Posted on 07/26/2017 9:46:51 PM PDT by Lorianne
In the wake of the 2008 financial crisis, big banks paid tens of billions of dollars to settle state and federal fraud investigations, yet not one top bank executive was prosecuted. One investigator calls it the "immaculate corruption." But buried in recently unsealed documents is a revelation: major bank executives WERE referred to the Justice Department for possibly violating the law. A key whistleblower, Richard Bowen, is asking why none of them was charged.
Richard Bowen knew where the figurative bodies were buried at banking giant Citigroup, once the largest company in the world.
Richard Bowen: Over 60% of these mortgages and my largest area, did not meet our guidelines.
As a senior vice president, Bowen blew the whistle on Citigroup's practices leading up to the banking crisis; practices like buying and selling risky mortgages and misrepresenting them to the public and investors.
Richard Bowen: I started issuing warnings in June of 2006. I sent my warnings um, in a very wide distribution. I made committee presentations. I cornered people in the hallways.
Sharyl Attkisson: Executives? High ups?
Richard Bowen: Absolutely.
Citigroup played a major role in crashing the U.S. market. It ended up getting a $45 billion taxpayer bailout to survive and eventually paid $7 billion to settle federal and state complaints. But to this day, the Justice Department hasn't charged any top bank executive with a crime. This is the story of how systems intended to hold people accountable failed and Bowen claims seven helped cover for them.
Sharyl: Not much has happened in terms of from what I can see to the actual people at Citigroup who were allegedly responsible for this behavior.
Richard Bowen: I think that would be very accurate.
(Excerpt) Read more at fullmeasure.news ...
It wasn’t just the banks. The SEC was asleep at the wheel. Why is this country wasting money on an SEC that doesn’t do its job?
Fannie Mae and Freddy Mac caused all this.. It was their Housing loan bundles that caused the meltdown..
Fannie and Freddie were not the causes, they were merely facilitating vehicles.
The Fed’s loose money policy, the federal government’s debt accumulation policy, and the decision of governments on all levels to permit industrial-scale fraud by banks -without penalty even when they are caught - are the causes.
A more recent example of the incentives that were in play: When Wells Fargo was caught fraudulently creating millions of accounts, not a single person spent a single day in jail, and the fine was less than the profits gained from the fraud.
That’s the environment we’re talking about. No penalties for crimes, all risk offloaded to the taxpayer, so the finacaticists (I just invented that word thank you thank you) are unleashed to take any amount of speculative risk they please with no consequences whatsoever.
The SEC was formed to protect investors. It didn’t do its job.
Actually, the % of loans not backed by Fan or Fred was going up during that time.
“As a senior vice president, Bowen blew the whistle on Citigroup’s practices leading up to the banking crisis; practices like buying and selling risky mortgages and misrepresenting them to the public and investors.”
When banks didn’t want to lend to risky borrowers, they were painted as racist and forced by the government to make the loans. When the borrowers defaulted (as the banks knew they would), the same government accused them of exploiting the borrowers - and made them pay (as well as eat the losses). Worthy borrowers are absorbing the costs of this...
I’m still not sure how Wells Fargo accomplished that (opening accounts without customers’ knowledge); if these accounts were opened to generate fees, where did the funds come from to do so? Who didn’t notice the withdrawal on their real account large enough to open a new account that would just be bled for fees each month?
He who invents a word is duty bound to explain the derivation and meaning of said word. In other words I don’t have a clue.
You are spot on 100% correct. I worked for ABN AMRO, one of this country's largest mortgage providers and mortgage servicing providers from 2003 - 2007.
Fannie & Freddie were under pressure to buy every single loan that was presented to them due to regulatory requirements and the prevailing "wisdom" in Washington D.C. that "everyone deserved a home."
It wasn't just banks that wrote all these bad loans (that they KNEW were bad loans) and then bundled them with good loans (a process called "mixing") to package and sell to Fannie & Freddie or as "investment vehicles", Mortgage Brokers were much bigger bad actors. They knowingly not just wrote bad loans, they pursued bad loans because they were the easiest to make and the highest profit margins for them. Nearly 100% of those loans went straight to Fannie & Freddie within days of loan closure, lest the mortgage brokers get stuck holding paper they knew was bad.
