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Federal judge: Why have no high-level execs been prosecuted for housing crisis?

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Mortgage Professional America | 02 Jan 2014, 08:27 AM Agree 0
Why haven’t any high-level executives been prosecuted for their roles in the financial crisis? That question, long asked by ordinary citizens in the wake of the mortgage meltdown, is now being asked by a federal judge.
  • Griff | | 02 Jan 2014, 09:07 AM Agree 0
    Sound argument!
  • PacFore | | 02 Jan 2014, 09:07 AM Agree 0
    kind of an ignorant question to ask. Since when do we go after the rich and powerful?
  • Mikey H | | 02 Jan 2014, 09:13 AM Agree 0
    Why hasn't the fed prosecuted any politicians for the housing crisis?
  • Brad Peterson | | 02 Jan 2014, 09:31 AM Agree 0
    Because the people who oversaw/allowed the banking and finance mistakes were US Senators. The banks (i.e. high level execs.) were acting within the law. Richard C. Shelby and Christopher J. Dodd, both US Senators, were heads of the banking and housing Senate committee from 2003 -2010. These two men were responsible for overseeing banks and making sure they were not lending irresponsibly. How they let the "option-arm" and negative amortization products get to the marketplace is beyond me - but they will never be prosecuted for it. In fact, Dodd was chartered with Frank to make our new legislature establishing new banking rules, along with the renegade agency CFPB, daily. Yes, it is hard to believe, one of the people responsible for allowing banks to propagate "doomsday" products has been tapped to re-write our Federal Financial Policy. Another perfect example showing the inefficiency of our federal system.
  • Bill M | | 02 Jan 2014, 09:54 AM Agree 0
    I agree that the Lenders involved could not have perpetuated the the origination of questionable mortgages without the cooperation of of our elected leaders and the greed of the people running FHLMC and FNMA. Any investigation has to start with Dodd, Frank and even Clinton for removing mortgage backed securities and derivatives from SEC regulations.

    The option ARMs including negative amortization in fact helped many people for many years until property values plummeted because the government wanted everybody to have a home whether they could afford it or not. That caused the securities issued to become worthless and began the crisis.
  • Doug | | 02 Jan 2014, 11:41 AM Agree 0
    In addition to congress, regulators, ratings agencies, lenders, Fannie Mae and other investors, maybe we should also punish consumers who borrowed money to speculate on increasing home prices. Then again, if we were to punish everyone who contributed to the housing crisis, at least half the population would be in jail.
  • Stan J | | 02 Jan 2014, 12:17 PM Agree 0
    The authorities have realized for some time that it is best not to kill the proverbial goose by allowing the perpetrators to continue business as usual generating billion dollar cash flows so that the "regulators" could step in from time to time for a multimillion dollar shake down in the guise of fines and penalties. Those funds, of course, never find their way back to the People but instead are absorbed into the "great bureaucratic whatever".
    Don Fanucci never had it so good!
  • Edgar Swope | | 02 Jan 2014, 12:22 PM Agree 0
    What About the Consumers, why not prosecute them? I called the FBI regarding a borroer that commited mortgage fraud against My Community Bank, and they basically laughed at me... The consumers are just as much to blame for not paying their mortgages
  • JOE M | | 02 Jan 2014, 01:24 PM Agree 0
    Backroom high powered hedge fund managers and bankers created the products that were
    allowed to go on the market, and be sold. Lenders underwriters were told to pass the mortgages thru(580, 100%LTV, cash back ARMS). Who's to blame here? And we the brokers are penalized Now, being told how much we can earn? Something VERY WRONG with this picture!!! How about if the FEDS tell the attorneys how much they can charge per hour! Right HA HA!!
  • Because there needs to be a crime first... | | 02 Jan 2014, 02:30 PM Agree 0
    Brad Peterson and Doug are absolutely correct. How about The 'Federal' Reserve - they control rates...they, more than any other factor made the boom possible.
  • Lee in CA | | 02 Jan 2014, 02:56 PM Agree 0
    Mr. Swope, I couldn't agree more. Borrowers were complicit in many of these fraudulent transactions (although obviously not all). The prosecutors are reluctant to tackle single events... preferring instead to go after repeat offenders (i.e. a criminal enterprise / conspiracy). But, there have been many borrowers who were the criminal enterprise and repeatedly pursued fraudulent mortgages to accomplish what they wanted to do. And, I agree with you that I would like to see prosecution of these low-lifes. It needs to be a balanced and fair approach to the determination of legal liability. Unfortunately, it just does not provide as powerful a political soap box as "crooked banks and brokers".
  • Richard | | 02 Jan 2014, 06:04 PM Agree 0
    U.S. District Court Judge Rakoff didn’t get the word. In a C-Span review of the recent U.S. Supreme Court session law professors from Harvard, Stanford, Yale, Duke and West Virginia Universities all agreed, “Quid-pro-quo corruptions (QPQC) when big donors call the tune regulators dance to is the most serious threat to American justice.” The problem with proving QPQC is the same problem scientists have proving dark matter exist- they both leave very little evidence.
  • M. Scott | | 03 Jan 2014, 06:00 AM Agree 0
    I have to agree with Stan. The government seems to allow this behavior to some degree because they then can create huge fines allowing the criminals to bail out without prosecution while still having gotten rich. If they prosecuted and thereby deterred the behavior, well then their fines might be limited.
  • Please think... | | 03 Jan 2014, 08:43 AM Agree 0
    Judge has bad logic. People running corporation are voted in by shareholders to work on their behalf, so shareholders should suffer for their actions. This is more an attempt to attack corporations as institutions.
  • Ann | | 03 Jan 2014, 09:25 PM Agree 0
    Bravo! The prosecution of the actual criminal element, aka: agent, needs to be spearheaded. But, how does justice prevail when such a strong dichotomy exists between virtue and greed?
  • Mike | | 08 Jan 2014, 11:05 AM Agree 0
    I don't think that shareholders would intentionally elect executives who would claim to increase the coffers through fraudulent means. That would be a huge, huge conspiracy.

    It's not enough that corporations pay - individuals should be punished also.
  • allen sanford | | 19 Mar 2014, 02:02 PM Agree 0
    No indictments have come down because the Office of Thrift Supervision facilitated the banks actions. Henry Paulson orchestrated the partnership between MERS, Lehman, Deutshe, HSBC and Ocwen. Ocwen was the middle man who used dummy companies to alter the terms on mortgages and conceal the identities of the primary players. Had the Justice Department pursued the issue, the OTS would have been abolished and all transactions that were conducted by MERS and associates would have been voided as was suggested by Judge Robert Grossman. Judge Grossman determined that MERS and associates put 67 million illegal transactions into the system. Instead of being a hero, Paulson should be under indictment.
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