Banks, Subprime Lenders To Face Charges

U.S. Attorney Predicts "Dramatic Results" From Sweeping Investigation Into Mortgage Crisis

(AP)  The top federal prosecutor in Los Angeles indicated Thursday that charges will be filed in the coming months in a sweeping investigation of banks and subprime lenders for their role in the nation's 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. "There are people who have made many millions of dollars preying on unsuspecting people. That's wrong. That's fraud in a tremendous amount."

A grand jury is investigating at least three mortgage lenders - Countrywide Financial Corp., New Century Financial Corp. and IndyMac Bancorp Inc. Prosecutors are looking at whether mortgage fraud and other white-collar crimes were committed.

O'Brien has just finished his first year overseeing the Central District of California, seven counties that became the heart of the nation's real-estate boom and bust. The area is home to many lending firms, including some which lured homeowners into taking out exotic loans with cheap teaser rates that mushroomed after a set time.

Thirty-four lawyers currently are looking at mortgage fraud and other white-collar crimes, now one of O'Brien's top priorities.

The government is pursuing a "surgical approach" in its investigations and hopes to streamline its prosecutions by seeking indictments with only a few counts, instead of spending several years seeking additional charges.

"We offer them three or four counts," O'Brien said. "We would get the same sentence and we plead them out and we move on to another crook."

O'Brien, 49, said his prosecutors are working closely with the Securities and Exchange Commission as well as other federal agencies in ongoing cases. He recently met with Rosalind Tyson, the SEC's regional director in Los Angeles.

"I said, 'Give me your Top 10 list. Your Top 10 list should probably coordinate pretty closely with mine," O'Brien said. "We sit down and share information we are allowed to share."

Rebecca Lonergan, a former federal prosecutor and a law professor at the University of Southern California, said investigations have shown mortgage fraud to be rampant in the lending business during the housing boom. She recalled one case in which a maid claimed on her loan application that she made $11,000 a month.

These companies "would just sign off on applications no matter how ludicrous the information was," said Lonergan, who worked at the U.S. attorney's office for 18 years.

She said it's unlikely that any alleged misconduct was limited to the lower ranks in the lending institutions.

"Was it just individual loan officers who knew about this?" Lonergan said. "It seems to me unlikely, considering the scope of foreclosures going on right now."

She added, however, that investigators will have a difficult time trying to prove company executives knew what was going on.

Bank of America Corp. bought Countrywide in a deal approved by the lender's shareholders in June. Rick Simon, a Countrywide spokesman, did not immediately return a call seeking comment.

New Century sought Chapter 11 bankruptcy protection in April last year. It had been the nation's second-largest originator of subprime loans.

IndyMac is now being controlled by federal regulators after it failed in July.

[txgrouch2007]

This is a diversion, designed to funnel our anger and frustration towards "getting them evil bankers" - and away from Congress.
Posted by bailmeout1 at 12:34 PM : Oct 17, 2008

You''re so right. Especially the likes of Barney Frank and his "affordable housing" agenda that resisted stronger regulation of Fannie Mae and Freddie Mac.

Now we''re hearing that the Republicans (including John McCain) tried to strengthen regulation of these lenders THREE YEARS AGO with Chuck Hagel''s banking reform bill. But virtually all Democrats were against it. Only a few Republicans were against it, but that was enough to make the measure a dead issue.

NOW LOOK AT THE DEMOCRATS HEE-HAW AGAINST THE GOP as if the GOP is to blame.

Self-righteous judgemental hypocrites, all of them.

[payasyougo]

"The top federal prosecutor in Los Angeles indicated Thursday that charges will be filed in the coming months in a sweeping investigation of banks and subprime lenders for their role in the nation''s mortgage crisis."
----

As long as our government can keep you angry and pointed at someone else, you''ll never see that your government is the problem, not the solution. Vilify the rich because it continues to be an effective diversionary tactic.

[nurse70-2009]

THE GOVENMENT SHOULD SEEK JUSTICE FOR ALL OF US TAXPAYORS WHO ARE NOW STUCK WITH AN ENORMOUS BILL WE CAN NEVER PAY . BUT THEY SHOULD ALSO MAKE THESE COMPANY''S THAT TRICKED PEOPLE INTO SUBPRIME LOANS AND VARIABLE RATES TO GO BACK, REFINANCE AND SET UP A FIXED RATE !!! THAT WOULD STOP THE CRISIS AND SAVE PEOPLE FROM BEING HOMELESS!! THIS WOULD BE THE ONLY JUSTIC FOR THE AMERICAN TAXPAYOR. STOP COUNTRYWIDE,CENTEX,NATIONSTAR,ETC THEY ARE ARE BUNCH OF CROOKS STILL *UCKING HOMEOWNERS!!!! HOMEOWNERSHIP SHOULD NOT BE AN ELITIST AMERICAN DREAM .

[tngreen]

When poor people get a handout, it''s because they''re lazy. When rich people get a handout, it''s because they made "honest mistakes" and we have to help them in order to keep our country from devolving into the Stone Age.

Shock and awe. Divide and conquer. It works!

You pathetic saps.

[c-mo6]

I remember when I was A teenager. I worked in the summers and at night and all. Just pocket money for me and my GF. I made more than I spent though and saved up a bit. At one point I didnt have a job and just partied with my GF, we went everywhere and did everything - until the money ran out. I went over to unemployment figuring I could get a check and use it for gas money and get a job - any job. This was in completely liberal NJ. Well they proceded to (without any questions) print me out 29 individual weekly checks. I think it was like 8 grand or something. I was in shock, I even asked the woman to check it was ok. She said it was accumlulated and that I even qualified for something called Extended Benefits. There was no checking it out with the manager or anything. Of course I kept it and spent it partying more with my GF. haha Now in NJ, they did change some things to limit that, but that is just an idea on what happens in these Government Help-All schemes.


