that was the case here - if fraud actually happened and if the corporation actually made money - then how are the shareholders injured? The borrowers may have been injured. And the taxpayers were certainly injured (as they always are when the government meddles in business). But how were the shareholder's injured if they made money from the fraud?
The same is true in the vast majority of the "robosigning cases" - the reality is that in the vast majority of these cases the borrowers are not injured by the "fraudulent" signatures because they really are in default on their mortgages and thus legally subject to foreclosure.
Now does that mean that robosigning should be tolerated? No. Should the people be prosecuted? Of course.
But are the deadbeat homeowners entitled to damages? Not in the majority of cases.
#16 Posted by padikiller, CJR on Fri 25 Nov 2011 at 03:48 PM
http://abcnews.go.com/blogs/headlines/2011/11/fenton-man-chasing-dog-chasing-deer-unleashes-viral-video-meme/
Something to take serious.
#17 Posted by Clayton Burns, CJR on Fri 25 Nov 2011 at 04:47 PM
Or perhaps "something to take S E R I O U S L Y"?
#18 Posted by padikiller, CJR on Fri 25 Nov 2011 at 09:07 PM
You must be kidding.
#19 Posted by Clayton Burns, CJR on Fri 25 Nov 2011 at 10:54 PM
Of course not. We must presume innocence when it comes to your bankers friends. Though no one else merits this presumption, in fact we can assume and assert the CRA and government / GSE meddling was responsible for the crash and we assume and assert homeowners are deadbeats in the majority of cases and not the victims of systemic fraud, we must presume the banks are innocent and pure.
In fact, we should assume in all the tens of thousands of cases where the dog ate the bank's homework that the fraudulent party was the homeowners and that the robo-signing was just the way an honest enterprise does business when they've honestly misplaced their papers tens of thousands of times.
To presume otherwise is "advocacy for government-endorsed redistribution of wealth" that can no longer be referred to as "communist" under Pravda's... er, I mean CJR's new commenting censorship policy)".
We have to understand that [t]he law is there to coordinate the best interests of creditors, not provide rules and protection for debtors. It doesn't matter how often or brazen banks break the law or how perverse CEO's choose to set their incentives in order to loot shareholder value, steal investor funds, and mislead customers into bad credit. "[I]f the law is just there to protect creditors against the difficulty of collecting on debtors, not to provide a level playing field for those with debt, it makes perfect sense," to presume homeowners and government guilty and assume creditors and banks innocent.
But you'll forgive us if your double standards make every rational person dismiss what you say as worthless. We don't share your wall street rooted beliefs in undocumented innocence.
You people were either systemically corrupt or systemically incompetent. Either way, you don't deserve your jobs nor our money. And you will see the day we take them both back.
#20 Posted by Thimbles, CJR on Sat 26 Nov 2011 at 01:19 AM
Thimbles drones: It doesn't matter how often or brazen banks break the law or how perverse CEO's choose to set their incentives in order to loot shareholder value, steal investor funds, and mislead customers into bad credit.
padikiller responds: Of course this is silly.
I have repeatedly AGREED with you that crimes should be vigorously prosecuted.
But WHICH "perverse" CEO's committed WHICH crimes?
This is ALL I'm asking!
You give me some names and some proof that a crime actually occurred and I I'll write the U. S. Attorney myself!
#21 Posted by padikiller, CJR on Sat 26 Nov 2011 at 08:40 AM
Just to be clear...
The "83% fraud rate" we're talking about is from BORROWERS who lied to get mortgages at one WaMu office - specifically the evidence cited in the report states that "the loan fraud involved primarily “misrepresentation of loan qualifying data,” including misrepresentations of income and employment, false credit letters and appraisal issues."
Which has been my point all along.
Dumbass borrowers (including those who committed mortgage fraud) are most responsible for the mortgage meltdown.
The borrowers who can be proven to have committed fraud should be prosecuted to the fullest extent of the law - as should any lenders who can be proven to have done so.
The lenders who didn't commit fraud but who turned a blind eye to this fraud should pay for this stupidity with their jobs - and the investors who backed them should pay with their wallets - not the taxpayers.
#22 Posted by padikiller, CJR on Sat 26 Nov 2011 at 09:06 AM
"You give me some names and some proof that a crime actually occurred and I I'll write the U. S. Attorney myself!"
When someone finds a body that has been viciously murdered, you investigate the act and the names follow.
Here is an act worth investigating:
"In the spring of 2005, Darcy Parmer joined a team at Wells Fargo that was working on a plan to create a fraud detection report.
By doing queries within the bank’s computerized mortgage-application system, Parmer said, she and other fraud sleuths found a large number of duplicate credit applications submitted to various branch offices and divisions within Wells Fargo. It appeared to Parmer that loan officers were helping borrowers who’d been turned down for loans resubmit their applications elsewhere within the bank, inflating their incomes from one application to the next by as much as 100 percent.
The report, Parmer believed, was a great tool for sniffing out fraud. In 2006, however, management terminated use of the fraud detection report, Parmer said.Nothing was put in place to replace it, she said."
Find those queries, get the names of the loans officers, have them testify and turn over evidence on their managers, repeat until the higher officers and CEO who encouraged fraud and blocked investigations are indicted. That is the job of the justice department, not a journalist and some commenter on cjr.
The acts are there to be investigated. You just claim that we shouldn't investigate until our psychic powers can produce names before investigation. Psychic powers which are unnecessary when it comes to claiming guilt among borrowers (didn't see any names put down there), government (ditto), or the gse's ( wow, I'm sensing a pattern).
Lame, padi. Lame.
#23 Posted by Thimbles, CJR on Sat 26 Nov 2011 at 11:18 AM
Thimbles wrote: It appeared [whatever "appeared" means in the context of a criminal accusation] to Parmer that [unspecified] loan officers were helping borrowers who’d been turned down for loans resubmit their applications elsewhere within the bank, inflating their incomes from one application to the next by as much as 100 percent...
...Find those queries, get the names of the loans officers [but not the borrowers], have them testify and turn over evidence on their managers, repeat until the higher officers and CEO who encouraged fraud and blocked investigations are indicted.
padikiller responds: Once again... We've reached our usual reality disconnect. Not a name to be found.. Not an allegation of any particular crime to be found.
Just an "appearance" that unspecified people may have processed fraudulent applications from [unspecified] borrowers at some [unspecified] time... Maybe. Which is against what law, exactly?
Why not just email Parmer and ask her for the names of these people and the specific things she saw?
All we need are some names, and Parmer's the one who has them, right?
You're dealing with a disgruntled former employee embroiled in civil litigation... Don't you think you need to take these vague allegations with a ton or two of salt? Certainly the vague allegations of a financially motivated disgruntled former employee, standing on their own, cannot reasonably be calculated to form the basis of a criminal investigation here in Realityville. In Chittumland, perhaps.. But not here where we have that Constitution-thingie that forbids government witch hunts on the basis of vague allegations.
Look... For the fifty bazillionth time... I am NOT defending fraud. If actual fraud occurred, then let Parmer stroll into a magistrate's office and swear out a criminal complaint under penalty of perjury. This is the way prosecutions start.
And then nail BOTH the lenders AND the borrowers who committed fraud (if it's proven in a court of law after due process beyond a reasonable doubt).
But until you have some of that "evidence-stuff"... Spin down the rotors on your Chittum 5000 Black Helicopters...
#24 Posted by padikiller, CJR on Sat 26 Nov 2011 at 11:40 AM
"You just can't assume the weekly beheadings of gang members in Mexico are the work of rival gangs. Every instance of beheading is individual and unique and should not be construed as part of a pattern. And since there's no pattern, it's very difficult to even establish there was a crime. Mexico gets strong winds from time to time. Can you just assume every beheading is an act of law breaking violence? Sometimes these things are just acts of nature!"
This is bullshit.
And in other news:
http://www.nakedcapitalism.com/2011/11/peak-life-expectancy.html
"Once a floor standard of living is attained, people tend to be healthier when three conditions hold: they are valued and respected by others; they feel ‘in control’ in their work and home lives; and they enjoy a dense network of social contacts. Economically unequal societies tend to do poorly in all three respects: they tend to be characterised by big status differences, by big differences in people’s sense of control and by low levels of civic participation….
Unequal societies, in other words, will remain unhealthy societies – and also unhappy societies – no matter how wealthy they become. Their advocates – those who see no reason whatever to curb ever-widening income differentials – have a lot of explaining to do."
#25 Posted by Thimbles, CJR on Sat 26 Nov 2011 at 12:56 PM
The "economic inequality" of our society is a direct result of sloth and dependency.
According the 2010 census data, for every one hour worked by an adult in the bottom 20% of American households (by income), an adult in the top 20% works 11.6 hours.
And the relationship is linear across all of the quintiles.
More work done = more income earned.
Whodathunkit?!
The fix for "inequality" is simple - stop paying people not to work.
There! All fixed!
#26 Posted by padikiller, CJR on Sat 26 Nov 2011 at 03:24 PM
Yet another example of bullshit. Going for the consecutive record?
