Driving to attend my chapter of local MLM2007 (Money Left Me in 2007), I’m worried the Fed and RESPA police will arrest me for not having the correct date on a disclosure or mis-calculating a fee by one dollar. The stress may drive me to drink more than one box of wine a night.
No one is raising their glass to congratulate Andrew Fastow, former CFO of Enron, after his release from prison to a halfway house in Houston. He served a little over 6 years for his contribution in ripping off thousands of families’ retirement funds, in excess of two billion dollars, and costing Enron creditors over 64 billion dollars.
But at least he went to jail. As of today, not one person from the major banks has been indicted for their role in the downfall of the housing market. Architects of the foreclosure crisis are living the good life. Their motto: A sucker is born every minute and the suckers for the financial meltdown are the American homeowners.
And the hits keep coming. Shahien Nasiripour, with the Huffington Post reported confidential audits conducted by the Housing of Urban Development (HUD) disclosed that Bank of America, Chase, Wells Fargo, Citigroup and GMAC committed fraud in their handling of FHA foreclosures. The government had to reach way back in their tool box to find the False Claims Act, a Civil War era law, to justify their investigation of the banks.
The audit produced the following enlightening information:
• The banks filed for FHA reimbursement on foreclosed homes using defective and faulty documents.
• Two of the banks illegally foreclosed on homes of active-duty military service members, a violation of federal law.
• By taking shortcuts in foreclosing on borrowers’ loans, the banks saved themselves pocket change of $20 billion.
• In a sampling of 2800 loans underwritten by FHA-approved lenders, 49% did not meet FHA guidelines
• Bank of America failed to correct faulty foreclosure practices after the moratorium last fall.
Two of the banks refused to co-operate with the auditors. And the banks have lobbied to have the audits remain confidential. So much for the virtues of transparency.
Eric Holder, U. S. Attorney General has yet to prosecute one big guy from the big boy banks.
Too big to fail or too big to prosecute… You decide.