What Crimes Did They Commit - financial crisis

So I hear a lot of people saying the heads of Fannie May and Freddie Mac, as the private firms that failed should go to jail.

Why? What crimes did they commit? I seriously do not know.

Now I'm not stupid enough to believe that many mortgages were not fraudulently represented to borrowers, but that would be something that the actual mortgage lenders would be guilty of, not the companies that purchased/insured the bad loans.

So what crimes were committed by the executives of these failed institutions? Why should they go to jail?

Credit Default Swaps. A derivitive anybody with cajones and cash could get into. 250MMM for subprime, 500mmm for CDS gambles.

Let 'em go broke is what I say.

I am sure, as in any business segment, that some people in the mortgage business did some illegal things, but not anywhere near what this thing is about. I am certain that none of the big players did anything illegal. They gambled and lost, and are in the pockets of Democrats and Republicans alike.

If there is a bailout, it would be inetresting to see where all the money goes.

I like the idea of the Republican version of bailout - no taxpayer money used, just the institutions' money. I wish I could find some article listing what it is, or what even the Democrat version is.

Has anybody seen either?

insuring mortgages you know are sold to people that cannot afford them, or that are misrepresented may not be a crime, but it is criminal. It is immoral, it is wrong, and it is deceitful. I know they say this or that, but I have been involved in the mortgage business in a manner of speaking, what I was instructed to do, got me out of it really fast. Insurance companies will not insure you if you have a fatal illness, and these mortgages are much the same thing.

I am so much against giving them anything but the boot to live on the street, and some are expecting their severance pay................IF IF IF they get it, our president and congress and senate should each and everyone that voted for this, they should resign as being as bad as the very scum they are supporting. Not even Palin could get my vote back if McCain votes for anything that gives these scum their packages.

just my 2 cents worth.

Danny I do not disagree with your feelings that the acts are criminal even if they are not actually a crime, however, is it not also a reality that they are bound by law to actually insure those? And is it not also a law that they were also bound to make many of these loans? Doesn't all that go back to the seeds set by the Carter administration? I seem to recall many a conversation with my wife, back in her banking days (she was a commercial/private banker) where she would lament that the government regulations FORCED them to make loans in 'disadvantaged' areas or they would not be allowed to expand into neighboring counties. This was all at the start of the bank merger craze. If banks did not make loans on homes that were risky then the bank could not also make the more profitable commercial loans, open new branches in upscale areas, expand or merge. So banks went on building sprees where they would open up a branch in a bad part of a city, so they could simultaneously open up a branch in a nice growing suburb.

Now if I understand it, the GOP 'bailout' plan is not something that actually gives the banks money but allows them to somehow use equity they already have to lend money to prevent a liquidity crisis. If McCain votes for something like that then would you vote for him?

B_Skurka said:

Danny I do not disagree with your feelings that the acts are criminal even if they are not actually a crime, however, is it not also a reality that they are bound by law to actually insure those? And is it not also a law that they were also bound to make many of these loans? Doesn't all that go back to the seeds set by the Carter administration? I seem to recall many a conversation with my wife, back in her banking days (she was a commercial/private banker) where she would lament that the government regulations FORCED them to make loans in 'disadvantaged' areas or they would not be allowed to expand into neighboring counties. This was all at the start of the bank merger craze. If banks did not make loans on homes that were risky then the bank could not also make the more profitable commercial loans, open new branches in upscale areas, expand or merge. So banks went on building sprees where they would open up a branch in a bad part of a city, so they could simultaneously open up a branch in a nice growing suburb.

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This hits the nail on the head.
During Clinton/Carter and when the democrats controlled Washington.
They rewrote the bank’s lending practices for mortgages where the poor/minorities could buy their own home. This was affordable housing.
The leaders of Jenny, Freddie did nothing wrong as they went by the rules. The banks were just following the rules also. They (CEO’s) took their bonuses and ran (business was great).
The democrats got millions in their reelection coffers. BO was one that received the most. McCain and others did receive a small amount of money in campaign contributions which are not illegal.
The Democrat minority caucus’s are the overseers. Talk about unsound banking practices. There is a lot more that I will not go into like auto loans, etc
Bush and the republicans tried to fix this problem but were laughed out of the chambers..

Darroll

B_Skurka said:

Danny I do not disagree with your feelings that the acts are criminal even if they are not actually a crime, however, is it not also a reality that they are bound by law to actually insure those? And is it not also a law that they were also bound to make many of these loans? Doesn't all that go back to the seeds set by the Carter administration? I seem to recall many a conversation with my wife, back in her banking days (she was a commercial/private banker) where she would lament that the government regulations FORCED them to make loans in 'disadvantaged' areas or they would not be allowed to expand into neighboring counties. This was all at the start of the bank merger craze. If banks did not make loans on homes that were risky then the bank could not also make the more profitable commercial loans, open new branches in upscale areas, expand or merge. So banks went on building sprees where they would open up a branch in a bad part of a city, so they could simultaneously open up a branch in a nice growing suburb.

Now if I understand it, the GOP 'bailout' plan is not something that actually gives the banks money but allows them to somehow use equity they already have to lend money to prevent a liquidity crisis. If McCain votes for something like that then would you vote for him?

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thanks for the education on this. I had heard snipits on the reason for the loans, and guess I attributed some shady bankers with what the law required.

as long as they do not get this money in hand, yes I would vote for him. If he votes to give them this, only to lend it out (this is a bandaid on a artery) then they are not fixing the problem, sounds like the laws.

insuring those, meaning the terminally ill, no they do not have to insure anyone who can not pass the physical

darroll said:

Bush and the republicans tried to fix this problem but were laughed out of the chambers..

Darroll

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If I have my chronology correct, and I'm not sure I do, there were warning flags being raised about this as early as 1995 when Fannie & Freddie's accounting practices were called into question, then again before 2000, didn't Greenspan start to issue warnings, and I think in 2001 or 2002 some Republicans started to raise flags on the House/Senate floors.

Seems to me that Barney Frank was able to muster enough votes to shut down every attempt. Frank is the guy in charge of the committee today that is leading much of the negotiating. Frank, by the way, received more money from banks than any other member in congress over the years. Obama has received more since he entered office than any other member . . . no wonder Obama doesn't want to suspend his campaign, head to Washington and work to fix this. . . he is part of the scandal.

B_Skurka said:

If I have my chronology correct, and I'm not sure I do, there were warning flags being raised about this as early as 1995 when Fannie & Freddie's accounting practices were called into question, then again before 2000, didn't Greenspan start to issue warnings, and I think in 2001 or 2002 some Republicans started to raise flags on the House/Senate floors.

Seems to me that Barney Frank was able to muster enough votes to shut down every attempt. Frank is the guy in charge of the committee today that is leading much of the negotiating. Frank, by the way, received more money from banks than any other member in congress over the years. Obama has received more since he entered office than any other member . . . no wonder Obama doesn't want to suspend his campaign, head to Washington and work to fix this. . . he is part of the scandal.

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Right On.

I hope they have some smart financial people around for the supposed fix. Isn’t it great having idiots running the train?
d

darroll said:

Right On.

I hope they have some smart financial people around for the supposed fix. Isn’t it great having idiots running the train?
d

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What is worse is that would could end up with an even bigger idiot running the train after the November elections

OK, this is what irks me.

1. those that could loose their house due to all this mess, wont get any help keeping it from what i have read:

Banks not only have slowed lending to individuals and businesses, they have stopped making loans to each other. The rescue plan should help restore confidence to financial markets.
There are other winners, too, if the bailout works as intended: anyone soon trying to borrow money — for cars, student loans, even to open new credit card accounts.
Top executives at troubled financial institutions, on the other hand, are in the losing column because the proposal would limit their compensation and rules out "golden parachutes."
Of course, these executives may take solace in knowing their jobs still exist.
Investors, including the millions of people who hold stock in their 401(k) and pension plans, should benefit. Failure to reach a deal over the weekend could have sent stock markets around the world tumbling on Monday.
Homeowners faced with foreclosure or those who have lost their homes get little help from the agreement. Nor will it help people whose houses are worth less than what they owe get refinancing or take out equity loans.

http://news.yahoo.com/s/ap/20080928/ap_on_bi_ge/rescue_winners_losers_3

2. as read above those that ran these companies will get to keep their jobs, with limited income................uh how about 6 bucks an hour, these guys have begged to be bailed out, they have not even mentioned fixing the laws that got them here and they keep their jobs.......

it will take what 6 years now to weed out the garbage that did this, and if they dont fix the problem, we will have to do it again............

sounds like some of bushie boys buddies win out big, and we get stuck in the ass with the bill

Howdy,
I dont know about you folks but the ones calling the shots are all millionaires and have nothing in common with me. These people are rich and have never had to work a day in their lives. All these people do is talk and look down their noses at the working class. It is a shame that we are led by professional talkers. Have a goodun!!

Ross 650 said:

Howdy,
I dont know about you folks but the ones calling the shots are all millionaires and have nothing in common with me. These people are rich and have never had to work a day in their lives. All these people do is talk and look down their noses at the working class. It is a shame that we are led by professional talkers. Have a goodun!!

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I just noticed this thread. Ive been staying out of this part of the forum trying to focus on less stress reminders of whats going on outside of what I have going on. It seems that everything was covered including the bullshit Credit Default Swap that was the worst idea they could have thunk of.
Also it doesnt take a frekin genius to KNOW this was going to happen. Im horrible at math and not so hot in stocks and such but even I KNEW this was going to happen! Ive been posting about it for more than a year.

When you make credit accessable so easily in this economic system..... and then you hammer the people that bought into houses.... you destroy the gold based currency. Banks creating more cedit out of NOTHING. NO backing of the Dollar! Add that to good jobs lost to other countries more many reasons. Mainly the US Gov't just not allowing it... but encouraging it!!!