Because I thought you were busy getting some names, documents, and cases together to prove your CRA, GSE, deadbeat borrower financial crash theories.
Where's the beef, dude?
You can't claim that "The "83% fraud rate" we're talking about is from BORROWERS who lied to get mortgages at one WaMu office - specifically the evidence cited in the report states that "the loan fraud involved primarily “misrepresentation of loan qualifying data,” including misrepresentations of income and employment, false credit letters and appraisal issues.""
Without showing some documentation... like the source documentation quoted by the article that you obviously don't expect anyone else to read:
http://hsgac.senate.gov/public/_files/Financial_Crisis/FinancialCrisisReport.pdf
"The most significant example involves an internal WaMu investigation that, in 2005, uncovered substantial evidence of loan fraud involving two top producing loan offices in Southern California. WaMu management was presented with the findings, but failed to respond, leading to the same fraud allegations erupting again in 2007. According to the WaMu Home Loans Credit Risk Mitigation Team that conducted the 2005 internal investigation, it was initiated in response to “a sustained history of confirmed fraud findings over the past three years” involving the two offices, known as Downey and Montebello...
To conduct its inquiry, the WaMu Risk Mitigation Team reviewed all of the loans
produced by the two offices over a two-month period from August to September 2005, which totaled 751 loans. Analysts scored the loans using a standard electronic fraud detection program, and then reviewed all of the loans flagged for possible fraud, as well as ten percent of the remaining loans. A November 2005 memorandum summarizing the review stated that it found an “extensive level of loan fraud” caused primarily by employees “circumventing” bank policies:
“[A]n extensive level of loan fraud exists in the Emerging Markets [loan processing centers], virtually all of it stemming from employees in these areas circumventing bank policy surrounding loan verification and review. Of the 129 detailed loan review[s] … conducted to date, 42% of the loans reviewed contained suspect activity or fraud, virtually all of it attributable to some sort of employee malfeasance or failure to execute company policy. In terms of employee activity enabling this perpetration of fraud, the following categories of activity appeared most frequently: inconsistent application of credit policy, errors or negligence, process design flaws, intentional circumvention of established processes, and overriding automated decisioning recommendations. … Based on the consistent and pervasive pattern of activity among these employees, we are recommending firm action be taken to address these particular willful behaviors on the part of the employees named""
The people most often committing the fraud were mortgage brokers - both third party and internal - who did so because they were rewarded for loan volume, not loan quality. When you have pervasive white out showing up on documents and multiple versions of authorizing signatures, that is indicative of employees committing fraud not borrowers. Fraudulent borrowers don't need to forge their own signatures nor white out their own misstated income.
And when the reaction to internal reviews is nothing except the firing of compliance officers., you know that the fraud is part of the business plan.
High risk, High Volume, High Bonuses, somebody else's problem when it crashes,
#27 Posted by Thimbles, CJR on Sat 26 Nov 2011 at 08:20 PM
The only "bullshit" is to be found in the denial of the REALITY that the "poor" are putting in 11.6 times fewer work hours per week than the "rich" do.
The FACT of the matter is that for every hour worked by an adult in the bottom quintile of American households, an adult in the top quintile works more than 11 hours.
Facts are facts, Dude. You don't like it, gripe at the census people.
As for this fraud.... "Errors and negligence" aren't crimes. A "design flaw" isn't a crime. "Inconsistent application" of company policy isn't a crime. "Intentional circumvention" of company policy isn't a crime. And "overriding automated decisioning" isn't a crime.
Malfeasance? Sure. Crime? Nope.
The fraud we're talking about is BORROWER fraud - NOT lender fraud - ""the loan fraud involved primarily “misrepresentation of loan qualifying data,” including misrepresentations of income and employment, false credit letters and appraisal issues."
We're not talking about lenders misrepresenting loan terms or forging borrower's signatures. We're dealing with borrowers misrepresenting their credit worthiness and some employees who may have facilitated this misrepresentation.
Ultimately the borrowers inked the loan contracts.
Now violating a law? That's a crime. Show me some proof that some particular person committed some actual crime, and I'll call the prosecutor myself.
#28 Posted by padikiller, CJR on Sat 26 Nov 2011 at 08:44 PM
"The only "bullshit" is to be found in the denial of the REALITY that the "poor" are putting in 11.6 times fewer work hours per week than the "rich" do."
No the bullshit is found wherever you make claims about how long the impoverished work without considering mitigating factors such as medical status, available hours due to parenting responsibilities, old age, and lately the general lack of jobs.
