S.F. Fraudsters Fueled 2008 Financial Collapse

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If only feds had listened back in 2006.
America's financial crisis had roots in fraudulent schemes to rope immigrants and other disadvantaged borrowers into loans they could never repay. And federal regulators knew of this problem as early as 2006, when abusive lending practices were the subject of San Francisco hearings convened by the U.S. Federal Reserve.

That's the local news coming out of a report the Financial Crisis Inquiry Commission released this week, which examines the roots of the 2008 mortgage meltdown. By 2006, 10 percent of mortgage borrowers were taking out "option ARM" adjustable-rate mortgages with payments so low their mortgage balances rose every month. Typical borrowers didn't understand they were entering an irreversible plummet.

By 2007, banks such as Countrywide had option ARM portfolios in which 90 percent of borrowers owed more than their homes were worth.


Kevin Stein, associate director of San Francisco's California Reinvestment Coalition, told the commission that federal regulators here knew -- at least since 2006 --  that many of these loans were fraudulent and unpayable.

"Nowhere was this dynamic more clearly on display than in the summer of 2006 when the Federal Reserve convened hearings in San Francisco," he said. "Consumers testified to being sold option ARM loans in their primary non-English language, only to be pressured to sign English-only documents with significantly worse terms."

So blatant were these fraudulent lending practices that, in some cases, loan papers were worthless the moment they were issued, according to the Commission's 662-page report.


"Some consumers testified to being unable to make even their initial payments because they had been lied to so completely by their brokers," Stein told the commission.

Stein's organization tried to warn regulators early on, the report said.


The California Reinvestment Coalition, a nonprofit housing group based in Northern California, also begged regulators to act, CRC officials told the Commission. The nonprofit group had reviewed the loans of 125 borrowers and discovered that many individuals were being placed into high-cost loans when they qualified for better mortgages and that many had been misled about the terms of their loans.


Mona Tawatao, an attorney with Legal Services of Northern California, said mortgage fraudsters often preyed on the most helpless people.


She told the Commission that typical victims included


"...people who got steered or defrauded into entering option ARMs with teaser rates or pick-a-pay loans, forcing them to pay into pay loans that they could never pay off. Prevalent among these clients are seniors, people of color, people with disabilities, and limited English speakers, and seniors who are African American and Latino."

In 2006, Tawatao and Stein were defending poor people who'd been victimized by shysters -- not exactly big news. Now, that we know those fraudulent schemes were behind an economic collapse that hurt rich and poor alike, their testimony is front-page material.


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2 comments
Futuredatabank Globaltrends
Futuredatabank Globaltrends

Everyone needs to get this correct... (REPOST ON TWITTER, FACEBOOK)

America is controlled by the 3 privately owned states (district of columbia, the city of london, and the vatican.) Each has it's own flag, pays no taxes and has it's own laws. All 3 are part of an interlocking "ONE" called "City Of The Empire" Or "Black Sun". 

When you pay taxes it goes to The Bank Of London and straight to the vatican. These 3 privately owned tiny nation states are owned by 13 families that rule the entire planet militarily, financially, and spiritually. Without a doubt. OPEN YOUR EYES AND YOU WILL SEE IT.

They control the markets, the religions, the media, and they rob you of your wealth. Wake up. Time to wake everyone up. Nothing will change until the people SEE the TRUTH about their miserable extistence that has been dictated to them by these CREEPS

MrEricSir
MrEricSir

This is why you see the same TIC units for sale on Craigslist week after week -- they were financed with time-bomb ARM loans. The loan rate jumps and suddenly everyone in the building moves out, abandoning their debt.

Now we have this strange situation where someone with a decent job can't afford a (seemingly) cheap place to live.

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