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Justice Dept: every large bank in U.S. has committed mortgage fraud
You have to scroll down to get to the actual story, past the video thingy...to where it says "transcript"
and it is Bill Black who is speaking.
He says the Justice Dept. "does not understand" the fraud that took place.
I disagree...I think they understood all too well, and chose to not criminally prosecute.
Documents in JPMorgan settlement reveal how every large bank in U.S. has committed mortgage fraud
The United States government, now with the endorsement of the Justice Department, has said that after investigation it found that essentially every large bank involved in the secondary market sales to Fannie and Freddie committed fraud. And frauds and intentional crime. Right? So that's an extraordinary thing.
There were three of these epidemics of mortgage fraud that drove this crisis. Individually, each of the three fraud epidemics would have been the most destructive financial fraud in world history, but all three of them occurred at the same time and they're related. So the first two are in the mortgage origination phase, and that is what I've described in the past: the epidemic of appraisal fraud, led by lenders, and the epidemic of liars loans, also led by lenders and their agents. And that generated literally millions of fraudulent mortgages originated each year, most of which they sold to the secondary market. And since there's no fraud [incompr.] they had to, of course, engage in fraud in the representations and warranties--what we call reps and warranties for short--in the sale of these fraudulent mortgages through a further fraudulent representation to the secondary market.
So the first thing that we have is that there are admissions not just as to JPMorgan in this statement of facts, but also as to Bear Stearns and Washington Mutual. And collectively, of course, we're talking about three of the largest and most elite financial institutions in the world. And the Justice Department says each of these engaged in fraud, which ought to be sort of the headline news, right, that three of the largest financial entities in the world engaged in pervasive fraud.
Now, this is particularly remarkable in the case of Bear Stearns and in the case of Washington Mutual, both of them acquired by JPMorgan (Washington Mutual is called WAMU by most people for short), because they're infamous from past investigations. So the famous phrase used by the industry--remember, the industry used the phrase liars loans. That was not something that prosecutors came up with to try to bias juries. Well, the phrase in the industry was "Bear don't care", meaning that Bear Stearns could care less about the quality of the loans that it was buying in the secondary market, that it was most happily deceived and such. And Washington Mutual's infamous for the investigations that found that it was one of those places that did have a literal blacklist of honest appraisers who refused to inflate appraisals, in which WAMU refused to send future business to honest appraisers because it wanted to engage in this massive fraud scheme of inflating appraisals.
Okay. So we've got not just really big, really elite, but incredibly infamous places, and we're getting confirmation from the Justice Department and from JPMorgan, the acquirers of these entities, that says, yes, these two entities ran this fraud scheme in the secondary market sales. But, of course, there's also the same allegations against JPMorgan and JPMorgan conceding to these facts as well, which, of course, leads to the obvious question: why haven't these senior officers controlling JPMorgan, Washington Mutual, and Bear Stearns been prosecuted for the crimes? And if for some reason they don't think they can prosecute the individuals, why don't you prosecute the corporation instead of letting it get off scot-free, apparently, with no criminal case? So that's the big take away at this point.
http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=11102#.VoxLxJ_hBek.twitterThere were three of these epidemics of mortgage fraud that drove this crisis. Individually, each of the three fraud epidemics would have been the most destructive financial fraud in world history, but all three of them occurred at the same time and they're related. So the first two are in the mortgage origination phase, and that is what I've described in the past: the epidemic of appraisal fraud, led by lenders, and the epidemic of liars loans, also led by lenders and their agents. And that generated literally millions of fraudulent mortgages originated each year, most of which they sold to the secondary market. And since there's no fraud [incompr.] they had to, of course, engage in fraud in the representations and warranties--what we call reps and warranties for short--in the sale of these fraudulent mortgages through a further fraudulent representation to the secondary market.
So the first thing that we have is that there are admissions not just as to JPMorgan in this statement of facts, but also as to Bear Stearns and Washington Mutual. And collectively, of course, we're talking about three of the largest and most elite financial institutions in the world. And the Justice Department says each of these engaged in fraud, which ought to be sort of the headline news, right, that three of the largest financial entities in the world engaged in pervasive fraud.
Now, this is particularly remarkable in the case of Bear Stearns and in the case of Washington Mutual, both of them acquired by JPMorgan (Washington Mutual is called WAMU by most people for short), because they're infamous from past investigations. So the famous phrase used by the industry--remember, the industry used the phrase liars loans. That was not something that prosecutors came up with to try to bias juries. Well, the phrase in the industry was "Bear don't care", meaning that Bear Stearns could care less about the quality of the loans that it was buying in the secondary market, that it was most happily deceived and such. And Washington Mutual's infamous for the investigations that found that it was one of those places that did have a literal blacklist of honest appraisers who refused to inflate appraisals, in which WAMU refused to send future business to honest appraisers because it wanted to engage in this massive fraud scheme of inflating appraisals.
Okay. So we've got not just really big, really elite, but incredibly infamous places, and we're getting confirmation from the Justice Department and from JPMorgan, the acquirers of these entities, that says, yes, these two entities ran this fraud scheme in the secondary market sales. But, of course, there's also the same allegations against JPMorgan and JPMorgan conceding to these facts as well, which, of course, leads to the obvious question: why haven't these senior officers controlling JPMorgan, Washington Mutual, and Bear Stearns been prosecuted for the crimes? And if for some reason they don't think they can prosecute the individuals, why don't you prosecute the corporation instead of letting it get off scot-free, apparently, with no criminal case? So that's the big take away at this point.
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