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Goldman paying 3.15 BILLION to settle stinky mortgage claims

Funny how there is no mention of the rating agencies in all of this (mostly inaccurate) finger pointing.

Moody's, S&P's, and Fitch rated many of these shit ABS's comprised of the toxic mortgages at "AAA" which allowed the banks to hold less capital on the balance sheet and permitted many institutional investors to buy these securities because they were perceived to be riskless.
 
I liken the subprime mess to the felony murder rule. If you are just the driver on a robbery and your buddy kills the clerk, you're guilty of murder. In subprime, we can disagree whether the banker or the borrower was the driver vs the shooter, but either way only one participant in the crime had been punished.
 
TownieDeac said:
Clever tag.
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Preview
 
PhDeac said:
And what's a bad decision? Some people can afford less now than they could then for unforeseen reasons.
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Basically any decision that either put you in a situation where your payment didn't fit in a normal budget or you were reliant on some sort of introductory rate to squeeze the payment into a budget.
 
If you really want to address predatory lending go after the pay day loan and title loan shops.

Say what you will about the mortgages but their rates (at the time) were reasonable.
 
DeaconCav06 said:
If you really want to address predatory lending go after the pay day loan and title loan shops.

Say what you will about the mortgages but their rates (at the time) were reasonable.
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Actually many weren't.
 
When you get an adjustable rate mortgage but you don't factor in that your rate may be adjusted, that's just poor planning. On all sides. Obviously the broker didn't care because they were just getting a commission and the banks didn't care because they had Freddie/Fannie to pass it on to. And F/F didn't care because their executives were making $Texas and their reports looked great for peddling The American Dream #narrative.
 
DeaconCav06 said:
Not to mention B of A got to take a tax deduction for their penalty.
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Disgusting

bmoneydeac said:
Probably. Still one of the biggest fines in history. I'd much rather see the masterminds in jail and preserve the institution than just fine the shit out of them after the big players have already captured ridiculous wealth.
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+1. This fine does absolutely nothing to discourage individual bankers/lenders from continuing to do this. Potential jail time in a pound-me-in-the-ass prison just might.

Deacon923 said:
Strange, then, that one of those defrauded lenders just paid $3.15 billion to settle claims that it intentionally misrepresented and sold loans that it knew were likely to default.

Who did that poor victim of fraud sell those mortgages to? Oh, that's right - Freddie and Fannie, AKA the taxpayer.

And all those "victims" who sold those mortgages to the taxpayer in 2006-2008 got ginormous bonuses which they are still using to snort coke off the backs of expensive hookers.

Cry me a river.

You're smarter than this, dude.

Privatize the profits, socialize the losses. It took Wall Street a hundred years to perfect that business model, but it has been humming since 2001.
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Exactly. Let them eat cake.
 
Damn, BB, very succinct version of what I am no longer going to type.

Student loan defaults are right around the corner and will be as significant.
 
Deregulated finance sector. The invisible hand of the free market kicking ass and taking names!! If you don't like it GTFO commie!
 
Seriously though - if we deregulated the finance sector further, but also took away the government bailouts and at the same time prosecuted fraud the same way we prosecute coke dealing or strong-arm robbery, could Wall Street be cleaned up?
 
The BofA tax penalty is strange because they literally addressed it in the closing agreement for the penalty. Why I have no idea but it goes against the entire concept of nondeductible penalties and fines.
 
So the free market requires strict regulation and oversight and heavy consequences or it runs amok and we get…….the status quo?

You are going to stand here and tell me the educated, refined, wealthy, two-parent-having people will steal and swindle?


gotta be a myth
 
WakeandBake said:
So the free market requires strict regulation and oversight and heavy consequences or it runs amok and we get…….the status quo?

You are going to stand here and tell me the educated, refined, wealthy, two-parent-having people will steal and swindle?


gotta be a myth
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Do Goldman and Sachs come from two parent households?
 
I am assuming they do. They are our best and brightest. From Ivy League schools with MBAs. And they aren't sucking from the government teat........well, not directly through housing and food stamps.....wait
 
Deacon923 said:
we have had this conversation on the boards about 100 times.

It is possible to simultaneously believe the following:

1) Lots of people were irrationally exuberant and greedy and took out way more debt than they could afford. They should have known better.
2) Lots of other people intentionally preyed on the first group's ignorance and greed to make a lot of money for themselves.
3) Group 1 got the shaft, Group 2, for the most part, made $Texas and lived happily ever after.

I am not sure why either Group 1 or Group 2 should be considered wholly innocent. The difference is that Group 1 has taken its medicine with not a lot of assistance from the taxpayer, while Group 2 has gotten off more or less completely free. Worse, the fines that are now being levied, 6 years too late, are not being personally paid by the human beings who acted poorly in Group 2. Rather, they are paid by the stockholders of Bank of American, Goldman, and the rest - which means all of us are paying them since we all own those stocks in the mutual funds in our 401(k)s.

Privatize the profits, socialize the losses. Pretty good deal if you can get it.
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How did Group 1 get the shaft or take its medicine? For the most part, they got to live in a house that they otherwise never could have afforded for 2 or 3 years on an interest-only payment. Then they walked away and everyone else who made rational decisions picked up the tab. That isn't getting the shaft, that is gaming the system as much as the brokers.
 
Most of them were upper middle class or wealthy IIRC, so yeah once again they got a free ride.
 
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