FBI official warned of widening loan fraud in 2004

[ColbertWatcher]

FBI saw threat of mortgage crisis
A top official warned of widening loan fraud in 2004, but the agency focused its resources elsewhere.
By Richard B. Schmitt, Los Angeles Times Staff Writer
August 25, 2008

WASHINGTON -- Long before the mortgage crisis began rocking Main Street and Wall Street, a top FBI official made a chilling, if little-noticed, prediction: The booming mortgage business, fueled by low interest rates and soaring home values, was starting to attract shady operators and billions in losses were possible.

(...)

Today, the damage from the global mortgage meltdown has more than matched that of the savings-and-loan bailouts of the 1980s and early 1990s. By some estimates, it has made that costly debacle look like chump change. But it's also clear that the FBI failed to avert a problem it had accurately forecast.

(...)

The FBI and its parent agency, the Justice Department, are supposed to act as the cops on the beat for potentially illegal activities by bankers and others. But they were focused on national security and other priorities, and paid scant attention to white-collar crimes that may have contributed to the lending and securities debacle.

(...)

"The approach was certain to bring symbolic prosecutions and strategic defeat."

(...)

Officials said they began approaching mortgage companies and others in an attempt to raise awareness about the growing fraud problem. But the lenders had little incentive to cooperate because they were continuing to make money. Black says that in many cases, they were part of the fraud.

(...)

Many of the cases have been relatively small, however, with about half the investigations involving losses of less than $1 million -- the size of two or three loans.

But the tepid response also reflects a broad realignment of law-enforcement priorities at the Justice Department in which mortgage fraud and other white-collar crimes have been subordinated to other Bush administration priorities.

(...)

"Until there is a catastrophic loss, there is no incentive to investigate criminal conduct," said Cynthia Monaco, a former federal prosecutor in New York.

--Los Angeles Times

While the GOP's DoJ was busily targeting liberals, peace activists and seeking to hire and promote Christers, another disaster is ignored.

[glowing]

1. Well, how in the world would they want to authorize the FBI to look into their own people?

Most of the peons would be in jail, rather than ruining the country.

[ColbertWatcher]

2. Plus, "ignoring high tech fraud" is not as sexy as "John Edwards had sex!" n/t

[glowing]

4. Oh, how could we forget about that.. It was just so much fun to run the Edwards

had sex thru a microscope... Apparently, when Democrats have sex, its much more exciting than when GOPers have sex.. Or perhaps, people don't want the mental image of Vitters in diapers or Larry wide-stance in a bathroom. I find it amusing that they dropped it pretty fast when affairs and mistresses started to come back around and re-focus on John McCain's mistress, now wife Cindy-Loo-Hoo. AND then, once again, what about that lobbyist who disappeared all of a sudden from the stage? I know its disgusting to think McCain can even get it up, or that anyone would want to have sex with that old man.. I wonder if the McCain's sleep in different wings of their mansions.. I almost imagine that if they do share the same bedroom, that they have seperate sleeping beds.. like old people do.. My husband's grandparents sleep in diff. beds.. they're those adjustable beds.. she needs to sleep diff. than her husband, and at 80, sex is just not happening.

[ColbertWatcher]

11. Share the same bed? But which bed? In which house? n/t

[Quantess]

3. Maybe her "warning" merely served to get others in on the action

and cash out while they could!

[ColbertWatcher]

5. "His"

Chris Swecker (pictured below)



was the agent who warned reporters in 2004.

[Quantess]

6. Ooops. That's one ugly woman.

I skimmed it and assumed "he" was named Cynthia.

[ColbertWatcher]

7. Cynthia is the name of a prosecutor quoted for the article, but ...

...I skimmed too and posted random bits hoping to copy the best parts.

Sorry if it was confusing.

[SoCalDem]

8. I "knew" it before that..

Kids who are friends of my son, were getting married and buying big-ole houses they could never ever ever afford..with interest only loans...

Score:

kids= 0
banks= 0

Of the 3 who did it, all had "lost" the house by 2005..

[ColbertWatcher]

9. So, your kids friends, that's 3 plus how many more?

Seriously? Has there ever been an actual accounting of the numbers of failed loans? Lost homes?

This story sickens me because once all the failures are taken into account it does become a "catastrophic loss" meaning there should be an "incentive to investigate criminal conduct" (like the prosecutor in the article said).

But there won't be.

Because it's only poor people or middle class people, like the ones in New Orleans, as long as no rich person was harmed in the making of this disaster no outrage need be wasted.

So the news revealed in this article will be ignored just like the original 2004 warning was ignored, just like all the warnings about how this GOP administration has failed this country are dismissed and ridiculed.

January can't come quick enough.

[ColbertWatcher]

10. Morning kick! n/t