Cheat Sheet: What’s Happened to the Big Players in the Financial Crisis

[Donnachaidh]

http://www.propublica.org/article/cheat-sheet-whats-happened-to-the-big-players-in-the-financial-crisis



Widespread demonstrations in support of Occupy Wall Street have put the financial crisis back into the national spotlight lately.

So here’s a quick refresher on what’s happened to some of the main players, whose behavior, whether merely reckless or downright deliberate, helped cause or worsen the meltdown. This list isn’t exhaustive -- feel welcome to add to it.
Mortgage originators

Mortgage lenders contributed to the financial crisis by issuing or underwriting loans to people who would have a difficult time paying them back <1>, inflating a housing bubble that was bound to pop. Lax regulation <2> allowed banks to stretch their mortgage lending standards and use aggressive tactics to rope borrowers into complex mortgages that were more expensive than they first appeared. Evidence has also surfaced that lenders were filing fraudulent documents to push some of these mortgages through <3>, and, in some cases, had been doing so as early as the 1990s. A 2005 Los Angeles Times investigation of Ameriquest <4> – then the nation’s largest subprime lender – found that “they forged documents, hyped customers' creditworthiness and ‘juiced’ mortgages with hidden rates and fees.” This behavior was reportedly typical for the subprime mortgage industry. A similar culture existed at Washington Mutual <5>, which went under in 2008 in the biggest bank collapse <6> in U.S. history.

More at the link --

[Autumn]

1. Recommended and saving this

[canoeist52]

2. Wow, all the criminals and their crimes in one place.

Great tool site for the prosecution.

[LonePirate]

3. What prosecution? Obama seems to think they did nothing illegal.

[snot]

4. Good; but omits what aggravates me most of all:

The EFFECT of the $85 billion bailout of AIG was to enable it to pay 100 cents on the dollar on all the illegal or at least unethical credit derivatives-based bets that Goldman et al. made against the securities they were selling to their clients.

If AIG had just been liquidated (as we liquidated bad S&L's in the 80's), its creditors (Goldman et al.) would have had to simply divvy up whatever AIG had. Instead, the rest of us were looted in order to make Goldman whole.

[sarcasmo]

6. The crazy thing is that it's going to happen all over again with Meryl Lynch.

[slipslidingaway]

5. knr nt