Monday, July 14, 2008

Some Thoughts On The Mortgage Crisis

I want divest from Trans-rights for a moment and talk about the mortgage crisis.

Mainly I have many questions…
What is being done to real estate brokers who knowingly went along with fraudulent loans?
What is being done to mortgage brokers who knowingly went along with fraudulent loans?
What is being done to mortgage companies who knowingly approved and encouraged fraudulent loans?
Where were the auditors?
Where were the federal regulators?

I got hit bad in this fiasco, being of retirement age, I started converting many of my stocks in my 401(k) and IRA’s to fixed income bonds. I wanted my investments to be safe so I made sure my stockbroker only invested in AAA bonds, well now many of those bonds are junk bonds. I think that it is criminal what has happened, the real estate and mortgage broker falsified federal documents (the HUD loans applications) and the mortgage companies encouraged them.

A good number of years ago I got called for jury duty for the Federal Court in Hartford and one of the cases that they voir dire was for a person who falsified his income on his HUD loan application. Do you think that any of these brokers or companies executives will be arrested? Is the FBI investigating any of these frauds now?

The Republicans say they are for less government regulations, but most of those regulations were developed over time because business and industry showed that they could not be trusted. Just look at the last year, do you remember when at the planes were grounded because the FAA didn’t inspect the planes, instead they let the airline inspect their own planes. How many different food recalls have we had in the last twelve months because the FDA is lax inspecting the food? Now we are having all of these banks and mortgage companies failing because the FDIC did not do their job. Do you remember Enron? Where was the SEC then?

Who gets hurt when the regulators look the other way, we do.

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