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Charges to be Filed on Subprime Lenders

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US Atty Gen Launching Investigations

According to MSNBC, a massive investigation will soon be launched by the US Attorney General’s office of banks and subprime lenders as they relate to the mortgage crisis. “I think we are going to see some fairly dramatic results in the near future,” U.S. Attorney Thomas O’Brien told The Associated Press. “Mortgage fraud is an extremely important issue to me and to the people of this district.”

Countrywide, IndyMac and New Century are currently under investigation by a grand jury and it sounds like more will be joining them. Reports indicate that the investigation will be done as quickly as possible so as not to drag it out for several years and to me, the goal appears to be to indict those who committed criminal acts of fraud.

But What About…

I have mixed feelings about it as it could turn into a witch hunt slash blame game but on the same hand, for the individuals and companies that knowingly defrauded homeowners (innocent or otherwise) should be weeded out from the responsible lenders that keep the housing industry afloat.

This casual observer wonders if the US Attorney General will make the 2008 election year October Surprise a similar raid on Congress and the Senate along with the halls of Fannie Mae and Freddie Mac, given that this is what the people see as the epicenter of this mortgage crisis.

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Lani is the Chief Operating Officer at The American Genius - she has co-authored a book, co-founded BASHH and Austin Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

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9 Comments

9 Comments

  1. Steve Simon

    October 17, 2008 at 5:53 pm

    This citizen agrees with your post’s last paragraph more than the rest…
    The fraud and actions of those mentioned in the beginning of your article holds my interest; but the Officials, and Quasi-governmental agency bosses are where my real anger is aimed…
    I was in office ofr eight years and never took a personal call on the “House Phone”.
    There should be no mercy for those that profited from the pain of the public while in those positions!

  2. Glenn fm Naples

    October 18, 2008 at 5:36 am

    Lani – it seems like we left the gate open to the corral and horse ran out and now we are closing the gate.

    There were individuals that did knowingly place their own personal interests above those of their clients and these individuals should be prosecuted to the full extent of the law as possible.

    There were borrowers that were greedy and lied in their attempts to profit.

    I truly hope that it does not turn into a witch hunt as witch hunts are consumers of time and resources with insignificant results.

    And maybe they should look into the actions of Fannie and Freddie along with Congress. 🙂

  3. Mack

    October 18, 2008 at 5:40 am

    To start placing blame you don’t have to look any further that campaign contributions. Examine the banking and finance committee members of the house and senate, see who got the big contributions from the 26 or so institutions under investigation and bingo, you have your initial list of possible guilty parties. Then take this list and examine how they voted or turned their head on the issues that have brought us to this massive bailout. Next let the average American taxpayer be involved in the trials instead of their piers in Washington. Finally SHOOT THE GUILTY.

  4. Vance Shutes

    October 18, 2008 at 5:56 am

    Lani,

    Whether an October suprise or not, I, for one, hope the investigation also leads into the Congress. It strikes me, with all I’ve read and heard in the media, that some members of Congress were complicit in their actions. They fostered and enacted laws which directly led to the abuses we now learn about. Some may have even had financial benefit from the laws they enacted.

    Further, I fully expect that some (many?) leaders of Fannie and Freddie will be investigated and charged. Again, from the news reports, it strikes me that they knew that there problems and did nothing about them. One specific leader reaped a huge golden handshake after only a few weeks of work. What I’d really like to see are embarassing news reports with names and faces. Mushrooms wilt in the sunshine.

    LIke any active agent, I know many mortgage loan officers – whether direct lenders for banks, or mortgage brokers. Speaking only for myself, I cannot recall any individual loan officer who acted with anything other than total integrity. Perhaps the investigations you cite will lead all the way down to individual loan officers, perhaps not. Instead, I suspect that the investigators will be plenty busy with the corruption and deceipt at the top – and that’s as it should be.

  5. Matthew Rathbun

    October 18, 2008 at 9:45 am

    What we really need is a list, maybe a blacklist just like the successful (sarcasm) Hollywood Blacklist on the late 1940’s – or better yet let’s throw all the lenders and Realtors in the lake, while bound and see who floats. Those who do float are obviously criminals…

    Look, it’s the government trying to act too tough, too late. There is an overwhelming amount of regulation out there – the legislators could have intervened long before now.

    It’s all a show.

  6. Thomas Johnson

    October 18, 2008 at 11:04 am

    I would caution my fellow komrades from casting any negative comments toward the wise and merciful kongresspeople and their generous financial backers at FNMA and Wall Street. Once we finally get the Hope and Change regime under the most merciful and wise Messiah in January, these unpatriotic comments might subject you to rendition as a subversive terrorist under the provisions of the Patriot Act. In order for us to have Hope and Change, we cannot tolerate any subversion from enemies of the state. Again, please be careful about your comments about our wise komrades in Kongress.

  7. Jack McCabe

    October 20, 2008 at 7:45 am

    I also hope they go after other top donaters to the politicians who have created the laws that made stealing from the American public a legal enterprise in real estate. In my opinion, add to the list the NAR, MBA, and the NAHB leadership and lobbyists.

    It’s also my opinion the powers that should go after the top heads of the NAR that proliferated propaganda and misconceptions of homeownership risks and rewards to continue the gravy train of commissions to their affiliated associates. they played as great or greater of a role as any politician or wall street derivative and credit swap dealer.

    Go after Congress (yes), go after Wall Street (yes) and go after the real estate consortium of associations, the VERY LARGE contributors to the politicians. Go after the self grandizing liars, cheats, and thieves.

    May be a bitter pill to swallow for NAR members that their leadership should also be held accountable, but they proliferated the Ponzi scheme, house of cards real estate market for their own best interests. Time for them to also pay the piper.

    And, if you cultivated or sold homes and condos to investor/flippers during the artificial boom, if you steered any clients toward certain mortgage brokers or companies because they could make a loan to your very uncreditworthy clients, if you continued to hype the boom when the bust was imminent and convinced people to buy homes that have them upside down or in foreclosure, perhaps their should be a pair of cuffs waiting for you for despicable role you played.for greed.

  8. Glenn fm Naples

    October 21, 2008 at 6:50 am

    @Matthew –

    Agree with you too late. But is there some neglience involved?

    The show is called election year.

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?

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NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<

#CarsonHUD

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Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.

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Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

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The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.

#JobOpenings

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Economic News

Gas prices are down, so are gas taxes about to go up?

Do low gas prices mean higher gas taxes are on the way? Budgeting for 2015 just got a bit more complicated, if some politicians have their way.

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Gas taxes and your bottom line

Many industries rely heavily on time in their vehicle, not just truck drivers and delivery trucks. Sales professionals hop in their vehicles throughout the day, as do many other types of professionals (service providers like plumbers, and so forth). For that reason, gas prices and taxes are a relevant line item that must be budgeted for 2015, but with politicians making the rounds to push for higher gas taxes, budgeting becomes more complicated.

Gas prices are down roughly 50 cents per gallon compared to a year ago, which some analysts say have contributed to more money in consumers’ pockets. Some believe that this will improve holiday sales, but others believe the timing is just right to increase federal taxes on gas. The current tax on gas is 18.40 cents per gallon, and on diesel are 24.40 cents per gallon.

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Supporters and opponents are polar opposites

Supporters argue as follows: gas prices are low, so it won’t hurt to increase federal gas taxes, in fact, those funds must go toward improving our infrastructure, which in the long run, saves Americans money because smoother roads mean better gas mileage and less congestion.

Gas taxes have long been a polarizing concept, and despite lowered gas prices, the controversial nature of the taxes have not diminished.

While some are pushing for complete abolition of federal gas taxes, others, like former Pennsylvania Governor, Ed Rendell (D) tell CNBC, “Say that cost the average driver $130 a year. They would get a return on that investment” in safer roads and increased quality of life, he added.

The Washington Post‘s Chris Mooney points out that federal gas taxes have been “stuck” at 18 cents for over 20 years, last raised when gas was barely a dollar a gallon and that the tax must increase not only to improve the infrastructure, but to “green” our behavior, and help our nation find tax reform compromise.

Is a gas tax politically plausible?

Mooney writes, “So, this is not an argument that a gas tax raise is politically plausible — any more than a economically efficient tax on carbon would be. It’s merely a suggestion that — ignoring politics — it might be a pretty good idea.”

Rendell noted, “The World Economic Forum, 10 years ago, rated us the best infrastructure in the world,” adding that we “need to do something for our infrastructure, not in a one or two year period, but over a decade.”

Others would note that this rating has not crumbled in just a few years, that despite many bridges and roads in need of repair, our infrastructure is still superior to even the most civilized nations.

Regardless of the reasons, most believe that Congress won’t touch this issue with a ten-foot pole, especially leading up to another Presidential campaign season starting next year.

“I think it’s too toxic and continues to be too toxic,” Steve LaTourette (the former Republican congressman best known for his close friendship with his fellow Ohioan, Speaker John Boehner) tells The Atlantic. “I see no political will to get this done.”

Whether the time is fortuitous or not, and regardless of the positive side effects, many point to a fear of voters’ retaliation against any politician siding with a gas hike, so this matter going any further than the proposal stage is unlikely.

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