William K. Black, author and law and criminology professor, and ex-bank regulator extraordinaire, has an investigative series on how the FBI and the Department of Justice have failed the American homeowner/taxpayer. The thesis of this third part of his series is below, and the full article is here:
The MBA conned the FBI into a “partnership” with the trade association of the “perps.” In my prior column I showed the first product of the partnership – a poster warning customers not to defraud banks but ignoring banks defrauding customers. This column discusses the more consequential and damaging product of the FBI/MBA partnership. The MBA presented a definition of “mortgage fraud” under which the bank is always the innocent victim and never a perpetrator. Because the FBI and DOJ did not draw on the banking regulators’ expertise due to the death of criminal referrals by the agencies the FBI fell for the MBA con.
The second product of the MBA and the FBI’s Faustian bargain is a purported definition of “mortgage fraud.” The FBI’s March 8, 2007 press release announcing its “partnership” with the FBI contained the same fake definition as the FBI’s 2010 mortgage fraud report quoted below. Note that the MBA con of the FBI was so successful that the FBI parrots the definition uncritically, year after year, as if it were revealed truth. Unlike Gaul, all mortgage fraud is divided into only two parts – and the bank and its elite officers are always the victims.
The FBI’s 2010 report is a Tea Party fantasy due to the MBA’s con. It reports only on the vastly smaller and less damaging mortgage frauds by lower social status individuals who exploited the fraud vulnerabilities that the officers controlling the lenders created when they gutted their underwriting and suborned their internal controls to make it possible to make hundreds of thousands of bad loans pursuant to the accounting control fraud “recipe” for a lender. The FBI report ignores the twin massive control frauds by mortgage originators that drove the financial crisis and led to endemic fraud in the sale of fraudulently originated mortgages to the secondary market. The MBA has conned the FBI in 2007, and the FBI has remained conned. The result is that the FBI operates under a faux definition of “mortgage fraud” in which it is conceptually impossible for the banks and their controlling officers to be criminals. The FBI is treating even the Nation’s most fraudulent mortgage lenders as the innocent “victims” of fraud by primarily low social status customers who often lack any financial sophistication.
Other Findsen Law pieces on Bill Black: