Sunday, May 3, 2009

It really was that bad

Excerpt: Though the FBI warned of an "epidemic" of mortgage fraud in 2004, they subsequently made a "strategic alliance" with the Mortgage Bankers Association, which [former S&L scandal investigator William] Black calls the "trade association of perps."

Indeed, as much as 80% of the fraud during the boom was "induced by the lenders," who either encouraged people to lie on loan applications or actively altered documents to make them more likely to be approved, says Black.

How extensive was the fraud?

"There was the appearance of fraud or misrepresentation in almost every file," Fitch Investors declared in late 2007 after reviewing non-performing sub-prime MBS (the same stuff they, S&P and Moody's rated triple-A).



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