Skip to comments.Feds allege mortgage loan fraud at Wells Fargo (Warren Buffet part-owner)
Posted on 10/10/2012 7:28:19 AM PDT by Liz
The nations biggest bank and its largest mortgage lender, was charged by federal prosecutors with running a decade-long mortgage fraud involving recklessly underwritten US-insured home loans to fatten its bottom line.
(Excerpt) Read more at nypost.com ...
Cong Baca created "HOGAR" (Spanish for home) in 2003 to work with the mortgage industry, lender and banks and latino community groups to increase mortgage lending to what savvy observers considered to be unqualified Latinos.
"HOGAR" colluded w/ Cong Baca in what was to become a massive bilking of taxpayers. Cong Baca calculatedly hyped the fact that the national Latino homeownership rate was 47%, compared with 68% for the overall population.
HOGAR was coached to call the figure "alarming," and to say "a concerted effort was required to ensure that by the end of the decade Latinos will share equally in the American Dream of home ownership."
HOGAR and Cong Baca conned the public, failing to note that most of the "dreamers" were illegals, citizens of Third World countries who had violated US borders.
Predictably, HOGAR colluded w/ co-conspirators which included:
(a) shaky mortgage companies that ran into big trouble;
(b) Fannie Mae and Freddie Mac, both now under federal control after billions in taxpayer bailouts;
(c) Countrywide Financial Corp., sold to Bank of America Corp;
(d) Washington Mutual Inc., taken over by the US government and sold to J.P. Morgan Chase & Co.; and,
(e) New Century Financial Corp. and Ameriquest Mortgage Corp, both now defunct, killed by defaulted subprime Latino mortgages.
HOGAR's ties to the subprime mortgage industry were substantial. Bribery and self-dealing were rampant:
<><> Companies that donated $150,000 to Cong Baca got the right to have their own research fellow who would conduct fraudulent studies, which were cunningly used by industry lobbyists to pump lending.
<><> Bribery and extortion in the form of $100,000 annual donations to Cong Baca, for which HOGAR provided phony news releases from Cong Baca's Hispanic Caucus promoting a lender's commercial products to the Latino market,
<><> The most shocking example of bribery well-substantitated by Hogar's literature..... HOGAR announced it worked with Freddie Mac on a self-serving two-year examination of Latino homeownership in 63 congressional districts.
The "study" found Hispanic ownership on the rise thanks to "new flexible mortgage loan products" that the industry was adopting at the urging of Cong Baca's collusive coterie.
<><> HOGAR conned lenders into even more lenient down-payment and underwriting standards.
<><> As the subprime debacle unfolded, HOGAR declined repeated requests for comment despite the economic havoc their activities precipitated.
The mortgage schemes demonstrated the criminal activities of border violators with multiple identities---perhaps violent, terrorist-connected foreigners---colluding and conspiring to defraud private companies and public entities. And mortgage racketeering enterprises which employed sub rosa finance and business practices to carry out deceptions and frauds.
The alleged ring of swindlers---a Congresman, individuals with multiple identities, banks, insurance companies, mortgage nrokers--might be charged with cheating the US govt, taxpayers and bank share holders out of hundreds of millions of dollars via an elaborate web of mortgage and bank frauds.
The mortgage Dreamers used multiple phony identities, fraudulent Social Security numbers, purchased from identity forgers in order to obtain govt-subsidized benefits.
L/E will find that individuals with multiple identities obtained fraudulent mortgages then flipped the houses at ever-higher prices to family member who then absconded to foreign countries, sticking banks (and taxpayers) with hundreds of millions in fraudulent mortgages.
BACKGROUND A Wall Street Journal investigative report related that, according to the Federal Financial Institutions Examination Council examination of the borrowing spree, uncovered financial schemes by low-income housing groups, Hispanic lawmakers, a congressional Hispanic housing initiative, mortgage lenders and brokers, all colluding in fraduent schemes to increase homeownership among Latinos with forged documents which enabled massive fraud.
This was not simply the mortgage market at work. It was fueled by avarice, greed, and Congressional enabling fraudulent practices. In 2005 alone, mortgages to Hispanics jumped by 29%; Latinos with multiple fraudulent identities in low-paying jobs obtained subprime mortgages for prime properties---soaring to 169%.
(Research provided by Wall Street Journal. Some material excerpted from the NY Times.
To Warren (Buffett) From The Taxpayers: Eat #@/t You Jackass
The Office of Federal Housing Enterprise Oversights report says that F/M CEO Franklin Raines---a Clinton appointee---and other Fannie Mae bigwigs, deliberately and intentionally manipulated financial reports to artificially hit earnings targets in order to trigger multi-million dollar bonuses for senior F/M executives.
