The forerunner of the current mortgage banking and foreclosure crisis is the savings and loan crisis of the late 1980’s and early 1990’s. In that crisis, about 747 out of 3,234 savings and loan financial institutions failed, and over one thousand financial officers were convicted of felonies.This time around the country is seeing federal corporate mortgage bankers getting away with crimes such as control fraud. Average Americans are scrambling to beat home foreclosure when the corporate mortgage banks refuse to give them the time of day!
Reputed White-collar Criminologist William Black Says Federal Regulators Have Done Nothing!
According to white-collar criminologist William K. Black, the present crisis is at least seventy times larger than the savings and loan scandal. Yet none of the top financial or executive officers who are responsible have been prosecuted.
In this video interview, Black even admits that the federal regulators have done nothing to see that these federal banking criminals are brought to justice! This is unconscionable to the American people.
Part 1 Former Financial Regulator William Black Occupy Wall Street A Counter to White-Collar Fraud
Part 2 Former Financial Regulator William Black Occupy Wall Street A Counter to White-Collar Fraud
During the savings and loan crisis, a new business model emerged within the sphere of unscrupulous business practices, called “looting”. Looting is where corporate executives bankrupt their own corporations for personal gain. The primary tool that corporate executives use for looting is called “accounting control fraud”.
Accounting Control Fraud Defined and “Practiced”
The essential elements of accounting control fraud within the mortgage banking sector are: (1) grow like crazy; (2) make preposterously bad loans; (3) have extreme leverage, i.e. borrow extensively to create enormous debt; and (4) put aside only ridiculously low allowances for future losses.
This formula produces extremely high, although fictional, profits in the short term. The senior executives become very wealthy just before their corporations fail. They then go on to either a very comfortable retirement or to another lucrative position in another company.
In the middle 1990’s, the top financial officers of the federally chartered banks observed enormous pools of investor funds. These funds contained trillions of dollars, which were made up primarily of individual retirement accounts. These banking executives wanted this money for themselves.
Conspiring together, these financial executives devised a scheme. The banksters used mortgage-backed securities as a vehicle to defraud institutional investors out of their funds. These bank executives also wanted to avoid being caught. So this time around, they planned ahead to make sure that there would be no prosecutions or convictions.
Millions of homeowners have faced foreclosure; while others now fear losing their homes. We all know that the banks and mortgage banking companies have committed criminal acts. Yet not one executive of the major banks has been charged, let alone indicted and convicted of banking fraud. In addition, individual homeowners have been powerless to beat home foreclosure in the courts, even when they have had strong evidence of wrong-doing. Many judges have sided with the banks, leaving the plaintiffs with nothing.
Some believe this problem will only be solved by the people of America. Shortly individual Americans will do the prosecuting by filing individual RICO criminal complaints.
Want to know how you can be part of the answer personally in stemming the tide of foreclosure and mortgage banking control fraud? Want to beat home foreclosure?
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