Monday, December 21, 2009

And now the Huffington Post looks at the rampant mortgage fraud

You know, the one that began the financial collapse into the Great Bush Depression. Who they look at and the details they present may be new, but the big picture remains the same.
In its headlong rush to grow, Long Beach Mortgage, like most subprime lenders, tossed aside its tried-and-true tools for identifying risky borrowers and catching fraud in the form of falsified loan applications. As part of the company's business plan, the lender required little or no documentation from borrowers or allowed alternate forms of documentation, such as credit letters from landlords, that could be faked or forged.

Independent mortgage brokers recruiting new borrowers for Long Beach loans treated the policies as an invitation for fraud, former employees said. "A lot of brokers were forging a lot of that. They were making up pay stubs and presenting that," said Karan Weaver, who, as an underwriter in Long Beach Mortgage's Atlanta office, said she would reject such loans. "We did see falsified pay stubs and tax returns."
And the top management of these companies encouraged this atmosphere of fraud to maximize the quantity of loans and the profit, knowing they would be shipped and sold far away before they crashed and burned. Until there were too many for even the world economy to support.

And the rest of us are still waiting for the perp walks to begin.

Comments:

Post a Comment

Subscribe to Post Comments [Atom]





<< Home

This page is powered by Blogger. Isn't yours?

Subscribe to Posts [Atom]