Over at Economist’s View, Prof. Mark Thoma highlights a NYT article about how the same people who swindled unsuspecting homebuyers, now that the housing industry has imploded as a result, have simply switched to another related fraud involving mortgage modification for homebuyers being thrown out.
Just like they were before, this immoral gang is still in the fraud business.
Then if you combine this article with the one on Goldman Sachs, written by Matt Taibbi and published in Rolling Stone magazine, you realize the depth of fraud that’s permeated just about every corner of the nation’s financial industry. And it’s been done with almost total impunity.
It’s no accident this recent era of “financial innovation,” resulted in a Bernie Madoff and R. Allen Stanford among many others. As soon as it all began to unwind and the waters receeded, all the rocks just beneath the waves become visible. It’s fraud as far as the eye can see.
It’s not as though this wasn’t visible either. From a FBI press release in June a year ago, there’s this information.
“From March 1 to June 18, 2008, Operation Malicious Mortgage resulted in 144 mortgage fraud cases in which 406 defendants were charged. Yesterday, 60 arrests were made in mortgage fraud-related cases in 15 districts. Charges in Operation Malicious Mortgage cases were brought in every region of the United States and in more than 50 judicial districts by U.S. Attorneys’ Offices based upon the law enforcement and investigative efforts of participating law enforcement agencies. The FBI estimates that approximately $1 billion in losses were inflicted by the mortgage fraud schemes employed in these cases.”
State Attorney Generals, the FBI, and most importantly the federal Justice Department should pursue these miscreants as ruthlessly as the miscreants pursued unsuspecting investors and homebuyers. It’s a national embarrassment the stain of which must be eliminated.
The laws are there, they just need to be enforced.
This is also a wake up call for pre-emptive alertness. President Obama has recommended a new Consumer Finance Protection Agency and based upon the all too clear and abundant recent evidence, one is badly needed.
All this is also strong evidence that Treasury should start doing some serious trust busting on Wall Street, which has become even more consolidated and uncompetitive as a result of the financial fraud meltdown.