Plus, you don't seem to factor in how incompetent crooks leech at the top are overpaid compared to the working class who've worked much harder, and have gotten pretty much nothing in increased compensation for it.
Work != Money.
Being a selfish leech == Money
"As for this fraud.... "Errors and negligence" aren't crimes. A "design flaw" isn't a crime. "Inconsistent application" of company policy isn't a crime. "Intentional circumvention" of company policy isn't a crime. And "overriding automated decisioning" isn't a crime."
Being party to fraud is a crime. If these loans officers knowingly falsified income
documents, filled in a "baby sitter's" salary as one "worthy of college presidents", entered false residency claims, inflated appraisal values (which they did since they blacklisted appraisers who wouldn't), misrepresented assets, and falsified credit information, they are prosecutable, no?
And if senior officers became aware of all this in 2005 and did nothing except give the offenders trips to Hawaii until 2007 then it's hard to claim they operated without knowledge of fraud either, no?
And if they were "cutting and pasting false names on borrowers' bank statements" in shops that were known as the art departments which had looped back fax machines so they could alter documents and process them as if they had been faxed as genuine copies, that poses a legal problem too, no?
Some borrowers were crooks who used a crooked system. Many many more people were victims of the crooked system, which was at times rigged by actual crooks.
But I disgress. It was your turn to produce evidence in the forms of cases, documents, and names which support your theories of innocent wall street and the guilty Community Reinvestment Act, GSE's, and borrowers.
How's that coming?
#29 Posted by Thimbles, CJR on Sat 26 Nov 2011 at 10:44 PM
Nice try...
It's not "my turn" to do anything.
Either you can name a specific person who committed a specific crime....
Or you can't.
If you can (and if you have proof) I'm on your side.
If you can't, you should just say so and deal with it.
#30 Posted by padikiller, CJR on Sun 27 Nov 2011 at 12:32 AM
Either you can name the specific persons who committed the specific acts....
or you can't.
If you can (and if you have proof) of deadbeat borrowers, GSE, CRA, HUD responsibilty for the crisis, then I'm on your side.
If you can't, you should just say so and stop lying.
Hey, its your reasoning. Don't complain.
(And yeah, I think the lead sales guy at Montebello who had a 287% above industry level default rate at a joint which had an 83% fraud rate merits investigation. As do all of these idiots who had whistleblowers sounding the alarms, which the chief executives claimed were all disgruntled employees, before all their banks collapsed. Like maybe, in the wake of all these idiot banks collapsing and the CEO's, like WaMu's, walking away from their wreckage with multiple retirement plans and a 100 million dollar payouts, maybe those whistleblowers were onto something. Maybe it would be nice if someone who wasn't a white collar wall street attorney, like Eric Holder is, would open up an investigation or two into these affairs before the statute of limitations expires. Maybe.)
#31 Posted by Thimbles, CJR on Sun 27 Nov 2011 at 01:52 AM
I mean really, if these were normal times and we saw a drop off in fraud prosecutions like we see now, we'd be curious as to why. Times are not NORMAL. Why, with all the financial wreckage lying around us, is NO ONE INVESTIGATING? Why is everyone SETTLING? Why are we keeping dangerous people in dangerous institutions so soon after they put our global economy IN DANGER?
http://www.nytimes.com/2011/11/08/business/in-sec-fraud-cases-banks-make-and-break-promises.html
"Please, please good sirs. Don't commit fraud again. I'd hate to have to get cross and raise my voice at you but this is the 4th time you've broken your promises to me. If you keep breaking your promise not to commit fraud, one day the SEC will have to refuse to take you at your word."
It's sickening.
#32 Posted by Thimbles, CJR on Sun 27 Nov 2011 at 02:16 AM
The investigations have been done, at least with respect to fraud as a contributing factor to the mortgage meltdown, and it isn't really complicated.
Borrowers lied to get mortgages that they shouldn't have gotten and some lenders either looked the other way or actively helped them get these mortgages.
This much is clear.
I'm all for rooting out ALL of these fraudsters, but doing so will nab a LOT more borrowers than it will lenders - though, as I have repeatedly stated, any lenders who actually committed crimes (e.g., forged documents or falsified statements) should be prosecuted vigorously. The trouble you "advocates for government-endorsed redistribution of wealth" (who can no longer be called "commies" under CJR's new comment censorship policy) have is that lender malfeasance and negligence aren't crimes, while borrower fraud is definitely a crime.
