Greed, Thy Name Is Mortgage Bankers

Posted by | May 18, 2011 09:45 | Filed under: Top Stories

by Stuart Shapiro

Mortgage bankers were among the principal villains in the events that precipitated the financial crisis.  After the events of 2008, a naive person would expect such bankers to be more circumspect in their behavior.  If not humble, then perhaps at least wary of being blamed for causing more problems.  Wrong!

A set of confidential federal audits accuse the nation’s five largest mortgage companies of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans, four officials briefed on the findings told The Huffington Post.

The five separate investigations were conducted by the Department of Housing and Urban Development’s inspector general and examined Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial, the sources said.

The linked article has the complex details of the bad behavior by the mortgage bankers.  While this news can be used to argue against the bailouts that followed the financial meltdown, it should also be yet another piece of evidence that strict government oversight is necessary of any corporation receiving benefits from the public trough.

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Copyright 2011 Liberaland
By: Stuart Shapiro

Stuart is a professor and the Director of the Public Policy
program at the Bloustein School of Planning and Public Policy at Rutgers
University. He teaches economics and cost-benefit analysis and studies
regulation in the United States at both the federal and state levels.
Prior to coming to Rutgers, Stuart worked for five years at the Office
of Management and Budget in Washington under Presidents Clinton and
George W. Bush.

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