Federal Audits Find 4 Biggest Banks Guilty of Fraud
Bank of America: FRAUD
JPMorgan Chase: FRAUD
Wells Fargo: FRAUD
Ally Financial: FRAUD
It looks like they all violated the False Claims Act, which was a law passed during the Civil War to stop firms from swindling the Government.
From a Huffington Post exclusive:
WASHINGTON -- A set of confidential federal audits accuse the nation’s five largest mortgage companies of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans, four officials briefed on the findings told The Huffington Post.
full article here:
The audits were conducted by the Department of Housing and Urban Development’s inspector general.
another excerpt from the article:
The resulting reports read like veritable indictments of major lenders, the sources said...
The audits conclude that the banks effectively cheated taxpayers by presenting the Federal Housing Administration with false claims: They filed for federal reimbursement on foreclosed homes that sold for less than the outstanding loan balance using defective and faulty documents.
Two of the firms, including Bank of America, refused to cooperate with the investigations, according to the sources. The audit on Bank of America finds that the company -- the nation’s largest handler of home loans -- failed to correct faulty foreclosure practices even after imposing a moratorium that lifted last October...
The Justice Department is now contemplating whether to use the HUD audits as a basis for civil and criminal enforcement actions, the sources said. The False Claims Act allows the government to recover damages worth three times the actual harm plus additional penalties.
These five mortgage behemoths (handling three-fifths of all US mortgages) apparently offered to settle last week for a collective 5 billion dollars, but the offer was deemed to be much too low.
In my opinion, as far as 'additional penalties' go, there should also be jail time for the executives that concocted the scam. I have no idea whether or not that's on the table.
Let us hope this is the beginning of at least a modicum of justice being served to the Big Banks that created the housing bubble for personal profit, to the detriment of the country.
There's more bad news for three of the big banks regarding fishy mortgage-related practices. New York's Attorney General, Eric Schneiderman has requested info and documents from Goldman Sachs, Bank of America and Morgan Stanley pertaining to how they bundled and securitized mortgages. According to the New York Times, the request indicates that they are conducting an investigation into possible criminal activity.
full NYT article here: