After only a two month audit that is being kept under raps by the Dept. of Housing & Urban Development (HUD) the results indicate that taxpayers have been defrauded out of at least $30 billion dollars.
The audits conclude that the banks effectively cheated taxpayers by presenting the Federal Housing Administration with false claims: They filed for federal reimbursement on foreclosed homes that sold for less than the outstanding loan balance using defective and faulty documents.They clearly broke numerous laws, but what do you think the chances are that they will face any legal consequences? The people who run these institutions are in, or serve the interests of, the ruling capitalist class in the US. They make the laws, but only to serve their interests. Their laws don't apply to them. Laws only apply to us.
Rather than punishing banks for misdeeds, the administration is now focused on helping troubled borrowers in the hope that it will stanch the flood of foreclosures and increase consumer confidence, officials involved in the negotiations said.Yves Smith, a financial analyst, who has followed this issue closely in the past few years sees a coverup of the crimes. She writes:
Levying penalties can't accomplish that goal, an official involved in the foreclosure probe talks argued last week.
This revelation, that HUD audits of the biggest servicers over a mere two-month period, showed extensive fraud, is proof that abuses were extensive. It also establishes that the effort by Tom Miller to settle the 50 state attorneys general investigation quickly and and the recent “see no evil” Federal consent orders are a cover up.The article hardly mentions all the socially devastating effects that bankster (for my foreign readers, this is a combination slang word joining "banker" with "gangster") and mortgage lender practices have had on falling home prices. the wiping out of equity that ordinary citizens accumulated in their homes, the destruction of the economy, public spending cutbacks, and so on. As everyone knows or should know, the recent collapse of the economy was caused by the mortgage scam: coaxing people, even those with poor credit, to come into real estate offices and sign no-money down mortgages. Many people were in on this project, even George Bush who promoted the practice with celebratory references to an "ownership society". As a result property values took off and the real estate boom was on.
It is well known that economic booms and busts are an inherent part of a capitalist economy. What is less known is that capitalists love it. Volatility whether in the stock markets or in the general economy provides great opportunities to increase their fortunes. With their hands on the levers of finance, credit, mainstream media, and the political system, they can with their piles of money fairly easily create this volatility. During downturns in the stock market or, even better, busts in the economy, the ruling class seizes on these opportunities to pick up properties of all kinds at bargain basement prices to enlarge their holdings. These sociopaths who oversee our economy couldn't care less about the devastating effects of booms and busts on the rest of us.
After the latest economic bust in order to make even bigger bucks, the banksters spread this economic virus even further by wrapping these worthless mortgages in attractive AAA ratings from various agencies (no doubt they were also in on the scam), pedaled them to financial institutions and sovereign wealth funds, etc. all over the world. And the rest, as they say, is history.
