Remember When...

you would go to a bank for a loan, the banker would review your info, and offer you a loan that was honest and treated you fairly? No, not me either. I am too young to have ever seen that day. People would open a savings account in a bank. Others would ask for a loan. Banks would use the money from the savings account to fund the loan. The bank would ask a modest interest rate. No deceptive advertising. No 'fine print'. No 'you should have read it before you signed it' as if that washes your hand of your usury.

When the radio and TV is flooded with mortgage firms advertising THEIR interest rate, I knew if was bullshit. And the chia pet "really grows". And Clorox Bleach is good for the environment. Advertisements will lie and deceive to get you to buy the product... We (the U.S.) trusted the banking system too much and thought they were helping us. That makes what you did even more callous as I have previously described. You knew what you were doing!

Berine Madoff was sentenced to 150 years in prison for his schemes. What he did was a drop in the bucket compared to the intentional disregard to human civility y'all stood party too when the profits were soaring, the commissions were given, and nobody gave a shit about the people who were going to be affected by the housing bubble you unnaturally inflated beyond Gordon Gekko's imagination.

These are the times I hope there actually is a God. 'Cause your ass would be going to hell. Instead, you will walk away with no punishment. Hopefully, but not probably, your semi-used conscious is slowly eating away at you. No matter how much you tell yourself, you are the one at fault. Read more!

The Fraud Squad

by Howard Goodman

MIAMI -- The sun-seared condominiums along Brickell Avenue stand tall and shiny, but these days they're pockmarked with vacant units, one after the other ⎯ the foreclosed detritus of what was once Boom City.

This part of Florida has seen more than its share of real-estate bubbles over the years and been home to countless schemes, scams, and cons. There's a reason some call it "Fort Frauderdale."

So, no one should be surprised that the mortgage meltdown here presented a plenitude of new opportunities for wrongdoing ⎯ bad actors getting in on the anything-goes market to rake off thousands or millions in profits, inflating property values as if injecting them with steroids, and, when it all imploded, ultimately leaving behind blighted neighborhoods and victims with emptied bank accounts and ruined credit. Not for nothing is the Sunshine State a perennial leader on the mortgage industry's annual Fraud Index.

The surprise is that South Florida is leading the way in cleaning up the toxic real-estate mess.

Last month, Congress passed, and President Obama signed, the Fraud Enforcement and Recovery Act, which gives prosecutors and regulators new tools to crack down on mortgage fraud and predatory lending. Among other things, the new law establishes a National Mortgage Fraud Task Force within the U.S. Justice Department.

The inspiration for this new crime-fighting entity: the economic-crimes division of the Miami-Dade Police Department.

Police in Miami-Dade County made fighting mortgage fraud a top priority as early as 2006, when the housing bubble was still expanding. "We had a couple of very smart investigators in economic crimes who'd both been real-estate agents, and they could see it coming," says Glenn Theobald, the police department's chief counsel.

At the time, no state statute even defined mortgage fraud. "It was hard to make a judge see that a crime had been committed," recalls Theobald, a 26-year veteran cop with a weightlifter's build and a law degree. So he drafted a bill, saw it through the Florida Legislature, and in 2007, under the new law, it became a third-degree felony ⎯ later raised to second-degree-to knowingly make a material misstatement, misrepresentation, or omission in the mortgage lending process.


Now, if an appraiser falsified a property value to inflate someone's profits, for example, the cops could take action.

THE STRIKE FORCE

With strong backing from Mayor Carlos Alvarez and Police Director Robert Parker, the county formed a mortgage task force, with Theobald at its helm. The unit got started in September 2007 with a staff of five. A year and a half later, the unit's 19 investigators and supervisors have made almost 150 arrests. We're talking cases that rival, in complexity, the painstaking drug-organization takedowns of "The Wire."

Yet, the problem was exploding.

In Miami-Dade County, just 16 suspected mortgage-fraud cases were reported in 2005 and 78 in 2006. They rocketed past 800 in 2007 and topped 1,000 in 2008. (The actual incidence is undoubtedly much higher.)

The foreclosure numbers soared, too.

In 2007, Miami-Dade had 26,391 foreclosures, more than twice the figure for the previous year. In 2008, foreclosures more than doubled again, to 56,656-one for every 32 households.

And that just begins to describe the damage. The inflated real-estate values pushed up property taxes. When the bubble burst, homeowners walked away from their overpriced mortgages and too-high taxes, foreclosures soared, home prices plummeted, buildings and developments were blacklisted by banks. Neighborhoods deteriorated.

At first, Theobald thought that region-wide action was needed, but soon he realized that the same thing was going on from coast to coast. He made dozens of trips to the nation's capital and to points around the country. Last year, Rep. Kendrick Meek, a Democrat from Miami, introduced a bill based on Theobald's idea for a national task force, and the measure was eventually folded into the fraud-enforcement bill that Obama signed last month.

"The bad guys we stop here shouldn't be allowed to move on to Nevada, say, and do the same thing there," Theobald says. "This isn't baseball, there's no three strikes. You're convicted once, you're done."

