Here’s a fascinating story about the prosecution of people who defaulted on liar loans they obtained in 2006.
The U.S. Attorney accused of them of mortgage fraud, and the defense attorneys – some appointed by the state – made the case that banking executives intended to make fraudulent loans.
The defendants were acquitted.
Click on the link below for the full story:
Hat tip to daytrip!
Really I have to agree with the judge on this.
In 2005-6 mortgage companies were blasting out the message to come take their loans $1500.00 will get you in a new home with a 1000 dollar a month payment (these were pasted on giant billboards all down the I15)
Our Sales Manager said that the next product was going to be “Stated FICO”. He wasn’t too far off how ridiculous it got.
The lenders encouraged the shady business.They just wanted to please wall streets appetite for loans to bundle. they made money once the loans were sold.
Once they opened the floodgate everybody saw a house as a meal ticket and get rich quick scheme.
A dude came over and changed my windshield a few months ago and he said he lost 3 homes cause of angello.
everything worked for awhile until valuations just got crazy and they ran out of buyers.
Angelo made it worse by tweaking the neg-am loans to re-cast in five years instead of ten. It made the projected yields fly off the graph, and Wall Street couldn’t get enough of them.
At least half a dozen of my employees making around $50k per year bought $500k houses, and I never got a single wage verification request. Two of them left escrow with checks. They were paid to buy the house.
Got to spread some blame to the Fed as well,
There is no way in heck they did not know what was going on.
This happened the way they wanted it to.
They sure didn’t look too hard.
Think of the government’s case against Angelo Mozilo. He was selling $17 million in Countrywide stock every five days for months while telling shareholders everything was peachy. Yet today he is playing golf every day while sitting on a half-billion.
It’s America now – get as much as you can, for as long as you can. Hope the stink doesn’t reach you later.
At least there is one final chance to claw back some of the half-billon:
http://www.bloomberg.com/news/2014-08-20/countrywide-s-mozilo-said-to-face-u-s-suit-over-loans.html
I think given the overall cost to BofA they stand a very real chance of recovering something. We can always hope – it’s not going to put him out in the street but maybe it could put a dent in his kids’ inheritance?