Obama Bank Rescue Will Not Work Due to Mortgage Fraud
Posted on | April 12, 2009 | No Comments
Mortgage fraud is a strong driver of the current crisis. In September of 2004, the FBI attempted to stop mortgage fraud that “could” cause a major economic crisis. Last year there were 63,000 referrals for mortgage fraud, over 80% done by the lenders. The FBI clears about 800 of these fraud cases. How is it possible that only 800 of 63,000 cases are investigaged and closed?
For mortgage lenders to grow rapidly they must loan money to people that are not going to pay it back. They make money because these borrowers have to pay higher rates and higher fees initially. This is exactly what IndyMac and WaMu were doing over the last five years.
Now Obama and Geithner have created stress tests, but unfortunately this is not changing anything about the accounting fraud because very few bankers are being arrested or charged. Instead, we are giving them more money to get through this crisis! This makes absolutely no sense! The one thing we have plenty of is unemployed honest bankers because the quickest way to lose your job as a banker is to be honest. Why don’t we give some of these HONEST bankers the opportunity to do some of the lending practices.
Tim Geithner is a protege of Summers and Rubin and that is why Obama chose him as the Secretary of Treasury. Geithner feels that the current crisis is a “confidence” issue. So, in essence, he can keep lying to the public until we gain confidence in Obama’s administration. If this continues, it will destroy the presidency of Barack Obama. Bankers don’t trust other bankers because they are lying about asset values. This can only get worse until we get honest bankers into the financial institutions. That is not going to happen if Tim Geithner and Barack Obama have any say in the issue.
Comments
Leave a Reply