Ex-Fannie CEO Franklin Raines should be behind bars for life. He is a crook of the first order. This thief Raines cooked the FM books precipitating losses of $9B (that we know of) for the single purpose of creating bonuses for himself and other F/M insiders. The SEC said Raines broke accounting rules by playing with risky derivatives.
RAINES COOKS THE F/M BOOKS---WALKS AWAY A MULTI-MILLIONAIRE After Raines was fired and exposed as a fraudster for cooking the govt books, Raines walked away w/ $90 million dollars, a $26 million parachute, PLUS..... Raines gets a MONTHLY pension of $116,300 for life. Raines had already collected $4.87 million in "special performance" shares. Raines owns options giving him $5.8 million in net profit after redemptions, plus another $8.7 million in deferred compensation for his six years at the F/M helm. There's more.
Raines keeps $5 million of paid-up life insurance. He and his spouse get free medical and dental benefits for life, worth over $1 million. NOTE: Raines earned $20 million in salary, bonuses and stock awards (that we know of) in one year.
To keep Raines happy within philanthropic circles, Fannie Mae will match Raines' charitable contributions by $10,000 a year.
After he was fired, Raines told the F/M board that he's entitled to get paychecks until June 22 giving him another $600,000, which triggers a $2,000 monthly raise in his lifetime pension. He also said he's entitled to disputed options with a gross value of about $5.6 million.
Wells Fargo is just as bad as Wachovia that they acquired.
Excerpt ...Ten years ago the typical conforming mortgage required a down payment of 10-20%, and low-down payment mortgages were considered too risky. But then we helped to standardize the 3-5% down payment loan, brought it to global capital markets, and made it available to lenders and communities nationwide. Now low-down payment loans are commonplace. And we just adopted a new variance in our underwriting standards that will make the $500 down payment loan widely available as well...
In 1994, we pledged to provide $1 trillion in capital to ten million underserved families by the end of 2000. Thanks to our housing and industry partners, we met that goal early.
Then in 2000, we launched our American Dream Commitment, a pledge to provide $2 trillion in capital to 18 million underserved families by the year 2010, including $400 billion targeted specifically for minority families (later raised to $700 billion in response to President Bushs Minority Homeownership Initiative). After four of the strongest years in housing and mortgage finance history, weve already surpassed the top-line goals of this commitment. But our work is far from complete.
So in January 2004, we announced our Expanded American Dream Commitment and pledged significant new resources to tackle Americas toughest housing challenges. Our new commitment has three main goals.
First, we will expand access to homeownership for six million first-time home buyers in the next ten years, including 1.8 million minority first-time home buyers.We also will help raise the national minority homeownership rate from 49 percent to 55 percent, with the ultimate goal of closing it entirely.
Second, we will help new and long-term homeowners stay in their homes through a series of initiatives, and commit $15 billion to preserve affordable rental housing and $1.5 billion to support the revitalization of public housing communities.
Third, we will increase the supply of affordable housing and support community development activities in at least 1,000 neighborhoods across the country through our American Communities Fund, and through targeted investments like Low-Income Housing Tax Credits that help finance affordable rental housing.
It is because of initiatives like our Trillion Dollar Commitment and our American Dream Commitment that we have exceeded our HUD affordable housing goals for ten consecutive years. (End Raines excerpt.)
FANNIE-MAE—THE DEMOCRATS’ CRIMINAL ENTERPRISE / By Michelle Malkin
Fannie/Freddie are centerpieces of the criminal enterprise
called the Democrat Party-where Dem cronies and collaborators loot the organization, get cushy jobs, bonuses, and the like.
Fannie Maes political machine dispensed campaign contributions, gave jobs to friends and relatives of legislators, hired armies of lobbyists (even paying lobbyists not to lobby against it), paid academics who wrote papers validating the home ownership mania, and spread charitable contributions to housing advocates across the congressional map.
Fannie Mae serves as an industrial-sized patronage factory sharing profits with political allies, spreading taxpayer funds to voting blocslike ethnic groups-and doling out jobs to left-wing academics, Washington has-beens and back-scratching buddies.
Obama insider Fannie Mae exec Jim Johnson got sweetheart loans from shady subprime Countrywide. Pols raked in six-figure salaries as F/F engaged in Enron-sstyle accounting, plunged into debt and helped usher in the subprime housing meltdown through cockamamie lending practices.
Bill Clinton appointed Franklin Raines, Daley and Rahm Emanuel just as the quasi-governmental F/M engaged in rampant book-cooking so that F/M insider could help themselves to massive bonuses. The Chi/Tribune exposed how Emanuels profitable stint was low-show w/ no work involved. Emanuel was not even assigned to committees, according to company proxy statements.
Immediately upon joining the board, Emanuel and other insiders qualified for $380,000 in stock and options plus a $20,000 annual fee, public records indicate.
