William K. Black: Examining Lending Discrimination Practices and Foreclosure Abuses

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William K. Black: Examining Lending Discrimination Practices and Foreclosure Abuses

William K. Black: Examining Lending Discrimination Practices and Foreclosure Abuses

William K. Black

University of Missouri at Kansas City – School of Law
March 7, 2012

Abstract:     
The incidence of fraud in stated income loans is 90 percent. It is overwhelmingly the lenders and their agents that prompted these frauds. Over two million fraudulent mortgage loans were made in 2006 alone. It was overwhelmingly fraudulent loans to borrowers who lacked any ability to repay their loans out of their income that caused the housing bubble to hyper-inflate. Endemic accounting control fraud in the origination of mortgages led to creation of ‘echo’ fraud epidemics in other contexts, including widespread appraisal fraud, endemic fraud in the sale of mortgages and mortgage derivatives, widespread predatory lending targeting Latinos, blacks and the elderly, and endemic foreclosure fraud. Fraudulent lenders use compensation to create perverse incentives in which bad ethics drives good ethics out of the marketplace. Fraud begets fraud. The federal government, California, and dozens of financial firms have sued the largest banks for fraud, yet the Justice Department refuses to even conduct a meaningful criminal investigation of the largest banks. Absent vigorous financial regulators that understand control fraud and make reducing and sanctioning such frauds their top priority the prosecutors cannot succeed against an epidemic of accounting control fraud. Financial regulators who make the necessary criminal referrals and provide the FBI with the expertise to identify and investigate accounting control fraud mechanisms are essential if we are to prevent or prosecute an epidemic of such frauds. Effective financial ‘regulatory cops on the beat’ are essential to our ability to prosecute elite white-collar criminals.

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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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3 Responses to “William K. Black: Examining Lending Discrimination Practices and Foreclosure Abuses”

  1. Ken Hansen says:

    Our Justice Department does nothing. This is clearly the capture and misuse of power by officials for illegitimate private gain. History shows us again and again the horrible results of these vast social inequalities, yet like a herd going over a cliff, the same predictable patterns continue.

  2. Charles Reed says:

    Dear Mr Black, look into Ginnie Mae having possession of Blank Notes and it will explain why government is not willing to prosecute because it will have to prosecute itself.

    Here we have a corporation that is wholly owned by us the taxpayer who is allowing fraudulent foreclosure to take place by Lenders it has conspired with along with MERS in the case of the government insured mortgage loans that Washington Mutual Bank placed in Ginnie Mae’s mortgage backed securities (MBS) pools that Wells Fargo Bank was and is servicing.

    What I am talking about is that trillions of dollars in Ginnie Mae MBS are worthless because there is no underlying collateral!

  3. Oliver Wendell Holems says:

    From now on, we–voters, veterans, and homeowners– should demand that O’Wallstreetbama appoint this Honorable man to an appropriate position where he can do God’s work: Justice for the wronged homeowners whose properties were stolen by theives (banksters) and Regulators who continue to look the other way as our live are ruined….

    Mr. President: Repent to your former supportrs and right what was wrong: Appoint The Honorable Bill Black as Secretary of Treasury.

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