July 01, 2008

HousingPANIC Stupid Question of the Day

Would you support a Mortgage Fraud Amnesty program?

Here's how it could work: The government would offer amnesty (with a fine or illegal proceeds payback) to individuals who admit to their fraud and to who else was involved, and then let the Justice Department focus on the corrupt ringleaders (i.e Mozilo), lenders (i.e. Countrywide and IndyMac), mortgage brokers, appraisers and realtors.

Assuming hundreds of thousands if not millions of people committed mortgage fraud these past few years, and that the undermanned, corrupt and incompetent US justice department doesn't have the resources or intelligence to enforce the laws of the United States anymore, I see an amnesty program as the only viable solution, if the goal is to imprison the top fraudsters while getting to the bottom of the scam that took down the US housing market.

I think it'd be interesting if law enforcement (or the IRS) called up every person who took out a liar's loan from 2001 - 2008 and offered them a deal. You'd be amazed at what we'd find out.


Anonymous said...

As long as a get a heads up of a couple of weeks as to when I should stop the mortgage fraud and go sraigth.


No amnesty and NO BAILOUTS.

Fuck 'em. All of them. They all lied and committed a felony.

Deport the illegals and fine and charge with a class 3 felony for their permanent record the rest of the guilty.

Suspend jail time if they rat out the other perpetrators in their individual scheme.


Anonymous said...

I like mass executions better.

It'll help traffic and all those nasty supply/demand issues.

Mike Hunt said...

If you have mortgage fraund then there is a good chance you have tax fraud (stated income not supported by taxes paid) and technically people owe a 1099 on the loss of the principle so the lender can write this off... so if you ask for mortgage fraud amnesty then you need to couple it with tax fraud amnesty.

Let me know when this happens so I can start sheltering all my income ASAP. When in Rome do as the Romans do!


Anonymous said...

No way we could put that many in jail. It could work.

Anonymous said...

they should make it a line on the 1040 tax forms.

did you commit mortgage fraud. enter names of accomplices in box 57a, and the amount of your gain in box 57b. divide box 57b by the number of accomplices named and add this to your box 57c...

Anonymous said...

They are criminals. The worst kind. If I am on the street and get mugged, the mugger gets 20 dollars and if he is caught, spends years in Jail.
These people openly worked in a conspiracy together to steal thousands of dollars from buyers of property and often lied along with liars in the appraisal and loan industry. Tell me, why are they any better than the robber? Is it because they are "White Collar" criminals? (which as a cop, I never understood the difference but I do know that if a poor man commits a crime he gets the book thrown at him because of money. However, big time crooks can hire big time lawyers and get off.)
Victor Hugo's "Les Miserables" is not far off it what it has to say about rich and poor and "crime".

Paul E. Math said...

I would support amnesty. For the most part, fraudulent borrowers were encouraged to do so by their lenders. The main crime these borrowers are guilty of is stupidity.

Also, we don't have jails big enough to hold all the fraudulent borrowers.

Nor are these borrowers likely to be repeat offenders as I do NOT propose that they be protected from foreclosure. Fraudulent borrowers must be foreclosed upon and that will be their punishment - they will live in shame and poverty for the next 7 years.

Amnesty would also have the great benefit of encouraging borrowers to rat on their loan officers and mortgage brokers who will then, in turn, rat out their superiors. I wouldn't give amnesty to loan officers for squealing but I might give them a reduced sentence. Whatever it takes to bring down the orange man at the top.

There is no punishment nor humiliation nor shame that is too extreme for Angelo Mozillo and the rest of his ilk.

keith said...

They would need to limit amnesty to persons with one or two residences only. More than that then they should be looking at jailtime as they were professional fraudsters (i.e. casey serin)

And it should start by the government seizing all Alt-A records, matching them up to IRS records, and sending notices in the mail with the offer.

If BofA can write the mortgage banker bailout bill, we can write this one eh?

Anonymous said...

Awe Keefer...can they become citizens too after they come clean on their mortgage fraud???

Go back to pumping gold...you're better at that!!!!!!!!

txgman said...

My amendments to your proposal...

1. Amnesty should be offered ONLY to people who lied about a single home purchase. More than one home = prosecution.

2. Anyone who overstated income by more than double their provable income would not be eligible for amnesty.

3. If they are foreclosed upon, they are not eligible for protection from the unpaid debt under bankruptcy, since it was committed in a fraudulent act.

4. We will create a new "debt fraud" flag to be used in credit reports. Unlike foreclosure or bankruptcy, the flag never expires from a person's credit. Future lenders may consider this flag when deciding to issue credit. All amnesty participants must agree to waive the right to contest the retroactive use of the flag.

Anonymous said...


All property flips and partnerships are not fraudulent. Fraud is committed when you lie or misrepresent the facts!

Many borrowers have relied on the advice of mortgage professionals when completing applications for, "Stated," loan products.

Admit it! If the professional said that it was ok, then you believed them. They would assure borrowers of no recourse based on stated terms.

This was a national procedure, and there are not enough jails in the world to convict everyone who did this; so don't just target african americans texas. Surely other races were involved and should be equally plastered all over the news.

Anonymous said...


Anonymous said...

The fraud continues today.

Today, my son got beat out of his first home( not investment) in an bank dutch auction because some flipper outbid him in a bank owned sale. The flipper got financing. How's that in today's market.

I thought banks were anti speculation.

Frank@Scottsdale-Sucks.com said...

That would work. I'm strongly opposed to jailing the mortgage fraudsters because it would be seriously expensive and to pay for it Osamabama would jack the top tax rate to 80% or 90% (which I'm sure he dreams about when he jerks off).

Reality said...

While I'm generally inclined to support amnesty for statutory crimes, such as drug posession, speeding, drinking on Sunday, consentual sodomy, or even tax evasion . . . all of which have no direct victim, I'm against natura crimes such as robbery, murder and forcible rape. Fraud is a natural crime against the counter party in a deal. If the borrower is told to lie, then the primary criminal party is the loan broker or loan officer, against the interest of the equity and bond holders of the bank or lending institution. The much smaller number of fraudulant loan brokers and fraudulant appraisers are the nexus, or the kingpins, of the crime wave.

Vicky Chrisner, Real Estate Consultant said...

Interesting... may I say from the front lines of this (I am a real estate agent, don't shoot me).... I ran around like Chicken Little screaming "The Sky Is Falling" every time I saw mortgage fraud... our brokerage reported it to the authorities (who at the time were NOT overwhelmed with this) and they did nothing. Consumers winked and said "everyone's doing it" and they were right. It was the herd mentality. I lost business because I wouldn't participate. Now, they want my tax dollars to help bail them out and they want amnesty?

I don't support full amnesty. But, we've all sinned. Most of these consumers are paying the price because of natural consequences. The professionals involved should be held accountable - who wants the lists of names? I've been saving them.

Anonymous said...

No, I don't want amnesty.

I want a plea bargain.

Anonymous said...

Response to Vicky -real estate sales person .

I appreciate the fact that you did not engage in the fraud ,but 85% of your fellow sales people did .

You know as well as I do that the real estate sales people set up the deal .The commissioned sales people knowingly set up unqualified buyers with crooked loan agents .

If people knew what the rules were ,they would be going after the real estate people along with the loan agents . The real estate sales people betrayed the people and should of reported the fraud in numbers . The pain and suffering and perhaps downfall of American
will be the result of the greed of your industry . Shameful and how you people take first time home buyers and lead them down the path to ruin .

If you were really sincere ,you would now turn in all the brokers and agents that you knew committed fraud to the FBI ,who are now interested in loan fraud .

Anonymous said...

Yes. But.

They'd have to have a criminal record for life.

I don't think anyone would be well served having these people in prison any more than we're well served having some stupid druggie in prison; but I'd like to see them with a little * next to their names for the rest of their lives.

/sign me: god takes too long

Reality said...


Thank you for sharing your experience. Yes, when the fraudsters ran rampant, the honest and scrupulous got hurt . . . that includes and especially the honest and scrupulous competitors. It must have taken enormous amount of discipline and integrity to stick to what's right in those the-insane-running-the-asylum years. Our society should encourage the honest and scrupulous business by punishing those fraudsters. Getting the unscrupulous punished will indeed make more room for the honest business men and women, and more importantly delivering the honest service that homebuyers deserve. Considering the enormous amount of money involved in RE, honesty and integrity (at least nothing illegal, no fraud) are also what all taxpayers deserve and should demand. Yes, I'd encourage to share the information you have with the FBI, especially the ones that you know were engaged in serial mortgage frauds. Financial fraud is not a victimless crime! It undermines the very foundation of constructive exchange between individuals, and between individuals and institutions. It's little different from robbery. In the case of our fiat central banking system, it's akin to arsonists setting entire blocks on fire!

Peahippo said...

The term "amnesty" implies that outside the amnesty, prosecution will take place.

That prosecution just isn't true in the case of mortgage fraud.

Considering how many people have committed mortgage fraud, and how many cases the FBI will successfully bring to trial, you're probably more likely to get into a bad auto accident than be convicted of mortgage fraud. Note how often people jump into cars, even drunk, and go driving off. The incidence of getting pasted on the road in some accident is hardly a deterrent to driving. Hence, there is no deterrence against mortgage fraud. NONE.

Keith, we love ya, but you've gotta stop with this dreamland shit that you're pushing. Mozilo won't be prosecuted. The FBI will continue to fumble its way through at most a few thousand cases (out of 500k that really, really need to be prosecuted) before relaxing once the focus of the public eye moves on. And the Congress will continue to make all kinds of bailout noises until Jan 21st, 2009.

The year 2008 is actually 1929. All subsequent dates must be put into that perspective.

Keith, once again, you're great and your blog is great, but you push certain forms of nonsense so much that I worry about your ability to discern facts from wishes.