Sure. But is that fraud?
Notice how he allows for the possibility that borrowers would lie on their applications because the lenders would appear insensitive if the required proof, and chastised by activist groups, yet the fault is only that of the lenders. None of it, the borrowers.
There is shared blame.
Not sure what paperwork Ms Tavakoli is referring to, but this might back you up:
http://voices.washingtonpost.com/ezr...raud_in_t.htmlAnd it’s not something that happened last week. It happened when these loans were originated, in some cases years ago. Loans have representations and warranties that have to be met. In the past, you had a certain period of time, 60 to 90 days, where you sort through these loans and, if they’re bad, you kick them back. If the do entation wasn’t correct, you’d kick it back. If you found the incomes of the buyers had been overstated, or the houses had been appraised at twice their worth, you’d kick it back. But that didn’t happen here. And it turned out there were loan files that were missing required do entation. Part of putting the deal together is that the securitization professional, and in this case that’s banks like Goldman Sachs and JP Morgan, has to watch for this stuff. It’s called perfecting the security interest, and it’s not optional.
Willfully accepting fraudulent claims of ability to pay a mortgage could be considered accomplice to fraud.
The bigger question is why the lenders are now following the federal rules for mortgages scrupulously after they essentially ignored them during the bubble?
The lenders have and have had many means to protect themselves from borrower fraud, they refused, millions of times, to use those means.
Sure. I've said so all along. Or were you talking to b_d.?
And their lack of protecting their financial status means they should fail, rather than being dubbed as "too big to fail."
Rewarding such activity will just cause more of it.
If true, this seems to undercut your fiat assertion that banks are responsible for 90% of the fraud.
That part was more for b_d. Like I pointed out, his take is that it is never the little guy. Always the big 'evil' corporations.
I agree, but I have a feeling that "letting banks fail" (i.e., subjecting banks to the government's resolution authority) will be met with aggrieved cries of "nationalization," even though that's just how we faded the S&L crisis.
Regardless, I think we would be better off fighting those demons than the ones we have now.
Interesting. That's not what I'd have expected you to say.
We have those advocating nationalism already, and we already fight against it. What's one more demon in that category? Why allow bad business models to live? How many times do I take the position that if something cannot stand by merit, then let it fail? Why would this surprise you when I must pick the lesser of two evils?
Ideological rigidity was an option. Glad to see you resist it in this case.
no, it doesn't.
The foreclosure fraud is different from the fraud at the time writing the mortgage, which is where I read the fraud is 90% on the lender side.
btw, much of the problem with the bubble was non-bank (non-regulated) lenders. The big banks were gettting cut out of that action, so they created non-regulated lending subsidiaries to get in on the bubble action.
That wasn't clear contextually. Thanks for the clarification
Except for a very small percentage of mistakes, are any foreclosure notices going out to people who are paying? The notices may not have legal force because of errors, but once the paperwork is found, how many will be shown not to be valid?
WC: one reason banks faked the paperwork (other than reasons of expediency) was precisely because of the difficulty of reconstructing the chain of le.
I don't doubt that one bit, and like I said, those responsible need to be caged.
Fly by night lenders, incessant flipping and a flawed ling process means in very many cases the chain of le cannot be reconstructed.
Then they don't have a valid claim against the home. Maybe people will get off with a clear le in the end. Not sure how that works, but possession does have something to do with claims.
I will contend that whoever let the paperwork process fail, should be the one to carry the loss.
The problem is that the lenders have the red-carpet treatment, filing thousands of claims a day with seemingly little to no oversight (at least until this was brought up to light), where the little guy has to navigate a sea of bureaucracy and spend the money they don't have in lawyers and the like to contest anything.
They shouldn't get that red carpet treatment, should they? There are already legal standards in place. If they violate the process, they should be the losers. When the politicians stop protecting these people with new laws and regulations, maybe we can get some proper resolve. Still, with the way the media treats everything, the politicians responsible for protective laws go unchallenged. If we had real journalists, the public would know the truth. However, real journalism too, died years ago in the mainstream.
Link? I saw where Axelod said they should proceed with foreclosures because of the ones where the banks have valid paperwork but thats not what you're saying.
I meant Axelrod. (I think it's fair to assume he had Obama's ok to say what he did.) He's spinning this as a paperwork problem rather than incompetence and fraud. I'll dig up a link for you.
Axelrod did suggest there exists a "valid basis" for the foreclosures when in fact that's exactly what's at issue. He's begging the question and in so doing, spinning on behalf of a more or less corrupt banking system.
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