Wednesday, September 24, 2008

It’s ABOUT Time!...

According to CNN News, “the FBI is investigating Fannie Mae, Freddie Mac, Lehman Brothers and AIG - and their executives - as part of a broad look into possible mortgage fraud, sources with knowledge of the investigation told CNN Tuesday.

“The sources would not speak on the record because the investigation is ongoing.
FBI spokesman Special Agent Richard Kelko had no comment on that information, but said that 26 firms were currently under investigation as part of the bureau's mortgage fraud inquiry.”

It’s about time!

One of the things we know the FBI is aware of and actively pursuing is the fraudulent “flipping” of houses using illegal aliens as straw buyers.

One of the examples the FBI cited was one in Las Vegas, which involved a former Nevada First Residential Mortgage Company branch manager who directed loan officers and processors in the origination of over 200 fraudulent Federal Housing Authority loans, with a combined value of over $25 million. According the FBI, the schemers made and submitted false employment and income documentation for borrowers - most were illegal immigrants from Mexico. To date, the FBI reported, “Fifty-eight loans with a total value of $6.2 million have gone into default, with a loss to the Housing and Urban Development Department of over $1.9 million.”

According to columnist Michelle malkin,
“It's no coincidence that the areas hardest hit by the foreclosure wave - Loudoun County, Va., California's Inland Empire, Stockton and San Joaquin Valley, and Las Vegas and Phoenix - also happen to be some of the nation's largest illegal alien sanctuaries. Half of the mortgages to Hispanics are subprime. A quarter of all those subprime loans are in default and foreclosure.”

She added, “The National Council of La Raza and its Development Fund have received millions in federal funds to "counsel" their constituents on obtaining mortgages with little to no money down; the group almost succeeded in attaching a $10 million earmark for itself in one of the housing bills passed this spring.”

This is just one relatively small portion of the abuses that led to this collapse. It is almost a certainty that BOTH Fannie Mae and Freddie Mac were guilty of criminal malfeasance in both reducing traditional lending standards and in packaging that “bad debt” as “government-backed mortgage instruments” and the result of that tsunami of “bad paper” was the destabilizing of the housing market, the undermining of some of the leading financial institutions around the world and a wave of short-selling by investors who saw the meltdown coming and saw an opportunity to profit by it.

Recently the nearly $1 TRILLION bailout has hit snags from both Liberals and Conservatives who want greater accountability from the companies bailed out, iron-clad promises of repayment and help for some of the beleaguered borrowers as well.

1 comment:

Anonymous said...

A few beheadings are always good for business.

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