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To: Zhang Fei
It wasn't the home buyer that screwed the taxpayer. It was the bank that lied about the status of that buyer when passing the mortgage to Fanny/Freddie/FHA and the taxpayer. Otherwise, it'd be the bank and their shareholders who would take the hit for issuing a stupid loan.

It's not criminal to be stupid, and not criminal to buy a bigger home than you can afford. That's what foreclosure and bankruptcy laws are for.

It is criminal to lie about the creditworthiness of a borrower when selling the loan to Fanny/Freddie or into an MBS.

It is criminal to foreclose on a house for which you do not hold the mortgage.

It is criminal to foreclose on a house where the borrower is up to date on payments, but your clerk just forgot to enter the payment into the books.

It is criminal to supply forged paperwork to the courts.

Yves Smith at Naked Capitalism has lots of links to examples of such crimes, and she doesn't even specialize in the fraudclosure problem.

The State AG's should only be concerned with real criminals, not stupid borrowers. Allowing stupid borrowers seems to have been public policy, so how could it be a crime?

49 posted on 07/26/2011 4:58:09 PM PDT by slowhandluke (It's hard to be cynical enough in this age.)
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To: slowhandluke

excellent post, thx, I think you’ve made the distinction between the big perps and the stupid little guys (in these sorts of cases) very clear

The so-called professionals in banking, law, finance etc. who knew (or should have known) better are the serious perps in all the huge financial calamities which unfolded here. Stupid little guys who took mortgages beyond their means would normally be *only* local, personal crises for the families involved (bad for them but not for our national and global economies)..... until so many thousand/s millions were recruited and enabled by scandalous practices gone out of control.


51 posted on 07/26/2011 5:16:22 PM PDT by Enchante (May 1, 2011: Death to Bin Laden, Death to Bin Laden..... al Zawahiri is next!)
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