And he doesn’t let Wall Street and the banks’ weak-sauce excuse stand, batting it down in the very next sentence:
Some lenders and investors who bought the securities say they were clueless about fraud and other problems occurring at the street level. But some other people find that hard to believe.
“They knew what the hell was going on and they didn’t care,” said Rodney Cubbie, a former federal prosecutor who, as a defense lawyer, has defended people charged with mortgage fraud. “They’d take these loans, bundle them and sell them off as investments” in order to spread the risk from future defaults.
Cubbie’s comments were not aimed at the Lytle-Valadez case but rather the overall attitude in the subprime mortgage market that lasted until it crashed in 2007. That hear-no-evil, see-no-evil approach allowed unscrupulous local brokers to game the system and feed the demand created by national lenders and securities dealers.
“If you’re going to prosecute any of these guys on the local level, you need to prosecute those guys too,” Cubbie said, referring to the national players.
Good stuff.
Attention, ambitious reporters in other states: the Herald and Journal-Sentinel series have set up a template for you. Apply it to your state and rake in the awards.
What's wrong with a convicted felon working as a mortgage originator? Unless he's on the run, he must have paid his debt to society. It's not like these people are working with kids or state secrets. What do you want convicted felons to do for a living? Spend the rest of their lives working at McDonald's?
#1 Posted by Mark, CJR on Thu 26 Mar 2009 at 08:53 PM
Mark--Flipping houses ain't flipping burgers.
There are are plenty of other non-McDonald's jobs out there that don't involve getting access to people SSN's, checks, credit, etc. in the process of them making the biggest financial decision of their lives. Not that somebody with, say, a one-time DUI ought to be ineligible. There just needs to be serious supervision here.
#2 Posted by Ryan Chittum, CJR on Sun 29 Mar 2009 at 10:23 PM