Later On

A blog written for those whose interests more or less match mine.

Big banks are a big evil

with one comment

Cora Currier reports in Pro Publica:

Buried in the sweeping mortgage settlement with banks, for which final documents were filed this week, are five whistleblower cases that shed light on the litany of foreclosure abuses by the banks.

According to one suit, Bank of America allegedly passed bad loans on to the Federal Housing Administration. According to another, the bank allegedly denied qualified homeowners access to HAMP, the government’s loan modification program.

The suits were all settled as part of the overall $25 billion mortgage deal. They were filed under the False Claims Act, which provides incentives for whistleblowers to come forward in cases in which someone has defrauded the government. Whistleblowers can net up to 25 percent of the total settlement from False Claims suits, and in some of these cases, the reward is in the millions.

Details are available for four of the cases; documents in a fifth, against JPMorgan Chase, have not yet been filed in Massachusetts. While the cases were settled as part of the overarching agreement, they still have to be accepted by the courts in which they were originally filed. In reaching the settlements, none of the banks admits or denies the lawsuits’ allegations.

We’ve laid out the details of each case.

Countrywide Defrauded the FHA

Kyle Lagow worked at LandSafe, a contractor of Countrywide, which Bank of America bought in 2008. He brought a suit in 2009 alleging that the company systematically undermined the appraisal process for home loans in order to approve as many as possible: . . .

Continue reading. What’s odd is that loans for minority applicants seems to have nothing to do with it. Could that just be a smokescreen from the racist Republican Right? (Yes.)

Written by Leisureguy

16 March 2012 at 1:20 pm

Posted in Business, Government

One Response

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  1. Yowzers! An interesting yet puzzling article. It beggars belief that banks would resort to shady and illegal tactics to make bad loans. They do not seem to have done this prior to the early 2000s, but then suddenly changed course. But why?

    Why did the banks make loans in the first place to borrowers they knew, or should have known, could not afford to pay back the loan?

    And why did so many people buy houses they could not afford by any stretch of the imagination?



    16 March 2012 at 2:36 pm

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