Goldman paying 3.15 BILLION to settle stinky mortgage claims

WakeandBake said:

Was that really a problem, considering banks lowered their standards to nothing get these loans sold? You practically didn't have to have a financiall position at all. The banks were jonesing for more customers. They had saturated the market so they were manufacturing new customers by handing out loans to practically anyone, and then packing the loans up and selling them upstream.

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I can't say I have studied up much on that side of things, but, yes, I absolutely do believe that happened with a fair bit of frequency.

Enabled by no-doc mortgages though.

I'm glad we've at least finally made it to the unfalsifiable claims loggerheads.

WFU Lurker said:

How many homebuyers who misrepresented their financial position are in prison for fraud?

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They had their homes taken away from them and their credit destroyed. Did the bankers who encouraged them to lie about this information have their bonuses rescinded? Were they fired and their reputations so tarnished that they could no longer find a similar paying job?

Because that would of been fair.

WFU Lurker said:

The whole idea of a no doc mortgage is ludicrous. Who thought that was a good idea?

FWIW, banks have taken massive write-offs, hard to say they haven't been hit with downside. As hard as they should have been, probably not. But there are legitimate reasons for that.

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Who takes the hit when Bank of America takes a big write off?

Not the broker who originated the loan.
Not the underwriter who approved the loan.
Not the executives overseeing any of those people.
Not the even higher executives who packaged up and sold the loans.
Not the tippy-top executives overseeing the whole thing who got the huge bonuses and kept them.

The shareholders take the hit. And who are the shareholders? Mostly institutional investors, which means your 401(k), my 401(k), and the pension funds of all the teachers and state employees and union workers. That's who.

So tell me again how "the banks" have taken their downside? The banks are not people. They are just conduits for money. All the profits that came out of the subprime era got siphoned off by the people working in the banks, and the shareholders got left holding the bag when the fines and write-offs hit.

You mean the bankers, brokers, hedge fund people didn't give back their ill-gotten gains? I'm stunned.

Since they knew they weren't going to jail, they kept committing the frauds and encouraging others to commit fraud.

My bad, it's the guy who trusted his bank or broker or multi-billion dollar real estate company to be honest with him.

I don't disagree with your overall point but I'm sure plenty of brokers, underwriters and executives were fired.

TBDeac said:

I don't disagree with your overall point but I'm sure plenty of brokers, underwriters and executives were fired.

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After they stole millions and ruined countless lives to enrich themselves. I have no sympathy for people who don't give a fuck whom they harm as long as they make some money.

There's should be thousands of them in jail for decades.

RJKarl said:

After they stole millions and ruined countless lives to enrich themselves. I have no sympathy for people who don't give a fuck whom they harm as long as they make some money.

There's should be thousands of them in jail for decades.

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I don't know how much of this is fair. There are a lot of "workers," in a sense, who are merely cogs in a greater machine. I agree with you 100% that there should be a lot of people in jail for decades, and there should be even more people in jail for less time, but there are a lot of people who were "just following orders." In the US, we tend to punish the latter at the expense of the people who are actually responsible for system or firm-wide problems.

Strickland33 said:

I don't know how much of this is fair. There are a lot of "workers," in a sense, who are merely cogs in a greater machine. I agree with you 100% that there should be a lot of people in jail for decades, and there should be even more people in jail for less time, but there are a lot of people who were "just following orders." In the US, we tend to punish the latter at the expense of the people who are actually responsible for system or firm-wide problems.

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Just following orders to commit massive fraud is not an excuse. The lower level people would get less time and should have been forced to turn on their bosses.

None of them should ever be allowed to work in the banking or finance industries again.

RJKarl said:

Just following orders to commit massive fraud is not an excuse. The lower level people would get less time and should have been forced to turn on their bosses.

None of them should ever be allowed to work in the banking or finance industries again.

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It's not an excuse, but just like the NCAA should go after UNC and tOSU instead of the likes of SMU, Morehouse, and Texas Southern, I think it would be in everybody's best interest to focus on the bigger fish.

Yep, and alot of the people who really profited were probably shielded enough that prosecuting them would have been very difficult.

Deacon923 said:

Who takes the hit when Bank of America takes a big write off?

