And actually, that same year, in 2007, the FBI forms what it calls a partnership with the Mortgage Bankers Association — the trade association of the perps. The Mortgage Bankers Association set out — imagine the audacity — to con the FBI, and they succeeded! They ginned up this fake definition of mortgage fraud under which the lending institution was always the victim and never a perpetrator. The FBI bought into this hook, line, sinker and the boat they rode out in. Holland: Right. Conservatives are convinced that the Community Reinvestment Act played a major role in the bank fraud that caused the Big Recession of 2008, despite a dozen studies showing that it did not, and it’s like a zombie myth. You can stab it and you can shoot it and it just keeps walking. Black: Look at liar’s loans — these are the loans where you don’t verify the borrower’s income, and the industry’s own experts said that these loans were 90 percent fraudulent. Study after study after study has shown that it was the lenders who put the lies in liar’s loans — the lenders and their agents — and nobody ever made a bank make a liar’s loan. It has nothing to do with the Community Reinvestment Act. Because the purpose of it is to inflate the borrower’s income, it takes you out of Community Reinvestment, and no entity — and this includes Fannie and Freddie — was ever required to purchase a liar’s loan. In fact, [liar’s loans] didn’t qualify as credit for affordable housing goals because you didn’t verify the borrower’s income. So after all these warnings from the industry’s own anti-fraud experts about them being 90 percent fraudulent, and the fact that even the Bush Administration anti-regulators said, “Don’t do these things,” the industry, between 2003 and 2006, increased liar’s loans by over 500 percent. By 2006, 40 percent of all the home loans made that year and half of all the loans called “subprime” were liar’s loans. Remember, there’s a 90 percent fraud incidence in all of this. That means there were over two million fraudulent loans made in 2006 alone.
Posted on: Thu, 19 Sep 2013 21:45:12 +0000
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