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Response to Tansy_Gold (Original post)

Mon May 21, 2012, 11:12 PM

13. Mortgage and Securitization Fraud: Where Is the Task Force? By Dean Baker

 

ISN'T THAT ERIC SCHNEIDERMAN'S NEW GIG?

....A serious investigation would start at the bottom and work up. It would find offices where many of the especially bad mortgages were issued. The investigators would question the mortgage agents about how so much false information ended up on loan forms.

After scaring some number of mortgage agents into talking, they would then talk to the branch managers. If they got two to three branch managers to acknowledge that they had pushed such agents to falsify information, they would then press them to reveal how they decided to engage in mortgage fraud. This practice could lead to the top levels of the bank.

The same policy could be followed with securitization. There have been enough emails uncovered and public statements from insiders to know that some people within the major investment banks knew that many of the mortgages that they were securitizing were fraudulent. It is, of course, against the law to deliberately pass on fraudulent mortgages. It is also against the law to ignore clear evidence of fraud when rating these issues, as appears to have been the practice of the bond-rating agencies.

In short, it seems that there was a lot of crime here, but not much effort at enforcement. In its first three years, the Obama administration did almost nothing to investigate criminal practices that contributed to the bubble and the subsequent meltdown. The attorneys general settlement on robo-signing in January called for a task force to be headed by New York Attorney General Eric Schneiderman.

Almost four months later, there is little evidence that this task force is making much progress. For example, if someone wanted to contact the task force to report evidence of fraud, they would certainly have a difficult time surfing the web to find a phone number to call or an email address....

IT IS, IT IS SCHNEIDERMAN'S NEW GIG!

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LineReply Mortgage and Securitization Fraud: Where Is the Task Force? By Dean Baker
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