W/ Wall Street Rahm Emanuel at F/M, accounting tricks were used to mislead shareholders about outsize profits F/M reaped from risky investments. The goal was to cook the books to keep fraudulent earnings on the books, to make Freddie Mac look profitable on paper-AND to fraudulently obtain humongous annual bonuses for political insiders.
Wells Fargo tried to pull a fast one on us earlier this year - started putting our payments into “holding accounts” then tried to foreclose. Keep playing footsie with me sending them info, then re-requesting the same info, then claiming at the hearing I never sent them the info.
I’d be very wary of these bastards.
It’s really sad that they were able to buy a great company in A.G. Edwards & Sons before the crash and took it down with them.
All being orchestrated as part of Operation Save Obama and the Fake White Indian Too.
Mortgage Banker Perp Walks commencing in 3.....2.....1.....
I like US Bank and have had good luck with them for 10 years.
Many thanks for the realtime report.
I worked in the Mortgage industry in the late 1990’s. I vividly remember several lawsuits in Ohio, all originating in Cleveland, that were filed by this organization that at the time I had never heard of before. The name of this heretofore unheard of organization was ACORN. They were alleging that banks and lenders were discriminating against low income borrowers and credit challenged borrowers.
I remember a couple of things that changed after the lawsuits. One, lenders could no longer turn down a loan from someone who recieved unemployment compensation, child support as their primary income, or welfare. Two, many private lenders stopped originating loans in Cuyahoga County.
Oh, and lead counsel for two of these lawsuits representing ACORN, none other than one Barrack Hussein Obama. So, he sued the lenders to make them give out these loans as a lawyer for ACORN, and now as President he is suing them again for complying and actually lending the money. And he is getting away with it. Only in America.
Who wants to bet there will NEVER be a question about his in 'the debates'.
Oh, and lead counsel for two of these lawsuits representing ACORN, none other than one Barrack Hussein Obama. So, he sued the lenders to make them give out these loans as a lawyer for ACORN, and now as President he is suing them again for complying and actually lending the money.
These kinds of loans were a big part of what caused the housing collapse. What were they called? Yeah, NINJA loands - 'No Income No Job no Assets'...
Were you surprised your local paper had zero interest in this story? My paper didn't either. They were here in Florida - a ground ZERO for the housing mess - and 'missed' the story. The New York Times didn't care either...
We're going to be so screwed if Obama is reelected.
....lead counsel for two lawsuits representing ACORN, was none other than bleeding heart, wealth redistributor----Barack Hussein Obama. Obama sued the lenders to make them give out these loans as a lawyer for ACORN.... lenders could no longer turn down a loan from losers who received unemployment compensation, child support, food stamps or welfare as their primary income.....
...... and now as President he is suing again for complying and actually lending the money for this stupidity.
Wonder how many secret offshore accounts Obama has pilfering millions from these banks?
In the book, House of Cards, by William Coan---Wall Street debacle---Coan writes of a latino real estate salesman the latino who lied about a deal; falsified the mtge app for couple who had no other income but govt disability.....
========================================================= THRIVING ON CHAOS The disturbed Obamatons are creating a dysfunctional chaotic culture, aiding and abetting hate-filled invaders lying in wait to harm Americans.....saddling Americans with the costs of subsidizing a cabal of ruthless predators w/ no empathy for others. The anti-social psychopaths recognize no moral and ethical boundaries----aggressively going after what they want, irregardless of the consequences.
Actually, they were not NINA loans. You at least had to have a decent credit score to get those. They made us include welfare and unemployment comp. as LEGITIMATE income and verified for the purposes of underwriting the loans. It was mind boggling. No, the papers did not care about the story as the lawsuits were fully endorsed by the Clinton Administration as part of the CRA.
I actually saw copies of the lawsuits that listed Barack Obama as lead counsel in a couple of the lawsuits.
The no doc loans as they were called were not made to this segment.
The no docs loans to self employed people normally had good credit scores.
They were generally aimed at self employed people.
The loans made the segment ACORN would sue over; were generally full doc loans.
The problem with those is that relaxed credit standards were allowed.
Does it seem strange to you that the New York Times and Washington Post can't find those papers? Considering that they're part of the Public Record? Those contracts and cases are available to all citizens... especially to reporters making a small effort...
I'm disgusted with how the press acts. They've thrown away their credibility to help one party... and with it they've thrown away the respect and trust of their readers.. Shame on them.
I KNOW WF are frauds... My family is proof, even though we weren’t involved in the sub prime debacle, the incompetence at WF harmed my family to a huge detriment... The only recourse we had was a lawyer for a$10,000 retainer fee....after we paid 1200.00 for initial consultations.... Of course that was out of the question at the time.... So for some people who did everything right, WF shafted us BIG TIME....