Let's Set the Record Straight on Bank of America, Part 2: Eliminating Foreclosure Fraud

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Let’s Set the Record Straight on Bank of America, Part 2: Eliminating Foreclosure Fraud

Let’s Set the Record Straight on Bank of America, Part 2: Eliminating Foreclosure Fraud

William K. Black and L. Randall Wray

Posted: November 5, 2010 01:23 PM

This is the second installment of a two-part series. Read the first here.

We have explained in prior posts and interviews that there are two foreclosure-related crises. Our first twopart post called on the U.S. to begin “foreclosing on the foreclosure fraudsters.” We concentrated on how the underlying epidemic of mortgage fraud by lenders inevitably produced endemic foreclosure fraud. We wrote to urge government policymakers to get Bank of America and other lenders and servicers to clean up the massive fraud. We obviously cannot on rely solely on Bank of America assessing its own culpability.

Note also that while we have supported a moratorium on foreclosures, this is only to stop the foreclosure frauds — the illegal seizure of homes by fraudulent means. We do not suppose that financial institutions can afford to maintain toxic assets on their books. The experience of the thrift crisis of the 1980s demonstrates the inherent problems created by forbearance in the case of institutions that are run as control frauds. All of the incentives of a control fraud bank are worsened with forbearance. Our posts on the Prompt Corrective Action (PCA) law (which mandates that the regulators place insolvent banks in receivership) have focused on the banks’ failure to foreclose as a deliberate strategy to avoid recognizing their massive losses in order to escape receivership and to allow their managers to further loot the banks through huge bonuses based on fictional income (which ignores real losses). We have previously noted the massive rise in the “shadow inventory” of loans that have received no payments for years, yet have not led to foreclosure:

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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CONTROL FRAUD | ‘If you don’t look; you don’t find, Wherever you look; you will find’ -William Black

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2 Responses to “Let’s Set the Record Straight on Bank of America, Part 2: Eliminating Foreclosure Fraud”

  1. Meet One Of The KEY Players Making Foreclosure Fraud Happen. Meet Jo Ann Caudle, acting as Assistant Clerk of Superior Court for Forsyth County North Carolina. (This was a BOA foreclosure)

    http://absentcapacity.wordpress.com/2010/11/05/a-key-player-in-the-foreclosure-fraud-mortgage-crisis/

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