Not the broker who originated the loan.
Not the underwriter who approved the loan.
Not the executives overseeing any of those people.
Not the even higher executives who packaged up and sold the loans.
Not the tippy-top executives overseeing the whole thing who got the huge bonuses and kept them.

The shareholders take the hit. And who are the shareholders? Mostly institutional investors, which means your 401(k), my 401(k), and the pension funds of all the teachers and state employees and union workers. That's who.

So tell me again how "the banks" have taken their downside? The banks are not people. They are just conduits for money. All the profits that came out of the subprime era got siphoned off by the people working in the banks, and the shareholders got left holding the bag when the fines and write-offs hit.

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Pre-School republican children's propaganda

Strickland33 said:

I don't know how much of this is fair. There are a lot of "workers," in a sense, who are merely cogs in a greater machine. I agree with you 100% that there should be a lot of people in jail for decades, and there should be even more people in jail for less time, but there are a lot of people who were "just following orders." In the US, we tend to punish the latter at the expense of the people who are actually responsible for system or firm-wide problems.

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Yikes, the "just following orders" defense has been used for some pretty rough cases in the past, not sure you wanna head that way.

When you own the politicians, own the Fed, and own an exaggerated and ever-increasing slice of GDP - you have your hands on all the levers - and you own the proletariat.

TownieDeac said:

Yikes, the "just following orders" defense has been used for some pretty rough cases in the past, not sure you wanna head that way.

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That's nowhere close to my point, though, but sure. I understand the limitations of the argument. But consider the following.

If you're going to prosecute anybody who gave a bad mortgage or gave a mortgage in bad faith, then you're talking about a very large chunk, if not the overwhelming majority of the industry. That's impossible. I feel like it's safe to assume, too, that most of these people implicated in bad mortgages were not acting with malicious intent. Some of them are, but for the most part, it's a bunch of low-level lackeys relatively close to the bottom of a massive corporate hierarchy, enacting policies that come down from the top.

That being said, there are a handful of actors who are likely directly responsible for the foreclosure crisis, from the regulatory agencies that have proven to be lax at best and criminally negligent at worst (Thanks, Clinton and Bush II!), to management and executive staff who actually implemented a lot of these policies (Satan already has a suite prepared for Jamie Dimon), likely knowing full well what the consequences of their decisions would be. For instance, I guarantee you that mortgage lenders and servicers knew to expect a significant amount of default and built in the possibility of repossession and resale into whatever their projected gains would be...

It's really easy to sit behind a keyboard and say that several thousand people need to go to jail for decades, but it's much harder to actually build cases against the people who deserve to...

My other issue with the way that folks talk about this problem is that this a very bad case to screw up. Default is already a really serious issue and it's getting worse. The same companies that profited off of subprime mortgage default will profit off of student and payday loan default.

Setting bad precedent by failing to assign accountability where its due is arguably just as damaging as the crisis itself, and the left saying that everybody involved should be tarred and feathered - at the expense of actually leaning on its leadership to prosecute the people responsible (wasn't Obama supposed to do that for us?) - is hot air that gets us nowhere to actually doing something about the problem.

Strickland33 said:

That's nowhere close to my point, though, but sure. I understand the limitations of the argument. But consider the following.

If you're going to prosecute anybody who gave a bad mortgage or gave a mortgage in bad faith, then you're talking about a very large chunk, if not the overwhelming majority of the industry. That's impossible, not to mention the fact that, I feel like it's safe to assume, that most of these people are not acting with malicious intent. Some of them are, but for the most part, it's a bunch of lackeys relatively close to the bottom of a massive corporate hierarchy.

That being said, there are a handful of actors who are likely directly responsible for the financial crisis, from the regulatory agencies that have proven to be lax at best and criminally negligent at worst, to management and executive staff who actually implemented a lot of these policies, likely knowing full well what the consequences of their decisions would be. For instance, I guarantee you that mortgage lenders and servicers knew to expect a significant amount of default and built in the possibility of repossession and resale into whatever their projected gains would be...

It's really easy to sit behind a keyboard and say that several thousand people need to go to jail, but it's much harder to actually build cases against the people who deserve to...

The problem is that this a very bad case to screw up. Default is already a really serious issue and it's getting worse. The same companies that profited off of subprime mortgages will profit off of student and payday loan default.