HOOKING THE BIG FISH

Kenneth Thomas, a Miami-based banking expert and economist, says all the mortgage fraud is reminiscent of the cocaine-crazed '80s, when banks in South Florida were so besieged by deposits of cash that began weighing piles of bills instead of counting them.

"There wasn't enough law enforcement to handle it," Thomas recalls. "That's how mortgage fraud has become. Law enforcement can't keep up."

Not that the feds aren't trying.

The FBI has been stepping up mortgage-fraud investigations. It has assigned 180 special agents to mortgage fraud, up from 120 in 2007, and last year its Operation Malicious Mortgage brought more than 400 arrests.

"In general, we tend to focus on entire rings of fraudsters that collaborate among each other to commit very egregious crimes in multiple millions of dollars," says William Stern, a senior FBI agent who runs mortgage-fraud investigations out of West Palm Beach.

The approach has nabbed some big prizes. Just last month the local U.S. attorney indicted a married couple and the husband's brother-Garry and Yvonne Souffrant, both 33, and Gamaliel Souffrant, 44-for using Progressive Real Estate of Broward, Inc., "to launder millions of dollars in drug proceeds through an extensive mortgage fraud scheme." They were allegedly using straw buyers to help drug dealers buy homes and luxury cars and pocketing millions in mortgage-loan proceeds for themselves. Convictions could bring sentences of up to 40 years.

That big-case strategy makes it possible to nab the worst players and nail them with heavy prison time. But, as Theobald points out, it also means passing over an awful lot of smaller frauds.

"They're not getting to 98 percent of the cases," he says.

According to the FBI, there were 63,173 reported cases of suspected mortgage fraud nationwide in fiscal 2007 (a 36 percent increase over the previous year), and an additional 28,873 cases through February 2009. Against that deluge, FBI officials say the bureau is working not even 2,000 open cases.

DISSECTING THE MONEY TRAIL

In a simple form of the fraud, someone buys a $200,000 condo, has it fraudulently appraised at $800,000, and sells it to a straw buyer-a person who doesn't intend to live in the condo but whose good credit wins a loan. The first guy pays off the original $200,000 loan, and the two of them split the $600,000 difference. No one pays on the $800,000 mortgage, the condo goes into foreclosure, and a bank is stuck with the bill.

Lots of cases are slicker. "This is a crime that evolves," says Sergeant David Goldberger, an investigator with the Miami-Dade Mortgage Fraud Task Force.

Example: Instead of the condo merely selling for $800,000, add the element of phony paperwork: In a quick pivot, the HUD document that actually goes to the lender falsely shows the sale at $1.6 million to an altogether different buyer. A middleman pockets the difference of the two quick transactions.

Now you've got a fraud that involves a lot of players: a shadowy orchestrator and maybe a dirty title agent, a mortgage broker, an appraiser, and the willing or duped straw buyer.

Good luck sorting it all out. "Sometimes you have to dissect the money trail to the minute," says Perry Pitelli, a detective with the task force.

The fraud is often connected with other types of crime, investigators say. Many schemes, for example, are tied to identity theft. Some of the same players turn up in Medicare fraud or immigrant-smuggling cases.

It can easily take six months to investigate a single case, Theobald says. That's why it's a good idea to tap local and state police departments. "They have the manpower," Theobald says, "but they need the training."

Under the new law, the Attorney General Eric Holder is supposed to help with that by setting up a task force that coordinates law-enforcement efforts in the 10 states with the worst mortgage fraud.

Theobald, who's thrilled to see his work turned into a federal law, says that Holder's staff has been in touch with him.

So the feds want to learn from the locals? "I know," Theobald says. "Isn't it cool?" Read more!

They Had Their Hand In The Trillion Dollar...

Robbery of our Federal Reserve, after they took part in fucking up the whole Capitalistic System; but they deserve more money so these companies can keep them. But it wasn't their fault, it was the American people and their not knowing what they were signing on the dotted line. Because "trusting" the people who offer you a loan that it isn't a scam so one person can get a commission is crazy.

Bankers’ pay soars in attempt to halt exodus

By Patrick Jenkins in London and Francesco Guerrera in New York

Published: June 21 2009 23:31 | Last updated: June 21 2009 23:31

Wall Street names that have been among the most buffeted in recent months – Merrill Lynch, UBS and Citigroup – are hiking pay for their top investment bankers in an attempt to stop an exodus of talent.

Rivals report that poaching the best people from troubled banks has become far trickier. “Since the middle of May it has got far more difficult to get the people we want,” said one senior banker.

Between late 2008 and May, expansionist banks such as Barclays Capital, Credit Suisse and Deutsche Bank had plundered hundreds of senior bankers from those groups that were laid low by the financial crisis, in particular Merrill and UBS.

“I would say UBS and Merrill have each lost 25 per cent of their best people,” said Patrick Field, chairman of London-based financial headhunter Hanover Search.

