Presented by Ricardo & Wasylik, PL

Previous post:

Next post:

Wall Street Covered Up Mortgage Problems Since 2007

Wall Street

by Mike on September 26, 2010

The Huffington Post reports that Wall Street knew it was peddling bogus mortgages as early as 2007.

During the height of the boom in 2006 and the period prior to its immediate end during the first six months of 2007, [financial firm Clayton Holdings] inspected home loans for Wall Street firms and government-backed mortgage giant Freddie Mac. Clayton looked at loans that the companies wanted to purchase from mortgage originators like New Century Financial, Countrywide Financial, and Fremont Investment & Loan. The company examined 911,039 mortgages, documents show.

Of the 911,000 loans that Clayton scrutinized, 72 percent either met the mortgage seller’s standards and other guidelines set by the buyer of the mortgages, typically Wall Street firms, or they had off-setting factors that allowed Clayton to give them a passing grade, like if the borrower who took out the mortgage put a lot of money down or had a very high income.

But 28 percent failed to meet those standards. Of those 255,802 mortgages that Clayton flagged for what were a variety of reasons, Wall Street ended up waiving 100,653 of them, or 39 percent of those loans that did not meet basic standards. And Wall Street firms didn’t share this with investors.

Is anyone really surprised that the whole deal is fraud from top to bottom? No wonder they have to submit fake ownership documents in foreclosure cases.

By the way… it’s not just Wall Street that knew—Freddie Mac knew as well. Could Fannie Mae have been completely in the dark?

( Photo Source / Photo Rights )

Want to know more? Contact us at Ricardo & Wasylik, PL.

Previous post:

Next post: