Eric Holder Thinks 'Real Housewives' Commit Mortgage Fraud–But Not Bank CEOs


David Dayen: Eric Holder Thinks ‘Real Housewives’ Commit Mortgage Fraud–But Not Bank CEOs

David Dayen: Eric Holder Thinks ‘Real Housewives’ Commit Mortgage Fraud–But Not Bank CEOs

New Republic-

The unstated purpose of reality television is for viewers to feel superior to the poor saps on screen. And this week it is also apparently the purpose of the Department of Justice, which indicted two of the stars of “The Real Housewives of New Jersey” on Monday. In a case involving the Federal Deposit Insurance Corporation (FDIC) Inspector General, the IRS, the U.S. Bankruptcy Trustee and the U.S. Attorney’s office in New Jersey, Teresa Guidice and her husband Joe stand accused of cheating on their taxes, hiding assets from a bankruptcy court and, in what is described as a “mail and wire fraud conspiracy,” fraudulently obtaining several home mortgages with false applications from 2001 to 2008.

“The Giudices falsely represented on loan applications and supporting documents that they were employed and/or receiving substantial salaries when, in fact, they were either not employed or not receiving such salaries,” reads the indictment.


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3 Responses to “David Dayen: Eric Holder Thinks ‘Real Housewives’ Commit Mortgage Fraud–But Not Bank CEOs”

  1. Sarah says:

    What a joke, except it’s all real. Holder is there to protect too big to fail/prosecute.

  2. Sooooo! Housewives are a bunch of criminals huh? And bank CEO’s are just making mistakes on their choices of how to make money?
    Wall Street and the Financial Crisis: Anatomy of a Financial Collapse
    From Wikipedia, the free encyclopedia
    Jump to: navigation, search

    Wall Street and the Financial Crisis: Anatomy of a Financial Collapse is a report on the financial crisis of 2007–2008 issued on April 13, 2011 by the United States Senate Permanent Subcommittee on Investigations. The 639 page report was issued under the chairmanship of Senators Carl Levin and Tom Coburn, and is colloquially known as the Levin-Coburn Report. After conducting “over 150 interviews and depositions, consulting with dozens of government, academic, and private sector experts” found that “the crisis was not a natural disaster, but the result of high risk, complex financial products, undisclosed conflicts of interest; and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street.” [1] In an interview, Senator Levin noted that “The overwhelming evidence is that those institutions deceived their clients and deceived the public, and they were aided and abetted by deferential regulators and credit ratings agencies who had conflicts of interest.”[2] By the end of their two-year investigation, the staff amassed 56 million pages of memos, documents, prospectuses and e-mails.[3] The report, which contains 2,800 footnotes and references thousands of internal documents [4] focused on four major areas of concern regarding the failure of the financial system: high risk mortgage lending, failure of regulators to stop such practices, inflated credit ratings, and abuses of the system by investment banks. The Report also issued several recommendations for future action regarding each of these categories.

    The Financial Crisis Inquiry Commission released its report on the financial crisis in January 2011.

    1 Report findings
    1.1 High Risk Lending: Case Study of Washington Mutual Bank
    1.2 Regulatory Failures: Case Study of the Office of Thrift Supervision
    1.3 Inflated Credit Ratings: Case Study of Moody’s and Standard & Poor’s
    1.4 Investment Bank Abuses: Case Study of Goldman Sachs and Deutsche Bank
    2 Report recommendations
    2.1 Recommendations on high risk lending
    2.2 Recommendations on regulatory failures
    2.3 Recommendations on inflated credit ratings
    2.4 Recommendations on investment bank abuses
    3 Impact and reactions
    3.1 Media reaction
    3.2 Wall Street reaction
    3.3 Legislative reaction
    4 External links
    5 References

    Report findings

    The Report found that the four causative aspects of the crisis were all interconnected in facilitating the risky practices that ultimately led to the collapse of the global financial system. Lenders sold and securitized high risk and complex home loans while practicing subpar underwriting, preying on unqualified buyers to maximize profits. The credit rating agencies granted these securities safe investment ratings, which facilitated their sale to investors around the globe. Federal securities regulators failed to execute their duty to ensure safe and sound lending and risk management by lenders and investment banks. Investment banks engineered and promoted complex and poor quality financial products composed of these high risk home loans. They allowed investors to use credit default swaps to bet on the failure of these financial products, and in cases disregarded conflicts of interest by themselves betting against products they marketed and sold to their own clients. The collusion of these four institutions led to the rise of a massive bubble of securities based on high risk home loans. When the unqualified buyers finally defaulted on their mortgages, the entire global financial system incurred massive losses.
    High Risk Lending: Case Study of Washington Mutual Bank

    Through a case study of Washington Mutual Bank (WaMu), the Report found that in 2006, WaMu began pursuing high risk loans to pursue higher profits. A year later, these mortgages began to fail, along with the mortgage-backed securities the bank offered. As shareholders lost confidence, stock prices fell and the bank suffered a liquidity crisis.[5] The Office of Thrift Supervision, the chief regulator of WaMu, placed the bank under receivership of the Federal Deposit Insurance Corporation (FDIC), who then sold the bank to JPMorgan. If the sale had not gone through, the toxic assets held by WaMu would have exhausted the FDIC’s insurance fund completely.

    The report found that WaMu sold high risk Option Adjustable-Rate Mortgages (Option ARMs) in bulk, specifically to the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac).[6] WaMu often sold these loans to unqualified buyers and would attract buyers with short term “teaser” rates that would skyrocket later on in the term. The Report found that WaMu and other big banks were inclined to make these risky sales because the higher risk loans and mortgage backed securities sold for higher prices on Wall Street. These lenders, however, simply passed the risk on to investors rather than absorbing them themselves.
    Regulatory Failures: Case Study of the Office of Thrift Supervision

  3. As usual the government goes after the small guy and allows the biggest crooks to run them. Hopefully Elizabeth Warren can stop this one sided DOJ system.


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