By Kevin Leland
“ We must hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.
That is precisely what we intend to do. And the good news is that we aren’t starting from scratch.
Over the past three years, we have been aggressively investigating the causes of the financial crisis. And we have learned that much of the conduct that led to the crisis was – as the President has said – unethical, and, in many instances, extremely reckless. We also have learned that behavior that is unethical or reckless may not necessarily be criminal. When we find evidence of criminal wrongdoing, we bring criminal prosecutions. When we don’t, we endeavor to use other tools available to us – such as civil sanctions – to seek justice. My number one to commitment to the American people is that we will continue to devote significant resources to combating financial fraud and be as aggressive and creative as we can be in holding accountable those who, in violating the law, contributed to the financial crisis.”
What are civil sanctions?
According to Legal-Dictionary Free Dictionary.com
To assent, concur, confirm, approve, or ratify. The part of a law that is designed to secure enforcement by imposing a penalty for violation of the law or offering a reward for its observance.
Sanction is a broad term with different meanings in different contexts. Sanction can be used to describe tacit or explicit approval. Used in this sense, the term usually is used in assigning liability to a party who was not actively involved in wrongdoing but who did nothing to prevent it. For example, if the upper-level managers of a business knew that their employees were using unfair employment practices and did nothing to stop them, it may be said that the managers sanctioned the unfair practices.
Investigation > Reward + Penalty = Justice
So let’s put this in context of mortgage fraud, and come up with some aggressive and creative sanctions to hold the mortgage scammers, some of whom I worked shoulder to shoulder with at banks like North American Mortgage (Dime Bank, later, Washington Mutual) and the infamous Countrywide Home Loans.
You know, I really like the idea of a reward-side to this sanction definition. People get paid a lot of (tax-payer) money to investigate and prosecute crime and other wrongdoing. People like me, do it for free. But I’m getting tired of being a good-time-charlie with this shit. Not because I’m sick of being poor –believe it or not, I’m finding a lot of power in my poverty that I’m not yet ready to exchange for a good, steady income –But, because I’ve got kids, and they’ve got college tuition to pay, and I want to help them. Investigating and informing is hard work, and it digs you in a hole. How? Have you ever seen a single ad that looks like this:
WANTED: Tattle-Tail. Countrywide Home Loans is currently seeking narks to work undercover in our mortgage lending department. You will be responsible to snoop around the office, look over the shoulders of the people who hire you, eaves drop on your fellow professional mortgage representatives, butt into their business and make sure they are not screwing our clients, no matter how many tens of millions they are making for our boss, Angelo Mozilo. When you discover them doing something illegal, fraudulent or unethical, you will immediately request to be called into your manager’s office to confront them with their wrongdoing. While working in this capacity, you will earn as much as you can by closing legitimate refinance deals, at half the commission or less than what the people you will be investigating make in commission on their sketchy deals. This is a temporary position, obviously, because you will be fired as soon as you confront your boss with the unfair business practices he or she sanctions, and your fellow loan officers abuse, to make five-figure commission checks every month, as long as the regulations or lack there of continue to allow us to ‘legally’ churn this money machine –we’ll wish you luck in your subsequent search for employment… you rat.
Anyone hiring a rat? I’m good. I’ve got references, and no connections to organized crime. I’ll work for donations to my kids’ college fund.
Janis Joplin: Freedom’s just another word for nothing left to loose
This lack of opportunity I’m facing in life right now, brought on myself by not being an “opportunist” or a “team player” and trying to always put honor and justice before status and money…has got its good points: Not having to kiss anybody’s ass or keep anyones dirty little secrets in exchange for a paycheck and some douch-bag bosses esteem. Along with American freedom of speech, and WordPress‘ uncensored blogging technology I’ve got a license to bust some serious balls!
How can I earn college tuition money by busting bankers’ balls?
I’ve got some good prospects on that, as an investigative blogger, but I’m not going to reveal them. That’s my business. Instead, I’m going to focus on the investigation, and do whatever I can to cooperate and inform. I’m going to suggest often, that when the government imposes sanctions on the wrongdoing that it can’t prosecute criminally, that a percentage of the fine money collected be rewarded to informants who did not take part in, or profit from the fraudulent or unethical practices.
To compete with these mortgage bankers –at their own game…Rewards to whistleblowers should be paid out of the fines levied against the scammers they help bust, by a commissions structure just like they were paid from for screwing American homeowners. It was that commission structure that caused one of the most common loan officer frauds that I witnessed: Max premium deals
The loan officer/real estate agent/appraiser/title insurance/closing attorneys/home inspectors/flood insurance/mortgage insurance fee and commission structure caused the entire housing market bubble. It was amazing. In RI, houses doubled in value in three years. When that bubble burst, it was devastating. Two houses I owned, and built myself, lost $250,000 in value in just 70 weeks. Soon after, they were taken out of my possession by foreclosure and divorce. One of them just sold for $74,025.00. They were each appraised at $320,000 five years earlier. Insane? Yup.
Paying whistleblowers a reward, a percentage of the amount of fines and restitution their investigative / informant work brought back to taxpayers, isn’t a novel idea. The IRS has a policy that does just this sort of thing. However, that is more for corporate bean counters and big dollar amounts…again, the little guy gets left out of the system. But maybe this will change. I’m going to do this Bank Investigation Content for Bangari anyway. At the very least, it will bring traffic to our blog, and 20% of the revenue the traffic brings goes to The Freelancers Union and the Children’s Miracle Network. If the government wants to cut me a check for a percentage of the sanction money they collect from the former bosses and co-workers I tell on, I’ll gladly put it toward my kids college fund. That would be poetic justice considering how the $350,000 in home equity that I was going to tap into for those expenses, is gone now, not so indirectly, because of their scamming, and reckless bullshit.
Housing Market Crash: All My Fault
Read this post to find out what a max premium deal is.
*This content can be shared. Creative Commons: BY SA
- Attorney General Holder Speaks at the Announcement of the Financial Fraud Enforcement Task Force’s New Residential Mortgage-backed Securities Working Group (mariokenny.wordpress.com)
- 2007 RI Housing Market Crash: All My Fault (bangaricontentgallery.com)
- Feds shut down high-tech mortgage scammers (cbsnews.com)
- Treasury shuts down mortgage scammers who used Google ads (zdnet.com)
- Weak Economy Is a Boom Time for Financial Scammers (dailyfinance.com)
- Fair Game: Mortgage Task Force Has Fancy Name, but Will It Get Tough? (nytimes.com)