If this was from way back in 94, wouldn’t you think that foreclosures would have been happening much sooner than 14 to 15 years later? I say that a very big part of this is the over-extended second mortgage holders that were trying to play the game with the ARM rates and lost.
True, but I am a Fannie Mae stockholder whose annual reports consistently named “minority” potential homeowners as their chief target.
Too, I was referring to this thread’s theme: “community activist” Obama’s activities. I doubt seriously he was going to bat for Jim and Midge in the suburbs looking to double their square footage and add a swimming pool.
The settlement was reached in May 1998.
Assume Citibank began issuing loans to poorly qualified applicants in 1999. Assume they issue 5-year balloon loans or ARMs that begin to go into default in 2004.
Entirely plausible that this lawsuit contributed (significantly) to the current mess.
I know the lefties have a problem seeing long term or anything past tomorrow, but this is a problem that has been in the making for a while.
The impact is in the precedent.
“very big part of this is the over-extended second mortgage holders”
A VERY SMALL PART, actually...
The BIGGEST part of this is the MASSIVE inner-city mortgage frauds.
This is just ONE SCHEME, from ONE Mid-sized US City.
Now, multiply this by a hundred cities, many LARGER, like Detroit, and you just BEGIN to see how this started.
On Wednesday, the prosecutor’s office announced charges of welfare fraud and theft against six men. Investigators say they were involved in different mortgage cartels over the past three to seven years.
Mehran Valiyi, Brian Beach, Marcus Dewayne Ward and Omar Dillard were all involved with different schemes all with the same result: defrauding HUD out of $284,000 and facilitating $37 million in mortgage loans that investigators say the suspects never paid on. Two out-of-state residents, Patrick Ladarius and Preston Forte, were also charged.
Investigators say the suspects took out almost $38 million in mortgages under fake companies they created, buying 568 homes across the city and then re-selling them for an inflated price to investors. The suspects never paid the mortgages on the homes they bought, sending properties like the one at 917 North Parker into foreclosure, according to the report.
Investigators say the suspects also registered some of their properties as Section 8 so they could collect HUD money all while not paying the home’s mortgage. Soon the home was in foreclosure and unsuspecting renters were on the street.
“Then they file for bankruptcy to keep from having to pay the judgment on the foreclosure and its just a never ending circle,” said Barbara Crawford, Marion County prosecutor’s office.
Authorities credit the Targeting Violent Crime Initiative for establishing links between violent crime and mortgage fraud cartels, leading to the charges against these 6 suspects.
http://www.wthr.com/...
From WTHR-13 Indianapolis
It took 4 years to settle the lawsuit. May 1998 was when they settled. Time frame is about right for a settlement highly favorable to plaintiffs. Circa 1998 is the same time frame for Boston area banks being forced to make very hight risk loans by the US Justice Dept.