Setting bad precedent by failing to assign accountability where its due is arguably just as damaging as the crisis itself, and the left saying that everybody involved should be tarred and feathered - at the expense of actually leaning on its leadership to prosecute the people responsible (wasn't Obama supposed to do that for us?) - is hot air that gets us nowhere to actually doing something about the problem.

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see my post above.


Nothings going to be done about the problem. It takes laws and enforcement to do something, and these assholes own the lawmakers. Its only gotten worse since the crisis with the SCOTUS passing horseshit like CU. Obama is nothing but one of them. There is no hope. Just roll with it and bow down to your masters. It will take a revolution. Just pour a drink and try to get a BJ from your wife or girlfriend. Thats all that is really left.


Edit: seriously, what can be done? The voters think the slightest regulations are socialism, because these assholes own the message, too. Neither side is going to propose laws against their benefactors. Its been undone, it is unraveling.

I may be off base here but I think the problem isn't that they made a bunch of shitty mortgages. There is nothing illegal about making loans to people with bad credit. There is nothing illegal about having an ARM loan that jumps from 2 to 10% overnight as long as it's disclosed. The illegal part was the packaging of the loans and misrepresenting what the investors were getting. That should be something that is concentrated within a (reasonably) small department and you really could pretty reasonably drill down who was knowingly committing fraud (regardless of whether they were "just following orders"). And I'd nail those fuckers as hard as the law would allow because as 923 mentions, we all bought their shit under false pretense and lost value in our holdings because of that.

bmoneydeac said:

I may be off base here but I think the problem isn't that they made a bunch of shitty mortgages. There is nothing illegal about making loans to people with bad credit. There is nothing illegal about having an ARM loan that jumps from 2 to 10% overnight as long as it's disclosed. The illegal part was the packaging of the loans and misrepresenting what the investors were getting. That should be something that is concentrated within a (reasonably) small department and you really could pretty reasonably drill down who was knowingly committing fraud (regardless of whether they were "just following orders"). And I'd nail those fuckers as hard as the law would allow because as 923 mentions, we all bought their shit under false pretense and lost value in our holdings because of that.

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But like I suggested before, I think it's really hard to decouple the products and their use. Clinton democratized the mortgage market without much in the way of regulation and mortgage lenders shifted their entire strategy to exploit this new, admittedly financially inexperienced market.

Whether the products themselves are good or bad really isn't the point, IMO. I agree with you in a bubble. The problem is that when you give weird products - disclosed or not, I'm not sure matters since most people still don't pay as close attention as they should unless they have already been fucked over before - to a population that has limited experience with the normal types of these products, then you have to reasonably expect for something like this, at a fairly large scale, to happen. That the foreclosure crisis proved immensely profitable (and, seemingly, naturally so) for these companies complicates, for me, the suggestion that one can concentrate the perpetrators into a department or series of isolated departments.

bmoneydeac said:

I may be off base here but I think the problem isn't that they made a bunch of shitty mortgages. There is nothing illegal about making loans to people with bad credit. There is nothing illegal about having an ARM loan that jumps from 2 to 10% overnight as long as it's disclosed. The illegal part was the packaging of the loans and misrepresenting what the investors were getting. That should be something that is concentrated within a (reasonably) small department and you really could pretty reasonably drill down who was knowingly committing fraud (regardless of whether they were "just following orders"). And I'd nail those fuckers as hard as the law would allow because as 923 mentions, we all bought their shit under false pretense and lost value in our holdings because of that.

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On the lower end of the lender totem pole, I think there is a case to be made for aiding and abetting. If a borrower is taking out a liar loan, and the broker knows he's a liar but goes along because there's a nice fee in it for him, how is that not aiding and abetting fraud? The story of Charlie Engle is pretty instructive and I don't think he was a rare case. http://www.outsideonline.com/outdoor-adventure/running/The-Road-Goes-On-Forever.html He just got busted because some IRS agent got a hard on for him for some unknown reason.

When Nordlander found no wrongdoing on the returns he persisted, ultimately sending in an undercover female agent. While wearing a wire over lunch, she recorded Charlie saying: “I had a couple of good liar loans out there, you know, which my mortgage broker didn’t mind writing down, you know, that I was making $400,000 a year when he knew I wasn’t.”

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