U.S. identifying people to prosecute for roles in mortgage crisis

by MPA18 Feb 2015
U.S. Attorney General Eric Holder has set a 90-day deadline for U.S. attorneys to identify individuals to prosecute for their roles in the 2008 financial crisis.

Holder, who is stepping down as soon as his successor, Loretta Lynch, is confirmed, has asked U.S. attorneys involved in residential mortgage-backed securities cases against financial institutions to report on whether they can develop cases against individuals, according to Bloomberg.

However, the final decision on whether to prosecute the individuals will be up to Lynch.

Although he was criticized earlier in his career for not doing enough, Holder has spent the last year making up for lost time in an effort to hold banks accountable for their role in the financial crisis.

Since late 2013, Holder has pursued a series of multibillion-dollar penalties against big financial institutions, including the nearly $17 billion settlement in August 2014 with Bank of America. The Justice Department also announced in July a $7 billion settlement with Citigroup, and in 2013, JPMorgan agreed to a $13 billion settlement.

The recent move to prosecute individuals could prove to be difficult for U.S. attorneys.

In a November 2014 BBC radio broadcast on why more dishonest bankers aren't in jail, Brandon Garrett, a law professor at the University of Virginia, said, “It’s incredibly complicated to figure out who knew what and who did what.”

He added that although someone has signed a document that approved a fraudulent deal, there may have been hundreds of employees that helped plan the transaction.

 "It is hard to place the blame, but it is even harder to prove intent to deceive. However, it can be done if recordings of what people were thinking at the time are available," said Garrett.

Ted Kaufman, former U.S. senator, wrote in a column for DelawareOnline.com that the statute of limitations on fraud committed before the financial crisis is running out. “It is safe to assume that no one who committed mortgage fraud will be prosecuted.”

You might also like: Painful Lessons From the Crippling Bank Lawsuits

Click here to listen to the BBC's broadcast.


  • by Dominick F. Sammarone | 2/18/2015 12:33:47 PM


    Eight friggin years later? Lol
    Follow the money.

    It starts on Wall Street where the mortgages were securitized.

    Don't firget your friends in the ratings company. Can't sell raw sewage without the "AAA" approval rating.

    Then comes your friends at the banks. You can look to the TARP list for that fuest list.

    Then you can do the small potato list. Small mtg bankers, title companies, closing attorneys, mtg brokers, appraisers and Realtors.

    I hope I didn't leave anyone out..

  • by have | 2/18/2015 3:02:30 PM

    They can start with the UNDERWRITERS at each lending institution. The UNDERWRITERS, no one else, not the customer service people, the processors, the appraisers, the termite inspectors have the last word in every mortgage package approved for the mortgage. The UNDERWRITER has the executive authority to review, inspect and scrutinize every page of mortgage documents prior to he or she signing the final approval of each mortgage package. That is where the responsibility should be placed.

  • by Esperanza Creeger | 2/19/2015 9:55:57 AM

    @have: The UNDERWRITERS are to blame? Really?!? Are you not aware mortgage mortgage underwriters underwrite mortgage files according to investor guidelines provided - to the letter?? Do not scapegoat mortgage mortgage underwriters for performing their due diligence according to program guidelines created by the progenitors of this financial lemon.


Is TILA-RESPA a good or bad thing long term?