Gee. Ya Think?
Mar 11th, 2008 at 5:48 am by Susie
It’s becoming clearer by the day that many of these mortgage companies were engaged in fraud as a matter of routine:
WASHINGTON — Federal investigators probing the business practices of Countrywide Financial Corp. are trying to figure out what Countrywide knew — or in some cases didn’t know — about the incomes and assets of thousands of its borrowers.
The investigators are finding that Countrywide’s loan documents often were marked by dubious or erroneous information about its mortgage clients, according to people involved in the matter. The company packaged many of those mortgages into securities and sold them to investors, raising the additional question of whether Countrywide understated the risks such investments carried.
“…fraud as a matter of routine…”
This should be posted on billboards. I have been personally involved (full disclosure: IANAL) with 6 of these troubled mortgages, and there was fraud in every one of them.
Every one.
From the blatant: altering income, and/or interests rates, presenting borrower with a disclosure of terms summary that did not reflect the actual terms in the (extensive) paper work, to more subtle alterations; inflated property assessments, paperwork written in such dense legalese that even real estate lawyers had trouble deciphering the misrepresentations. The former was used on people of such unsophistication, many of whom were “buying their first home” (translation: being swindled out of their savings), that the lenders had to have targeted them for this fraud.
The real estate bubble wasn’t even very large in my area, and I’ve just been involved in a few of these things. Not one has been on the square. My friends, who are lawyers, tell me that their experiences are similar.
It takes a lot of work and time to untangle some of these frauds so what has been found so far is probably just the tip of the iceberg.
Countrywide just bought my mortgage from the bank that refinanced the loan.
Am I in trouble?
And as the bad loans come home to roost, guess who suffers and who doesn’t. As the mother of all meltdowns looms, Fed bails out banks, while homeowners cash out 401k accounts. Nothing better illustrates the brutal economic asymmetry of the Bush years than today’s headlines: Homeowners who can’t make their payments either walk away from their homes or throw good money after bad in an attempt to hold on, mortgaging their futures to save their mortgages. In contrast, banks that can’t raise capital can now borrow $200 billion from the Fed, unloading their bad debt on the Fed as collateral.