You may recall that the world-wide financial collapse four years ago was entirely the fault of irresponsible mortgage seekers who demanded houses they couldn’t afford. In other words, the little people did it. Remember that?
Since then – and while a whole passel of criminals who posed as investment bankers, ripped off their investors and made themselves obscenely rich, continued to enjoy their summers in The Hamptons – our Justice Department has been distressingly silent.
But lo, at last.
Federal prosecutors hit Bank of America with a $1 billion-plus civil mortgage fraud lawsuit Wednesday, accusing the banking giant of engineering a scheme that defrauded federally-backed agencies during the national financial crisis.
The complaint . . . accuses the bank of using a loan-origination program called the “Hustle” to process mortgage applications at high speed with little financial checking . . .
The result was defective mortgage loans that defaulted after Bank of America sold them to federal mortgage loan guarantors Fannie Mae and Freddie Mac, causing more than $1 billion in losses and thousands of foreclosures . . .
“Countrywide and Bank of America made disastrously bad loans and stuck taxpayers with the bill,” said Manhattan U.S. Attorney Preet Bharara . . . [they] systematically removed every check in favor of its own balance – they cast aside underwriters, eliminated quality controls, incentivized unqualified personnel to cut corners and concealed the resulting defects,” said Bharara.
Yeah.
You can have wealth concentrated in the hands of a few, or democracy. But you cannot have both.
Whatever Works 
And this bit of political chicanery shifts any blame from the hustlers and grifters who sought those mortgages in the first place how? Not, mind you, that I have a problem with busting those institutions which aided and abetted this crime.
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By hustlers, do you mean the individuals who bought houses they couldn’t afford? If so, you know perfectly well that until very recently no fiscally responsible institution would lend that money to people who were bad risks because they knew that would break them when te loans weren’t paid back. But when they transferred the risk and saw all those suckers and all those fees out there for the picking . . . I think that’s more htan aided and abeted jonolan. I think they were the primary criminals. In matters of consumer fraud or lying to your investors, the victims aren’t the perps.
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I can’t think of the hustlers who took out loans they couldn’t afford as victims, Moe, any more than I can feel too much sympathy for people who build or buy on reclaimed bottomland and later get flooded out – to use a common Florida example from my youth.
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Differenece there jonolan was that those suckers paid for the land (which back in the 50’s wasn’t even reclaimed and never could be built on) because they were able to. No one gave them a bill of sale without a thought of whether they’d be paid back or not because the seller intended to shift the risk elsewhere.
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Wow … when did this news come out?
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They’ll settle and move on…
But a Good Headliine though…
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Talk about funny, like the bankers were actually able to put the screws to the taxpayer without the aid of the federal government.
“The creature from jeckyll island” Chapter 2
The name of the game is bailout.
“Sometimes it is said that man cannot be trusted with the government of himself. Can he, then be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question.”
Thomas Jefferson
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TFT – they first screwed their customers, and then us. All gov’t did was clean up the parts of the mess that landed in its lap. Bush had to nationalize Frannie and Freddie in ’08 thanks almost entirely to Countrywide/BofA.
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Moe- are you that blind to not realize that they are bedfellows? The 1% isnt a boogeyman, its real. Unfortunately the people who decry them dont have the ability to realistically point this out to the average joe. That is why many of us just play the game rather than try to change it. 😦
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Oh, they’re real alright. They’re the real makers and builders of America. It’s only the class warfare and hateful fiction the Libs have crafted that is the boogeyman.
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@jonolan
Looking at your building right now its a miracle it is still standing. Oh, wait, thats right, the chinese are holding it up.
The vast majority of 1% ers dont care about Nationalism. That is left for the conservative bloggers to crow about with the odd sprinkling of libs in there for good measure. 😉
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You most obviously have exactly no clue whatsoever about who makes up that 1%. Learn first, then speak.
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I wonder if the justice department will go after those that took advantage of Countrywide’s lending abilities. You know, people like Jim Johnson, Franklin Raines, Chris Dodd and Barack Obama to name a few.
Let’s forget that fact that BoA is being scammed by the government after they where forced to buy Countrywide to try and cover up the collapse, watch “Breaking the Bank” from Frontline (http://www.pbs.org/wgbh/pages/frontline/breakingthebank/).
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Chris Dodd proved to be a perfect sleaze along with his buddy Mozilla (Morilla?). He managed to slide out of the Senate ethics examination intact and is now a happy, rich, lobobyist. It’s the American way.
I haen’t seen that Frontline. I’ll go watch it.
But just because one or a hundred people are sleezy, that doeesn’t let anyone else off the hook.
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Speaking about Chris Dodd makes me wonder what the motion picture industry needs to cover up that led them to hire Chris for the old Jack Valenti mouthpiece job. b
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Jim, I dont think he’s there to ‘cover up’ anything. He’s there as a lobbyist pure and simple to push policies that benefit the industry he works for. Just like Valenti – it’s all Armani suits, feeling important and making bundles. And when these peole come out of our Congress, it sickens me.
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Admittedly I think this might be at least in part politics, but it may also be the first of a series of the kind of actions.
I’ve heard the whole, the banks were forced to make bad loans by either corrupt or naive liberals, and then it crashed.
That whole notion seems hard to believe. I think business capture regulatory agencies for their own purposes far more often than they are bullied by them. If a regulator is bullying a business it most likely because another business is using the regulator to bully its competitors.
The banks as villain line cab be overstated, but at best banks and homebuyers were both deluded to think house prices would always increase. The banks figured worst case, they foreclose on houses and reclaim their money and earn some fees in the mean time. Beyond that was the government to bail them out, and: it did!
Banks were hardly victims.
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“I think business capture regulatory agencies for their own purposes far more often than they are bullied by them.” I think you have that exactly right Bruce. While there were certainly individuals who abused the system – aren’t there always? – the sheer scale of the disaster came from industry practices, not the least of which was how undercapitalized they’d become.
I certainly remember the S&L crisis/scandal of the late 80’s, which was entirely a matter of banking crimes. Those responsible were being sent to jail in the dozens, and pretty quickly too. One of the biggest was Charles Keating and the guy got many years in prison, not a slap on the wrist or ‘just a fine’.
That’s what’s missing this time.
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