So... Since you are so outwardly, vocally and ostensibly concerned with the prosecution of fraud, Thimbles, and since lying on a government-backed mortgage application is unquestionably a CRIME punishable by a fine of up to a MILLION DOLLARS and imprisonment up to THIRTY YEARS, I assume you advocate investigating and prosecuting anyone who falsified their HUD-1 forms, right?
Of course you don't. Because your motivation isn't fighting crime. Or justice. Or even solving problems.
Your motive is just snatching stuff from the "rich" on "Wall Street" to create some crack dream of a collectivist utopian state where nobody works and the Gubmint doles out Snickers bars, Band-Aids, I-Pads, loft apartments and weed money to all.
You guys want to turn a blind eye to root cause of the problem - namely buyers who lied about assets, credit or employment to stick taxpayers with the bill for mortgages for which they did not qualify.
#33 Posted by padikiller, CJR on Sun 27 Nov 2011 at 10:08 AM
There are two types of mortgage fraud.
Fraud for property: in which a borrower provides fraudulent details in order to secure credit for an otherwise unattainable property.
Fraud for profit: in which people take advantage of weaknesses in the mortgage origination process to make money.
http://www.fdic.gov/regulations/examinations/supervisory/insights/sisum07/article02_staying-alert.html
Fraud for profit was the dominant form of fraud during the crisis. Fraud for property involves a borrower submitting false paperwork that they know won't be verified. If fraud for property was the dominant form, then there would not be paperwork problems we see right now. The papers would be filed correctly, the details would be incorrect, and the banks wouldn't require mass armies of robo-signers to clean up their mess.
But what we see is paperwork which is missing, signatures which are forged, applications in which details are whited out and replaced with incorrect information, signatures which are pasted from other documents and put through the fax to make false documents look like genuine ones, etc...
There is no way an honest enterprise full of dishonest customers would have so many problems with their paperwork. The problem was dishonest employees within a dishonest financial culture.
Instances like these were more typical of the industry than those involving good, absent minded lenders who were taken advantage of by bad "deadbeat" borrowers. That's what the FBI says, that's what the whistleblowers say, that's what Dean Starkman has said in his boiler room report, that's what the financial commission has said, anyone who has seriously investigated this crisis knows it was the professionals in charge of the process who used the process to defraud individuals and institutions to their profit.
So that all said:
"Since you are so outwardly, vocally and ostensibly concerned with the prosecution of fraud, Thimbles, and since lying on a government-backed mortgage application is unquestionably a CRIME punishable by a fine of up to a MILLION DOLLARS and imprisonment up to THIRTY YEARS, I assume you advocate investigating and prosecuting anyone who falsified their HUD-1 forms, right?"
Obviously. If borrowers lied on their forms and used fraudulent information to secure unaffordable credit, they should be prosecuted. And if borrowers and lending officers conspired together to submit fraudulent information, then they both should be prosecuted. However, the lender who conspires is the higher value target since the borrower is likely complicit in a single act of fraud whereas the lender will be complicit in hundreds, perhaps thousands of frauds. It is also more likely, when dealing with crooked lending agents, that the borrower is unaware of the fraud taking place.
Again, the lender is supposed to have systems and checks in place to determine borrower integrity and ability to pay back the loan. When employees circumvent these systems because they are compensated based on loan origination volume, and the upper management are disinterested in stopping it because they are compensated based on security sale volume, then they are both beneficiaries of systemic fraud for profit and they should be held accountable for that.
Investigation, prosecution, jail: that is what the corruptors of the system have earned. And I'd be saying the same thing if you could establish the corruptors of the system were millions of deadbeat borrowers, Freddy Mac and Fannie Mae, and the Community Reinvestment Act. But you can't do that and I can with the corrupt banks.
Deal with it.
#34 Posted by Thimbles, CJR on Sun 27 Nov 2011 at 02:38 PM
"beneficiaries of systemic fraud for profit and they"
should be investigated, prosecuted and put in jail, just like fraudulent borrowers, just like any corruptors of the system.
Your problem is you haven't been able to establish that the corruptors of the system were millions of "deadbeat borrowers", Freddy Mac and Fannie Mae, and the community reinvestment act whereas I've been pretty good at establishing that corrupt banks were.
Deal with it.
And since I got room for the links, this is a good read:
http://www.politico.com/news/stories/1111/67702.html
Thank god for Schneiderman and Biden.
#35 Posted by Thimbles, CJR on Sun 27 Nov 2011 at 03:01 PM
Honest banks full of honest employees who were tricked by tricksy borrowers don't use dishonest appraisers:
http://mobile.reuters.com/article/idUSTRE7AL1DU20111122
"New York's highest court allowed the state to pursue a lawsuit that accused First American Corp and its eAppraiseIT unit of colluding with the former Washington Mutual Inc to fraudulently inflate home values.