ANYHOW....... Ross 650, youre damn right. I would say 80% of the time money breeds money. They dont know what work IS. Im damn lucky to belong to a group of folks at FF that DO understand hard work. But millions of wealthy Americans have the mind of children because they have skirted real work.

ddrane2115 said:

sounds like some of bushie boys buddies win out big, and we get stuck in the ass with the bill

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Oh ya, no Democrats made any money off this. They are squeeky clean. Or turned themselves as soon as they realized they were doing anything illegal, or, if legal, immoral. Yup, these Democrats are model citizens.

Remember what got us into this mess. Democrats.

waybomb said:

Oh ya, no Democrats made any money off this. They are squeeky clean. Or turned themselves as soon as they realized they were doing anything illegal, or, if legal, immoral. Yup, these Democrats are model citizens.

Remember what got us into this mess. Democrats.

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I was speaking of the boys in the companies that just got a bail out courtesy of the US govt. I am aware of how it started, and how it will again need to be done. They also did not fix the laws that are broke, just a bandaid on the bleeding

waybomb said:

Oh ya, no Democrats made any money off this. They are squeeky clean. Or turned themselves as soon as they realized they were doing anything illegal, or, if legal, immoral. Yup, these Democrats are model citizens.

Remember what got us into this mess. Democrats.

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And how did Democrats get us in this mess?

The Community Reinvestment Act of 1977.

Wiki-Link Boy, did the libby spin doctors attack Wiki on this to cleans it!

More, Government version of More, The 'Fed' version of More, you get the picture...

Just search "Community Reinvestment Act".


In a nutshell: It is a law that forced banks to lend to people who don't qualify for the loans they are applying for.

Deadly Sushi said:

And how did Democrats get us in this mess?

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CRA!!! My wife got into banking a few years after that passed and it really made (forced under duress) banks do stupid things with loans (like make bad loans).

In related news; the $700 billion bail out bill just failed in the house.
The dow is down by almost 600 points.

Now they are going to try to bail out the automobile companies.
Is this whole mess a vote getter for BO?
Then…………. The foreign banks are pissed at us for selling AAA paper that is worthless as the people are not paying their mortgages. .
Sushi,
The democrats were behind this mess from the Carter/Clinton years when they started the affordable housing thing.
No money down, do not do a credit check. Jenny/Freddie (I call it) backed and approved the loans.
Let the markets run their course and no bailout.
All banks are not dumb and some will make it.
d

darroll said:

Now they are going to try to bail out the automobile companies.

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I believe they authorized emergency low interest guaranteed loans for the auto industry over the weekend!

B_Skurka said:

CRA!!! My wife got into banking a few years after that passed and it really made (forced under duress) banks do stupid things with loans (like make bad loans).

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Yes, this is true. A part of my business is greatly effected by lending practices so I have been forced to keep myself educated on these issues. I actually have 2 (previous) senior bankers working for me right now. As I agreed, yes, lenders were forced to grant loans to certain segments of the population that wouldn't normally qualify for the loans they received. However, those people did sign a document that said that they promised to repay those loans. These very people make up the heart of the "moveon" group.

Their theory in life is take what they can grab and then "moveon" to the next freebie. They never plan for the future, they never plan for bad times, they never plan on what to do if they make less money. Heck, a large percentage of them never planned on making the payments on the loans they were given yet they signed the papers saying they promised to do so. At some point personal responsibility must come into the mix. I still see what may be a majority of people applying for loans thinking that they don't need to worry about making the payments because the banks will never loan them money they don't think they'll be able to repay. If they can't repay that money, then it is the bank's fault. Yet these very same people can afford three vacations a year, 2 cases of beer a week, two cartons of smokes a week, celll phones and a $200 a month cable bill.

I've seen this crash coming for a long time but my theory was that it was going to happen because of the way a huge segment of our population has absolutely no concept of taking responsibility for their actions. My father and grandfather beat it into my head that I never, ever, ever borrow anything that I cannot repay. No excuses apply. There is no "but I lost my job", no "gas is too expensive", no "cable prices have gone up", no "I can't drive a used car" or "I deserve to live in a bigger house"! I understand that it is hard to grow up and live this way, but that is the way I was taught. I never beat anyone out of a dime and I don't owe anyone a dime. Sure, I could have driven a lot nicer cars, lived in a lot bigger homes, taken a lot nicer vacations, but I lived under the philosophy that I don't spend money I don't have.

Having said that, I feel that lenders who preyed on those who didn't understand the terms of their loans should face the music and the executives who bilked corporations out of millions by cooking the books for personal gains should be prosecuted. What is right is right and what is wrong is wrong. I have no desire to pay for people who lived way beyond their means just because someone (a lender) believed them when they promised to repay the money they borrowed. I guess this same theory is why I am repulsed by the ads I hear on the radio each and every day bragging how they can get you out of having to pay the IRS money you owe. Excuse me, but if you OWE the money, why shouldn't you pay it?? I sure in the hell have paid my portion! Like it or not, that is the way Dargo views borrowing things and how you are responsible to do what you promise to do.