To Semper (above), thanks for the insight from the enforcement comunity’s perspective.

The economoy is going to tank in a big way and these “stimulus” plans are doomed to fail because Americans are drowning in debt. That the economy is tanking is shown by the fact that subprime default rates are in the stratosphere and Alt-A (near prime) rates are rising. More alarmingly, default rates are also climbing in auto loans and credit cards (and the average American family has $9500 on those cards). IT’S A DEBT CRISIS, NOT A CREDIT CRISIS!!

I work with the FBI on economic crimes and know that this is why they were not more active in these cases: First, most of the agents that worked on white collar crimes were transferred to terrorism and homeland security after 9/11 and they have never been replaced. Second, the secondary market for mortgage-backed securities dilutsd liability for bad mortgages and makes it very difficult to determine who owns the notes. During the salad days of the housing bubble, fraud was not seen as a big problem because it was such a small percentage (they thought!) of total originations. So even if the FBI managed to figure out who owned the note, the lenders who misjudged the severity of the problem were also –frequently — too busy to be bothered to cooperate or to respond to FBI subpoenas. Without a cooperative “victim” these cases have a very small chance of succeeding. Finally, given the lack of communication and the fact that so much fraud was given the wink-wink-nudge-nudge treatment by lenders (the stated income “liar loans” and “no doc/no verification” loans are a case in point), given the amout of work needed to develop a criminal case, and given that the standard of proof requires that the prosecutor convince a jury that the lender was taken advantage of, most federal prosecutors said “no way!” except in the most egregious cases. The FBI depends on the federal prosecutors to take its cases to trial. If the prosecutors are not willing to do that (and there are way too few of them as well), why should the FBI spend its scare resources on a case that will never go anywhere?

This is the biggest cluster-you-know-what since the Great Depression. We’ll be lucky if all we get is a recession.

I would love to see many of the individuals that harassed me as an underwriter getting some striped “jeans and t shirts, serves them right.

While painful job wise at the moment, I see better days ahead, with more respect for “doing the right” thing (which I always fought for) instead of looking the other way.

We are fortunate to life in a free media society but do not overlook the fact the media reports only what they are allowed to know, what they are led to believe, and what they think they figured out based on the misinformation made available to them.

That may be why we only hear reports of symptoms sometime dressed up as the cause, but more often than not does the public does not hear the real cause.

Regarding the current mortgage and housing crisis, your quote from Mike Whitney above says it all. To anyone with knowledge of the mortgage banking industry, it should be obvious that a major part of the cause is many of the nations mayor lenders enticed third party originators
to “doctor up” unqualified individuals and families wishing to own a home and make them appear as qualified.

The perfect racket for the major lenders who can put the blame on the local loan originators if needed, while enriching themselves, and their co-conspirators, then cashing out by closing down or selling and walking away when the pyramid collapses. All culprits get paid up front. The public takes the loss when borrowers default.

Easy to understand greed is the culprit, but hard to understand the absence of moral resposability in the executive levels.
Maybe the Mafia gone main stream. Maybe the elite business schools are not emphsizing integrity and morals in their curriculums.

The last point is: Who is keeping the authorities from intervining? All loans, good or bad, has evident documentation. not hard to build cases.

Maybe the “didn’t know” excuse works at executive levels. I only whish it worked in traffic court.

People had home loans that should have never been able to buy houses to start with.

When you get a loan … the rates are EXPLAINED. Most of these people knew that their rates could go up, they either didn;t care or thought they could just get another loan.

Another problem is many of thes epeople also went on huge spending sprees on home equity lines … stupid people are stupid people and the taxpayer should not have to pay for people who are just dumb.

‘The money that you make illegally using my money, is my money’.

The ‘mainstream’ media have failed in their duty as the Fourth Estate. So the Fifth Estate has done the job for them, and has arguably, therefore, started to replace the Fourth Estate.