The Court of Appeals on Tuesday said federal law did not preclude New York State Attorney General Eric Schneiderman from pursuing claims alleging fraud and violations of rules meant to ensure independent real estate appraisals. It upheld a June 2010 ruling by an intermediate state appeals court."
Seriously, Schneiderman kicks ass.
http://www.thenation.com/article/transforming-liberal-checklist
#36 Posted by Thimbles, CJR on Sun 27 Nov 2011 at 03:23 PM
Thimbles wrote: Obviously. If borrowers lied on their forms and used fraudulent information to secure unaffordable credit, they should be prosecuted. And if borrowers and lending officers conspired together to submit fraudulent information, then they both should be prosecuted.
padikiller responds: Agreed.
And going one step further... If inept, incompetent or corrupt government officials are sandbagging investigations or prosecutions, then they should be fired too.
Of course you are wrong in ignoring the "millions of deadbeat borrowers" who either entered into stupid loan agreements or who committed actual fraud. Every stupid mortgage has a buyer's signature on it and the fraud referenced in the reports cited are all related to borrower qualification - not to any any misrepresentation by lenders regarding the terms of the loans.
The borrowers knew what they were doing - entering into a half million dollar ARM for a townhouse doesn't just happen on it's own. Multiply this stupidity time a few million government-backed idiotic mortgages and the result is obvious.
#37 Posted by padikiller, CJR on Sun 27 Nov 2011 at 03:59 PM
"The borrowers knew what they were doing"
Except when they didn't. If the loan originators were being completely upfront and open with their clients, then there would have been no need for forged signatures, fake documents, white out, false appraisals, etc etc etc..
And the crap these wise guys pulled on the elderly with over the phone HELOC loans was uglier than sin... which then got turned into securities which were sold to pensions.. The whole sewer of a system needs to be flushed.
Some borrowers deserve what they got and engaged in fraud because it was a means to an end. Other did so because they were counseled by their broker / sales associate to do so. Again they deserve consequences, but the onus of responsibility lies on the professional who encouraged it. And then there are the borrowers that thought they were getting fixed rate subprime and put their signatures, or had their signatures forged, on something else.
That was predatory and it was endemic. And there have been few to no consequences for the industries who wrecked the global economy. That is a real problem.
#38 Posted by Thimbles, CJR on Sun 27 Nov 2011 at 04:54 PM
The people featured in the seattle times articles here:
http://www.cjr.org/the_audit/seattle_times_reviews_wamu_hom.php
Are more typical than your "grifter borrower" type.
"Usually, Bob Houk's wife handled the family's money matters. But after being diagnosed with a brain tumor, she was in and out of the hospital, so he took over. In late 2006, he received a postcard with WaMu's logo on it.
Houk already had a 30-year WaMu mortgage at a fixed rate of 4.6 percent. But the postcard promised to lower the monthly payments on their Bainbridge Island home with an adjustable-rate mortgage starting at only 1 percent interest.
He liked the idea of cutting expenses. A son was in college, his wife was on disability from her job as a nurse, and Houk, a physician assistant at Group Health, worked only part time to be at her side.
Houk called the number on the card, reached an independent mortgage broker in California, and made all the arrangements over the phone. Soon someone came to his house with papers to sign. Houk was impressed at how easy the process was.
But a couple of months later, Houk noticed something on his monthly statement that gave him a sick feeling. Instead of one low monthly payment, there were now options. His minimum monthly payment of only $1,018 was there. But there were also higher-priced options for paying interest only or for paying interest and principal. Just covering the interest that month would cost him about $1,000 more.
The 1 percent interest rate Houk thought he was getting was only good for the first month. It had reset to 7.4 percent, nearly 3 percentage points above his previous WaMu loan. This was buried in the fine print in a sheaf of legal documents he had signed.
"Who in their right mind would give up a 4.6 percent loan?" Houk said. "I felt totally duped."
Houk said he called Washington Mutual, but the woman he talked to said nothing could be done. WaMu just gets the loan from the broker, he recalled her saying, so the bank's not responsible...
Terboss grew tired of his principal going up, but he couldn't afford the loan's interest-only payment of $4,100. Responding to a flier in the mail, Terboss called a broker who promised a new $720,000 option ARM from WaMu with an interest-only payment of $3,200 a month. Terboss kept the letter from the broker making this promise.
But what was promised was impossible. Terboss already had a WaMu option ARM loan. Paying the loan off and getting a new one put Terboss right back where he started. The only ones to benefit from a refinance were the broker and the bank.
Only later, when told by The Seattle Times, did Terboss learn the broker was paid an $18,000 commission on the loan.
When the monthly bill came, Terboss was stunned to discover it was $4,700 — $1,500 more than promised."
Stories like these are the more common type.
#39 Posted by Thimbles, CJR on Sun 27 Nov 2011 at 05:18 PM
Thimbles cited: "This was buried in the fine print in a sheaf of legal documents he had signed."
padikiller responds: Solution? Read first, sign second. ESPECIALLY the fine print.
Problem solved.
If you sign a mortgage contract on a house worth three quarters of a million dollars without knowing that reading the fine print is important... You should pay the dumbass penalty like this guy did.
#40 Posted by padikiller, CJR on Sun 27 Nov 2011 at 05:32 PM
The scary thing is that guy who didn't bother to read a three quarter of a million dollar contract before he signed it... And for some reason who honestly expected to pay only $1000 a month on a $730,000 mortgage... Can actually treat patients and write prescriptions out there on the Left Coast.
Now that's REAL scary when you think about it.
Well, I bet one thing's for sure... I bet this guy will never sign another contract without reading it! Repercussions lead to better citizenry and better society. Nothing teaches faster than the School of Hard Knocks.
If more people read contracts before executing them, companies that resort to fine-print will become marginalized, while companies that deal openly will prosper.
Finally... With regard to mortgage and settlement contracts... Just look at all the volume of fine print due to the Gubmint's meddling!... Getting the government out of the mortgage business would solve most of the industry's problems.
#41 Posted by padikiller, CJR on Sun 27 Nov 2011 at 07:27 PM
"The scary thing is that guy who didn't bother to read a three quarter of a million dollar contract before he signed it... And for some reason who honestly expected to pay only $1000 a month on a $730,000 mortgage... Can actually treat patients and write prescriptions out there on the Left Coast.
Now that's REAL scary when you think about it."
I agree. There were a lot of borrowers who didn't read their contracts because the contracts were too complicated, hiring a lawyer to stand over your shoulder was too expensive, and the reason they hired a mortgage broker was so that the broker would inform them of the details in layman's terms and they would just have to sign.
It's the same mentality people have when they click "I agree" on an iTunes upgrade before reading through to page 50 on the agreement - it's stupid and lazy, especially when we're signing for a half million or more in credit, but we're all guilty of being stupid and lazy when it comes to reading a 50 page document that which has language that confuses us on sentence 1 and we're supposed to sign it in the office while the busy mortgage broker is waiting and tapping his pencil.
There's no excuse for it, other than the Milgram experiment and stupidity, but it does beg the question - if these borrowers didn't read what they were signing, instead trusting the mortgage broker's counsel, then who filled in the false information (or altered the genuine)?
A lot of the time, you'll find it was the broker and in that scenario the borrower is guilty of negligence, while the broker was guilty of fraud.
There's no excuse for that. That's a criminal act that was knowingly engaged in which they knew would destroy someone's life.
As I mentioned before, being an easy mark for a mugging does not absolve a mugger of resposibilty for the acts he commits. Borrowers acted stupid, but that doesn't mean they acted criminal. It means they trusted very bad counsel.
#42 Posted by Thimbles, CJR on Mon 28 Nov 2011 at 02:17 AM
Thinbles wrote: There were a lot of borrowers who didn't read their contracts because the contracts were too complicated, hiring a lawyer to stand over your shoulder was too expensive, and the reason they hired a mortgage broker was so that the broker would inform them of the details in layman's terms and they would just have to sign.
padikiller responds: Contracts are a few pages in plain English - you don't need a lawyer to understand them. And if you are stupid enough to believe that you should "just sign" a contract a broker brings you, then you need to take a class from the School of Hard Knocks.
There are two different viewpoints here:
1. The viewpoint of the "advocates of government-endorsed redistribution of wealth" (who can no longer be called "commies" under Pravda's... er, I mean CJR's new commenting censorship policy). Under this viewpoint, people (including physician's assistants who make six figure salaries and who live in million dollar houses) are too stupid to be permitted to enter into contracts on their own. They need the Gubmint to make decisions for them.
2. The contrary viewpoint. People should be responsible for themselves and should both reap the rewards and also feel the consequences of their own choices.
The first viewpoint leads to dependency, sloth, oppression and corruption, by punishing success and rewarding laziness and stupidity.
The second viewpoint leads to a productive, free society, but punishes laziness and ineptitude.
