“The narrative that pre-crisis U.S. mortgage lenders were predators and frauds, and mortgage borrowers were their victims is objectively false.”, Mike Perry, former Chairman and CEO, IndyMac Bank

Mortgage victims? I don’t think so:

October 1, 2015 – Statement 915: “Does the New York Times really have a mortgage victim in the Hubbards from Sacramento, California? They bought their home back in 1994 for $146,500 and pulled just under $300,000 in cash out of their home in six different mortgage transactions…

August 3, 2015 – Statement 865: “Are mortgage lenders and investors in mortgages and mortgage securities supposed to be financially responsible for every trouble that befalls an American home borrower during the 30 years of a typical mortgage? I don’t think so. The NYT’s article below highlights a woman who became disabled and could no longer work and pay her mortgage, as a result. That’s terrible,…

March 26, 2015 – Statement 668: “Finally, someone honest says it’s not the banker’s fault!!! Rapper Slim Thug says it was his own personal decisions regarding SEX that cost him his home and hurt his net worth and credit.”

December 1, 2014 – Statement 507: “I think a majority…a big majority are either people who pulled all the equity out like the Coronels, put little to nothing down and didn’t want to stay in a negative equity situation, or were speculating on real estate…none of these people are mortgage victims in my book and neither were the lenders/investors…

November 25, 2014 – Statement 504: “Do Scott Reckard and the L.A. Times have a real mortgage victim here? The Coronel’s started with a $6,329 first trust deed mortgage when they bought their home back in 1994 and pulled over $350,000 in cash out of their home in 11 different mortgage transactions…

October 29, 2014 – Statement 459: “A Yuba County jury awarded $16.2 million in damages to a Plumas Lake homeowner who nearly lost his home to foreclosure after his loan servicer mishandled his mortgage…But the presiding judge has decided the jury got it mostly wrong…

October 23, 2014 – Statement 448: “Tracy S., 59, a technical writer for a large bank, divorced her husband just as the housing market spiraled downward. They were forced to sell their home, just outside Phoenix, for less than they owed, and the bank agreed to absorb the difference, about $25,000…

July 31, 2014 – Statement 303: “It is still crazy to me that the lender who gives money to a defaulting borrower is the bad guy here. PHH gave a borrower $280,000 that he never repaid. Then PHH offered to voluntarily modify the loan terms. And because the modification is not processed correctly or to the borrowers liking, the lender owes this defaulting borrower $16 million?? What happened to contract law?”

July 30, 2014 – Statement 301: “She had run into financial difficulty (paying her mortgage) after separating from her husband and owed nearly $300,000 on her home, which was valued at less than $200,000, she said.”, Wall Street Journal, July 30, 2014

Evidence of Fraudulent, Reckless, or Predatory Mortgage Lending? I don’t think so:

April 27, 2015 – Statement 710: “…the lawsuit (Quicken vs. the DOJ) gives voice to an increasingly popular sentiment among financial institutions: that the government is, for political reasons, extracting hundreds of millions, if not billions, of dollars in settlements for what are at best technically and immaterially incorrect claims.”, Matthew Schwartz, partner, Boies, Schiller, and Flexner, April 2015

April 20, 2015 – Statement 702: “In the complaint, Quicken said that the Justice Department based its settlement demands on a sampling of 55 of 246,000 loans and that the defects included miscalculating a borrower’s income by $17 and lending a borrower $26 too much…

April 15, 2015 – Statement 695: “A federal judge on Tuesday approved an unusual resolution to the case: The Securities and Exchange Commission and the former Freddie Mac executives agreed “that no party is the prevailing party.”, New York Times, April 15, 2015

April 13, 2015 – Statement 687: “I can tell you for a fact, pre-crisis, the folks at IndyMac (me included) thought we were doing both good for U.S. homeowners/borrowers, good for the economy (by supporting the government’s housing goals) and good for ourselves. It’s tough to decide what the right types and amount of home mortgages to make. Post-crisis, with the benefit of hindsight, the banking, mortgage, and consumer regulators took years and in the end they didn’t really decide…

April 8, 2015 – Statement 676: “It is telling that Congress adopted the (Dodd-Frank) act in July 2010, six months BEFORE the FCIC’s report was issued, a clear demonstration that the Democratic Congress knew well in advance exactly what this well-controlled commission would say.”, Peter J. Wallison, “Hidden in Plain Sight, Chapter 3: The Financial Crisis Inquiry Commission and Other Explanations for the Crisis”

March 9, 2015 – Statement 647: “The Obama Administration has had a high old time forcing big banks into big-dollar settlements without ever going to trial. So it’s worth paying special attention to the executives of the U.S. unit of Japanese bank Nomura who are refusing to settle a similar case they believe is bogus…

