Busted: Bankers and The Global Economy

August 27, 2008

Desperate Bankers, Desperate Times

witless regulation

witless regulation

To listen to the tone of regulators and lawmakers, you would think that bankers would be on their best behavior, especially with all the arrests early this summer for mortgage and banking fraud. “Crackdown efforts” are apparently failing as desperate bankers continue to commit banking fraud to keep surviving.

Mortgage Asset Research Institute (MARI), the mortgage information gathering arm of information monger Choicepoint is reporting that mortgage fraud is on the rise despite record lows in the number of loans issued. This makes the situation all the more alarming.

The study found that the number of fraudulent loans issued during the first three months of 2008 skyrocketed 42% compared with the same period in 2007. This is true, even considering a much lower loan rate to consumers.

The credit histories of many applicants are no longer good enough to get approved for mortgages in the declining economy, except through the creativity of brokers and loan officers. An identity theft level of as much as 6 percent is also playing a role in the banking chicanery, as the criminal element gets involved in shady and predatory banking.

witless lawmakers

witless lawmakers

Apparently many bankers haven’t learned a thing. Why bother, especially with idea of massive bailout protection by the Federal Government. The number of arrests for banking fraud hasn’t been huge in the banking community itself and many bankers appear to be escaping the net of the Feds. With that in mind, many bankers are willing to keep up the faith in bad banking.

Despite the press, the reality is that the structure of the banking industry has changed not one whit. Commission and loan volume are still the hallmarks of the mortgage banking industry. Overwhelmed regulatory agencies and legal eagles aren’t making a dent in the huge problem. Apparently, the government isn’t up to the task.

If a private institution like Choicepoint can query and discern the truth behind a continued banking and mortgage debacle, surely a public institution like the Federal Government can move in and close down immoral banking with all the subpoena and legal power at its control. Instead, government regulators show that they don’t have the will to deal with the national blight effectively. Bankers are going to continue to practice what they have learned to depend on. The poison must be rooted out of the system in order for the system to continue. In the meantime, “Wild West Mortgage Banking” is on the rise, with a stupified witless government on hand, unwilling or unable to quickly take corrective action.

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