The FBI is examining 14 companies for possible fraud in the wake of the subprime mortgage crisis.
The FBI did not identify the companies…
Power and other senior officials said the number of suspicious activity reports they review for potential investigation skyrocketed from 3,000 in fiscal year 2003 to about 35,000 in 2006, to 48,000 in 2007. And in the first quarter of fiscal year 2008, Power said, officials have already received 15,000 such reports, putting them on pace to receive 60,000 complaints this year…
Kenneth Kaiser, FBI assistant director for the Criminal Investigative Division, said the FBI has developed an initiative focused on subprime mortgage loan fraud and is working with investigators from other federal agencies.
Officials identified the states that are the “top 10 mortgage fraud hot spots” as California, New York, Texas, Florida, Georgia, Utah, Illinois, Indiana, Ohio and Michigan.
Fraud is about the only possible charge. During the boom and bust in sub-prime mortgages, Congress and the White House refused to apply the same regulations that apply to bank mortgages – to the storefront hustlers and their investors.
They can’t be indicted for breaking laws that didn’t exist.
Probably not illegal, but Countrywide stuck it to me a few years ago.
They insisted on doing our homeowners insurance and property taxes “in escrow”, but mis-figured the escrow (based on our having paid into both before the refinancing that got them into our lives), and then turned around and re-did the escrow, taking as much as the government allows (instead of the “real” figure). The end result was a mortgage payment that was only a few dollars less than what we’d been paying when you added in the escrow….
Meantime, an “Equity Loan” doubled it’s monthly payment within six months or so. $200 instead of $100….
We still have a decent rate & payment, but if it didn’t cost so much to refinance again, I’d drop ’em in a second….
Regards,
Stu.
“The right answer is less government, less regulation, more individual responsibility, and more of the market dynamics that propel the rest of our economy.”
–Gov. Mitt Romney, Remarks At The Mackinac Republican Leadership Conference, Mackinac, MI, 9/22/07
Of course the largest offender and leader in the subprime lending market is gone, Ameriquest. They were bought by Citigroup.
http://www.innercitypress.org/ameriquest.html
And where is the founder and lead criminal of Ameriquest, he was appointed by Bush as the US Ambassador to the Neitherlands.
http://thehague.usembassy.gov/ambassador.html
Since this is a thread about the subprime issue and it is one of the reason the economy isn’t doing so well. And because there is a poll up in the top right of this page asking what I am going to do with the tax rebate. This question isn’t TOO OT.
The point of the tax rebate is to get the economy moving. So, instead of just handing out checks why not A. Put it on a debit card. B. Require that it be spent in X number of days. C. Require that it be spent on product built in the USA.
Unless the results of this investigation are not final until 2009 all the criminals will be let off the hook by their buddies currently controlling the government.
Now what am I going to do with the tax money if they actually give it to me. Send it to China. Probably go out and buy something I need that used to be made in this country before the greedy republicans were given free reign to send all product creation overseas.
There is enough blame here to go around to all levels of government, financial institutions and the Federal Reserve (the last doesn’t like to think of itself as a part of the government). The people that can least afford to, lost, and the people that should be punished are promoted or are bought out.
Why waste the FBI’s time investigating something that many saw coming.
Send your money directly to China, cut out the middlemen.
#5 qsabe,
It was Clinton, a democrat, that signed NAFTA and went all out for free trade during his admin. The DOW went from 3500 to 9000+ during his admin, I’m still shocked no one brings that up. That’s a HUGE uptick in 8 years. ENRON, the dotcom bubble and Arthur Anderson’s creative accounting were the cause of it. Ironic that all the SEC investigative paperwork on ENRON, etc. went up in smoke when WTC 7 collapsed. So, are there two political parties or just one? Now we are in this subprime mess. Do you really think a democrat or republican will “fix” it? Don’t hold your breath.
More evidence of the total catastrophic breakdown of the conservative ideology, which always pushes for less regulation. We had the Savings and Load crisis in the 80’s and now this. When will people learn that Republicans are bad for business?
No theory of wealth/economic/markets/growth etc work in their pure form–or pure theories about anything actually.
The real job is not to be a purist but rather to figure out how much regulation/promotion/balance between all the competing relevant interest should be.
Ron Paul?–a purist. NO GOOD.
Neo-Cons?–purists. NO GOOD.
Peta. Rich Regugs. No border Activists. Fundies. etc–the list is almost endless. Those so convinced of the truth that they refuse to compromise. Dolts.
A couple of issues that are going unnoticed in this whole debate.
1) This “pumping” of the economy is nothing new… Nixon did it before elections so the economy would be in his favor when voters went to the booth. (this is why the Federal Reserve chair appointment was offset from the presidential elections in future years… to keep the economy out of the hands of the politicians), It seems as though this administration has done an end run around this issue……… SPOILER ALERT….. The end result is much deeper, and longer recession.
2) When people are given “Tax Rebates” more often than not they will use it to pay down a Credit Card. Problem here is we also know (at least the Banks do) that within 18 months the card is back to where it was before the pay off.
Given the fact that MBNA is a huge contributer to the Bush administration could this be another hand out to “The buddies?” Now I don’t have any evidence that this is a planed situation but it sure seems plausible.
3)Where is the call for reform in lending practices, onerous Credit Card contracts, and Usury lending?
4) Did anyone else notice a few years back when Bush was pushing through bills that make it more difficult to file bankruptcy for individuals, yet not changing the same for business?
I’m Just say’n!
John, if you’re listening… Sounds like a great column!
After all the subprime lenders did to give the federal government stats for inflating the Gross National Product. Now they are the patsies being blamed for the collapse….
Re: # 2 Gary, the dangerous infidel
You nailed it Gary, with that quote, and it goes straight to the heart of American’s failed experiment with conservatism.
A smarter people would have driven the conservatives from our government after the failed S&L crisis. But we Americans have a painful (and expensive!) learning curve. It took the energy de-regulation disaster, Katrina and the wholesale selling off of the military in the name of the War on Terror to final make enough of us to wake up to the disastrous reality of having these goof balls in power.
At the very least, American should NEVER EVER put someone in government who doesn’t believe in government.
#12, Hey thanks, Greg. I knew someone would enjoy that one. Mitt even made it easy to nail him — it’s one of his prized quotes from his own campaign website. Romney is one of those who always sees regulatory oversight as the enemy of prosperity. Ironic, isn’t it?
#12 & 13, Greg & Gary,
I agree with both the point and the sarcasm.
This may be Romney’s platform today, trying to win over all the conservatives and attempting to get some rich donors. If he ever gets the nomination though, look for this not to be mentioned.
You know what scandal could have been avoided or lessened with a little more oversight? The rampant bribery and corruption in the USOC surrounding the Olympics in Salt Lake. I believe the guy in charge of those Olympics was named Mitt Romney …