In spite of the troubled environment, market rates for bankers have been running close to the boom-time highs of two years ago. “In some cases we’ve been paying up to 80 per cent of 2007,” admitted one senior executive at an expanding bank.

But the environment changed four or five weeks ago, bankers say. Partly driven by a need to hold on to good staff – and partly to offset the threat of bonus taxes or caps in the US – UBS, Merrill and Morgan Stanley have all increased their basic pay substantially. Citi now plans to do the same.

According to insiders and rivals, market salary rates for managing directors have jumped from about $250,000 (€180,000) only a few months ago, to closer to $400,000.

As well as base salary hikes, banks are once more offering guaranteed bonuses to staff approached with lucrative offers by rivals. Bank of America, for example, has seen off attempts to poach top Merrill bankers by matching or bettering offers.

Regulators will be concerned – increasing basic pay and guaranteeing bonuses run directly counter to their efforts to push banks towards pay that better reflects long-term performance.

There have also been small signs of the trampled banks scoring coups of their own. Last week UBS hired a new strategy chief, Vesna Nevistic, from Goldman Sachs while last month it took on Rajeev Misra, formerly of Deutsche Bank, as global head of credit. Read more!

Wall Street Isn't Rid of Punk-Ass...

Wannabe Masters of the Universe

The word "greed" is not an accurate description: A man can feel lustful without committing rape. People can be envious without stealing. Similarly, people can be greedy to an extent less than destroying the hopes and dreams of a nation.

We, the United States, have never been anything but a Democracy. You know, "Of the People, By the People and For the People". In recent times, another adjective that might be used to describe the US is Capitalism. We seem to have lost track of the fact that the terms Democracy and Capitalism are not interchangeable. It seems that since the corporate and think tank folks manipulated the government to make laws and foreign pacts, the sociological trends have be escalating toward criticizing, I mean, censoring, anyone who might argue that greed above all else is not good for the US. Further, as a culture, now we idolize these personality traits (Donald Trump, Bill Gates, etc).

The term from Sociology 101 is "internal control." We don't have any. People who can make bunches of money now will do so even if they have to twist their thinking severely to rationalize how it's OK if others suffer as a consequence. And it doesn't help when the government encourages this cultural shift in attitudes and behavior by reducing the external controls (making laws or enforcement more lax, financing and making profitable through incentives activities that can reasonably be expected to have catastrophic failure.)

So, yeah, Bush pushed for everyone to be able to get a house and nobody prevented the variable interest rate, negative amortization catastrophe. But as I recall, both sides of our bipolar political arena thought that was just fine. Also, none of them did anything to curtail the abhorrently exotic and weird business practices in the financial industry.

Worse yet, the folks who seem to have pocketed all the money personally by mastering the norms of the day when the problems were manifesting are not getting punished. In fact, Wall Street Journal readers seem to think that these "really smart people" need to get big bonuses STILL because they are the only talented ones able to get us flying level again... If 1000 Engineers caused way over a Billion dollars in losses from revealing National Security secrets, they would all be shot for treason. But the cost of this current economic disaster is 1000 TIMES worse than the hypothetical Billion dollar scenario. And yet we are going to pay them bonuses?

But it is ACORN's fault. They are a non-profit which operates with money dealing in the millions...Not Billions, but millions. ACORN couldn't even afford one private jet. But ACORN (Rush-Limbaugh-speak for 'blacks') brought down the "perfect" Capitalistic System. Get Real!
Read more!

What Has Been Going On With The Economy?

Those who know what they were doing gave out loan after loan to those who they knew couldn't afford said loan. But property values were rising. So they got to drain a family, get the house back, sell it at a higher value, drain that family, re-sell. During the drain process, tack on late fees and 'other' fees in the fine print. When the family stops paying the mortgage, tag their credit for fees and penalties for months before the home is foreclosed. Take debt, package it up, and sell and trade it. Base your entire profit and loss statement on loans. Nothing tangible. Just numbers. A number that can be molded and shaped to show whatever you want. With no regulation, nobody will find out.

Give yourself a bonus for showing such great numbers. Take that bonus money, give money to both Republicans and Democrats, buy your way into more and more influence over laws and policy. Buy yourself some more of your companies stock, watch it rise (unnaturally) while all the while hiding from the pending anvil hanging over your company's head.

Realizing the cycle is about to go from positive to negative, sell that stock before the value tanks, take that profit and give yourself another bonus. Go to those Democrats and Republicans and ask for bailout money, get billions in bailout money, give yourself a bonus, give MORE money to Democrats and Republicans, keep yourself out of jail, keep your job.

Don't lend out money. Just collect all the interest and late fees and overdraw fees and 'other' fees outlined in the fine print of a 'change to your contract agreement' insert which took peoples APR from 15% to 30%, keep the people paying for life. Make a profit, give yourself a bonus, buy your company's stock really cheap, watch it grow, make more money, create shady loans to give to people, make more money, buy more stock, give yourself a bigger bonus. Read more!