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Posted by bailmeout1 at 11:34 AM : Oct 17, 2008
+ report abuse
just because you took advantage of it doesnt mean that there aren''t people who have lost their jobs after 20years of service and might really need that help til they get back on their feet.

[rational_1]

I''m perfectly willing for us to fork over another billion or two (at this point what''s another drop in the bucket?) to fund extensive investigations and the construction of new prisons to hold these miscreants. We''ve already blown the better part of a trillion dollars so we might as well get something constructive out of our money (like ruining the lives of the f*cks responsible for this debacle).

[bm6005]

You realize the Democrats appeal to the crowd that DEPENDS on government, don''''t you?........
Posted by corey2444

What a crock of s.hit! I''m independent now but I was a dem earlier in life. I NEVER expected anything from the gov''t. I worked hard, saved money and did well for myself. There are more white trash republicans on welfare than there are any other race of people. And they are a separate race, believe me.

[bm6005]

Sure you find lies and such with Republicans, but it is not the air that they breath to the extent as the Democrats. It is "in" them.
Posted by bailmeout

Yea, yea, yea. I know the poor repubs are so misunderstood. NOT!! First off both parties suck. Second, when it comes to money for them but not for others the repubs are at the front of the line. You seem to think that the dems are completely at fault. Take a look at where the repub congrees''s complete support for Boosh got the country. They spent like a GD drunken sailor. Open your eyes FOOL!!!

[far_point200]

Hmmm.... Will Congressional financial oversight committee chairmen Barney F(ag), Schulman & Dobb be charged with negligence?

How about charging J. Carter, B. Clinton and all the Congressmen who voted and modified the Community Reinvestment Act?

How about charging the heads of Treasury, SEC, FDIC and the FED for the last 30 years.

And don''t forget the heads of State Banking and Insurance Departments, especially the ones in New York.

Business people aren''t the only ones that need their arses spanked!

[bailmeout1]

If any banking executive serves a single day in prison, I will sprout wings and fly. Millions for the robber barons, but no justice for the American taxpayer.
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Posted by Beerman05200 at 12:20 PM : Oct 17, 2008
I am sure that the banking executives have it set up that they only broke "ethics" rules. You are right. None will do jail time. None will give any money back. This is a diversion, designed to funnel our anger and frustration towards "getting them evil bankers" - and away from Congress.

[beerman05200]

If any banking executive serves a single day in prison, I will sprout wings and fly. Millions for the robber barons, but no justice for the American taxpayer.

[bailmeout1]

Plus, as we age we become more conservative. Back then I was a Democrat. hehehe

[tekzero2u]

Typical Republican BS. Rips the govt off ( because he can ). Then turns around and tries to blame somebody else for it.

I love dogs. A dog will knock over the garbage can in the kitchen--sit down--tuck it''''s tail and beg for forgiveness.

Cats ? ( Republicans )...they will knock that same can over and look at you like you did it.
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Posted by tejasdemo at 11:40 AM : Oct 17, 2008

He did nothing wrong. Did not rip off anyone and broke no laws. Similar happened to me but I didnt even ask to make sure as he did. We all learn to see a bigger picture as we age and mature - maybe that will happen for you also.

[observantx]

Pressing charges on these crooks and getting guilty verdicts won''t do anyhting if all it results in is a slap on the wrist fine.

There needs to be real jail time, not Club Fed. There need to be REAL fines and revocations of licenses.

MAKE IT STICK AND MAKE IT HURT.

That''s the only way anything will change.

And when we get these guys where they belong, we need to apply the same regimen to the effing lobbyists and Congressmen that threw away all the regulations and safeguards that made this clusterfvck possible.

[bailmeout1]

Posted by tejasdemo at 11:40 AM : Oct 17, 2008

You are an idiot, typical of the hate from the left. It is impossible for a teenager to rip off the government. It was a statement of fact and I have given much back in return. Moron.

[tejasdemo]

Posted by bailmeout1 at 11:34 AM : Oct 17, 2008

Typical Republican BS. Rips the govt off ( because he can ). Then turns around and tries to blame somebody else for it.

I love dogs. A dog will knock over the garbage can in the kitchen--sit down--tuck it''s tail and beg for forgiveness.

Cats ? ( Republicans )...they will knock that same can over and look at you like you did it.

[bailmeout1]

I remember when I was A teenager. I worked in the summers and at night and all. Just pocket money for me and my GF. I made more than I spent though and saved up a bit. At one point I didnt have a job and just partied with my GF, we went everywhere and did everything - until the money ran out. I went over to unemployment figuring I could get a check and use it for gas money and get a job - any job. This was in completely liberal NJ. Well they proceded to (without any questions) print me out 29 individual weekly checks. I think it was like 8 grand or something. I was in shock, I even asked the woman to check it was ok. She said it was accumlulated and that I even qualified for something called Extended Benefits. There was no checking it out with the manager or anything. Of course I kept it and spent it partying more with my GF. haha Now in NJ, they did change some things to limit that, but that is just an idea on what happens in these Government Help-All schemes.

[bailmeout1]

I guarantee that six months after Obama is in our hospitals are filled to capacity and emergency rooms too you will need to speak Spanish. News Flash - Spain did not colonize this country!

[lochlan-2009]

"Banks, Subprime Lenders To Face Charges"

Don''t forget the representatives who changed the laws to make their fraud legal.

[bailmeout1]

And friggin of course California wants to go blue. You Southwestern undecided states better wake up.