#43 Posted by padikiller, CJR on Mon 28 Nov 2011 at 08:09 AM
Lovely framing, Padi. Not useful in the slightest, but lovely.
What we saw in the credit markets in the 90's and 00's was a result of less government interference as markets became deregulated and anti regulators were appointed to head regulatory bodies. People like John Reich of the OTS did nothing as WaMu and AIG blew themselves up, and their customers, under his watch with complex products that had explosion built into their design.
I honestly don't care what stops them from making these risky, fraud prone, ultimately non-productive instruments; whether it's investor pressure, consumer group pressure, or government pressure; the important thing is that the financial bullshit stops. Because far from becoming a "productive, free society" the idiot complexity has punched the global economy in the groin, making government assistance to the banks a condition for their survival.
So if you don't want government interference in the market and banks on taxpayer supported welfare, you'd desire a simple financial system which extends credit in ways that have predictable costs for the consumer and predictable risks for the global financial system.
And the self enforcement system in place right now doesn't appear to be acheiving that, so what do you suggest?
#44 Posted by Thimbles, CJR on Mon 28 Nov 2011 at 02:33 PM
Thimbles wrote: Because far from becoming a "productive, free society" the idiot complexity has punched the global economy in the groin
padikiller responds: You keeping talking about "complexity".. There is nothing especially complex about a three page mortgage contract written in English.
Dumbasses like this guy just went nuts.. Thinking they could pay $1000 a month on a $750,000 mortgage. Seriously?
There isn't any fraud here. No misrepresentation. Just greed and stupidity on both sides of the deal.
What we should be witnessing in natural selection and market education.
The dumbass borrowers who signed up for this crap should feel the pain, as should the dumbass lenders who issued these loans.
Instead, the Gubmint steps in to put taxpayers on the hook for it.
You take the government out of the equation and "complexity" won't be an issue.
#45 Posted by padikiller, CJR on Mon 28 Nov 2011 at 03:29 PM
[Dumbasses like this guy just went nuts.. Thinking they could pay $1000 a month on a $750,000 mortgage. Seriously?]
Do I want to read this? No.
However, I am not making a big deal out of it. You can't expect much better, considering the source.
What I am making a big deal about is your libel of me on this site, 'padikiller.'
If you apologize today, I may not make a formal complaint to CJR. (I have already mentioned it).
You need to tell me who you are, because in America everyone has the right to face his accuser.
You posted trash about me and then backed off and tried to say that someone else might have been wrong. That does not meet journalistic standards at all. It meets your pathetic standards.
I posted my e-mail address here to see if you would ask me any questions, but I have not heard from you.
You openly mock the reasonable standards at this site. Apologize today, or I am going to make a formal complaint about you to CJR.
#46 Posted by Clayton Burns, CJR on Mon 28 Nov 2011 at 04:02 PM
Speaking of the banks:
http://motherjones.com/kevin-drum/2011/11/how-2008-radicalized-us-all
"NOT SCANDALOUS — Lending vast sums in a banking panic.
DUBIOUS — These weren't penalty rates.
DEFENSIBLE — Erring on the side of activism.
THE REAL SCANDAL — Abandoning activism for the rest of us.
THE BOTTOM LINE -- Bolstering the status quo... Capitalism is supposed to have an evolutionary dynamic. Firms with sound business strategies survive and expand. Firms with unsound business strategies shrink and go bust... If ill-managed firms nonetheless survive, the system is broken in a fundamental way.
...[T]he Fed and Congress (kicking and screaming, but eventually doing the right thing) saved the banking system, and that had to be done. There's a certain amount of unfairness that's inherent in any banking rescue, and I can live with that when the alternative is a second Great Depression.
But hoo boy, what a contrast with how the rest of us were treated. Things like principal write-downs, second waves of stimulus, aid to states, and mortgage cramdown all got a bit of idle chatter but were then left to die. For some reason, it would have been unfair to hand out money to profligate homeowners, state and local workers, and the millions who have been unemployed for more than a year...
This is how 2008 radicalized me. It's one thing to know that the rich and powerful basically control things. That's the nature of being rich and powerful, after all. But in 2008 and the years since, they've really rubbed our noses in it. It's frankly hard to think of America as much of a true democracy these days."
Especially so, since those who have done little but 'serve the bankers to save the world' have been labeled "anti-capitulyst soushalists" for their efforts. low must a government bow to please the bankers, the Kochs, Mr. Bloomberg, and the public they influence? Is there a limit?
Does anyone else sense the idiot death spiral of a once great empire?
#47 Posted by Thimbles, CJR on Mon 28 Nov 2011 at 04:07 PM