It's important to paint the whole picture here. It wasn't just the bankers. An entire cottage industry sprang up to take advantage of bad government policy which helped create the housing bubble and subsequent crisis.
That's primarily because the hedge funds that were buying these mortgage backed securities really had no clue as to what the quality of those mortgage backed securities were, the risk attached to them and in many cases - who actually held the paper for them.
It was like a game of "hot potato" where the last guy holding the mortgages when the timer went off was the one that got burned. As we now know, that was the big "investment" firms that were heavily leveraged in mortgage backed securities such as Lehman Bros.
“When banks didn’t want to lend to risky borrowers, they were painted as racist and forced by the government to make the loans.”
Absolutely correct. The banks were dragged into doing substandard loans by the Feds. When banks said they didn’t want those loans on their books the Feds said Fannie and Freddie would buy them. When the banks said there was no profit in them the Feds not only permitted but encouraged the use of mortgage backed securities which made swimming downstream with the Feds hugely profitable for a while.
In the end, the bailout just meant that we taxpayers subsidized those risky borrowers - and the government took their side to keep them in the homes we bought for them...
“They knowingly not just wrote bad loans, they pursued bad loans because they were the easiest to make and the highest profit margins for them.”
The government used threats of legal action for racial discrimination to force them to issue bad loans; the lenders were simply doing the bidding of the government. We pretended minority homeownership was improving, and I’m sure it helped Dems at the ballot box.
Yes, the Feds screwed us on both sides of the deal. Let’s not forget a good bit of the bad loans were to minorities and even illegals, that the top dogs in Washington were all Democrats and the crash came just at the right time for the election.
Our government then spent the next eight years pretending they fixed it; the election of Trump made it clear many people were no better off than in 2007/2008. In fact, Hillary’s support came from many people for whom the economy is a non-issue (welfare and “workfare” - government jobs - recipients).
THE DERANGED PROGRESSIVE MIND IN MOTION---As a "community organizer" Obama sued banks to give loans to ne'er do wells who clearly could not afford them......even people on disability got loans, for instance.
As president, Obama sued banks for burdening people w/ loans they could not pay back.
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It's important to paint the whole picture here. It wasn't just the bankers. An entire cottage industry sprang up to take advantage of bad government policy which helped create the housing bubble and subsequent crisis.
More on this below.
It’s a combination of “finance” and “fanatical”, basically people who believe that financialization is an unmitigated good when the evidence is quite clear that it is a pox on humanity.
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OBAMA GAVE RHAM EMANUEL TWO KEY JOBS Soon as they occupied the WH, Obama placed his COS Rahm Emanuel in control of the US Dept of the Treasury (oversees the IRS).
PAUSE TO REFLECT First-term Obama had tight control of Treasury; Obama calculatedly placed his then-COS Rahm Emanuel in a dual role.......in the WH and at Treasury. Obama had a stranglehold on Treasury via COS Rahm Emanuel's dual role
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THE SMOKING GUN---WSJ REPORT--On Jan 20, 2009 Timothy Geithner was appointed Obama's Secy of the Treasury. But within three weeks, the Obama White House tightened its grip on Treasury. Obama put his COS, Rahm Emanuel, in charge of Treasury---Rahm Emanuel's dual role was an unusual move.
When he got to Treasury, WH COS Rahm Emanuel was so involved in the inner workings that the phrase "Rahm wants it" had become an unofficial mantra among subservient govt staffers, prostrate in obeisance, scurrying to accede to Rahm's wishes, according to Treasury government officials. Reported by WSJ / 05/31/09
More here: http://online.wsj.com/article/SB124113406528875137.html
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Pres Trump needs to suggest AG Sessions make an inquiry to the US Dept of the Treasury and be sure to ask what RAHM AND Obama were doing in the US Treasury after Obama got elected.
Treasury prolly HAS a huge Rahm/Obama paper trail. One can get awfully rich awfully fast knowing the Fed's Treasury moves in advance.
But the Iran connection could prove to be even more interesting considering the hundreds of millions Obama secretly gave to Iran.
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