March 9, 2015 – Statement 646: “The fourth lesson is that fraud and near fraud can become so prevalent that they can have macroeconomic effects. “Fraud” is a legal term, and it is hard to prove. What I call “near fraud” is a moral term, and it is much easier to identify. Near frauds were rife, for example, in the way the financial industry dealt with borrowers and investors during the U.S. mortgage boom of 2003–6…

February 20, 2015 – Statement 621: “Another cause of delays was requirements that homeowners prove the factors causing their hardships — deaths, job losses, divorces. But last year, Keep Your Home California changed the rules to require only that homeowners show that their mortgage balance was at least 20% more than their home value.”, Scott Reckard, “Funding for California victims of housing crash trickles down”, Los Angeles Times

February 9, 2015 – Statement 603: “The case always looked fishy. Justice sued in 2013, though the facts about S&P ratings on mortgage-backed securities issued from 2004 and 2007 were known for years. And Justice chose not to charge S&P’s main rival Moody’s, though Moody’s had put an identical rating on most of the securities mentioned. (But unlike S&P) Moody’s never downgraded U.S. debt. A key piece of evidence was an affidavit (under oath) from Harold McGraw III, the chairman of S&P’s parent, reporting that three days after the downgrade an angry Treasury Secretary Timothy Geithner told him on the phone that the firm’s conduct would be “looked at very carefully.” Mr. Geithner denies (not under oath) making a threatening call, but Treasury records show the call occurred within minutes after Mr. Geithner left a meeting with President Obama…

February 3, 2015 – Statement 597: “Unfortunately, some of the largest financial institutions were victims of the same misapprehensions as regulators and academics about the quality of mortgages outstanding and the safety of the mortgage market, but they have been blamed by the government, the media, and ultimately the American people for excessive risk-taking. This view, a product of both the absence of accurate data and the government’s efforts to avoid blame…

February 2, 2015 – Statement 591: “If these findings hold up to scrutiny by other scholars, they alter our picture of the housing bubble. Specifically, they question the notion that the main engine of the bubble was the abusive peddling of mortgages to the uninformed poor…

January 28, 2015 – Statement 582: “Standard & Poor’s, the credit rating agency blamed for helping inflate the subprime mortgage bubble, has settled accusations that it orchestrated a similar fraud years after the bubble burst…

January 13, 2015 – Statement 568: “In case after case, negotiations followed a familiar script: The government demanded an eye-popping penalty, and the Wall Street firm briefly dug in its heels. But S.&P., one of three major agencies offering advice to investors about the quality of debt investments and the only one to face a Justice Department lawsuit, stood out as the rare company to actually follow through and fight the government…

January 6, 2015 – Statement 560: ”Mortgage lenders have to be crazy or desperate (or both) to continue to originate FHA and VA loans, where they now subject themselves to millions, tens of millions, hundreds of millions, maybe even billions in arbitrary fines or penalties from the government under the False Claims Act…

December 2, 2014 – Statement 514: “If one in seven appraisals are currently inflating home values by 20% or more, why aren’t Fannie, Freddie, FHA, and VA stepping up lender buybacks and instead recently announced policies that act to reduce them? And why aren’t the banking regulators doing more than “reviewing the issue”? I will tell you why…

October 14, 2014 – Statement 422: “The government calls it ‘fair housing’ when they lower underwriting standards to fringe borrowers. When the loan origination sector (private mortgage lenders, including banks) attempts to assist a wider range of borrowers, however, they are called ‘predatory’.”, Brad, October 2014 Mortgage Industry Newsletter

October 7, 2014 – Statement 410: “Again, the truth is finally emerging. FHA’s audit of mortgage loans insured by them in Q1 2014 apparently has uncovered huge, “material” underwriting error rates. If this is true, it goes a long way to disprove the mainstream view that pre-crisis mortgage underwriting deficiencies were a material cause of mortgage (and mortgage securities) losses during the financial crisis…

September 8, 2014 – Statement 350: “Of course the lenders want to lend but as pointed out in this article, when any and every default can result in a far more costly response for frivolous and immaterial errors it creates a defensive lending strategy…

August 22, 2014 – Statement 331: “I. Bank of America acknowledges the facts set out in the Statement of Facts set forth in Annex 1, attached hereto and hereby incorporated…21. Miscellaneous C. The Parties acknowledge that this Agreement is made without any trial or adjudication or finding of any issue of fact or law, and is not a final order of any court or governmental authority.” Excerpts from BofA’s August 20, 2014, Settlement Agreement

August 22, 2014 – Statement 326: “Please also don’t look for an analysis of how and why the fine was calculated because it doesn’t seem to exist. For all we can tell the lawyers made it up…

July 23, 2014 – Statement 287: “…for example, if someone took out a (FHA) loan 10 years ago, and maybe they got a $5,000 gift from their parents, well, technically, you’re supposed to get a gift letter from the parents. Well, let’s say we didn’t get the gift letter. The loan has been handled perfectly well for 10 years…

Posted on November 5, 2015, in Postings. Bookmark the permalink. Leave a comment.

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