There have been numberless highly successful prosecutions for predatory lending, even though there is no plausible evidence that predatory lending has ever happened in recent decades, nor has such evidence ever been presented in court, nor is it plausible that predatory lending could be profitable except for lenders who break the borrowers legs and arms in the event of default.I have personal and direct knowledge of numerous incidents of predatory borrowing, mortgage fraud, but there has not been a single successful prosecution for mortgage fraud, even though it looks very much as though predatory borrowing collapsed the economy and cost the taxpayer trillions.
However, MGIC has objected to paying out on its insurance of numerous defaulted loans, and has presented a highly amusing motion to the California Superior Court in San Francisco, which includes its motion to American Arbitration association, alleging that Countrywide Bank committed and/or tolerated massive mortgage fraud
Representative Claims in Dispute
MGIC Certificate No. 23755967
… purchase of a $600,000 home in San Jose, California. …
MGIC investigated the claim …. First, contrary to Countrywide’s insurance application, she was never an account executive at GNG Investments. There is no such enterprise operating in
Santa Clara or anywhere else in California. Nor did she earn $13,494 per month, as Countrywide represented. Instead, she earned $3,901.58 per month as a janitor for Santa Clara Valley Medical Center. … she never had a bank account at Wells Fargo, let alone one worth $45,000. Nor did she put a $30,000 down payment—or a down payment of any amount—on her
MGIC Certificate No. 25639575
… purchase of a $360,000 home in Chicago, Illinois. … Nor did she earn $6,833 per month, as Countrywide represented. She was a part-time housekeeper who earned $200 to $300 per week, or approximately $1,300 per month. … A few months after closing, she returned to her home in Poland because she was unable to find steady work in Chicago.
MGIC Certificate No. 23789635
… refinancing of her home in Ceres, California. … a $398,050 mortgage loan … She never worked as a sales executive for Bay Area Sales and Marketing. There is no such enterprise. Nor did she earn $8,700 per month, as Countrywide represented. Instead, she had been unemployed since 1989 …
MGIC Certificate No. 25616578
… Contrary to Countrywide’s insurance application, his home was not worth $395,500 as of August 28, 2007. His home had sold three times in the year prior to the effective date of Countrywide’s appraisal: on October 3, 2006 for $199,750; on February 6, 2007, for $127,500; and on March 23, 2007, five months before the represented appraisal, for $200,000.
And, of course, lots and lots more of the same. These are alleged to representative of defaults, not the worst of the worst, not egregious and outrageous examples, but par for the course
The example of an overvalued house is striking it that the prices are obvious inconsistent. It fell to 127,500, and then, 45 days later, supposedly rose to the curiously round number of $200,000, before supposedly reaching the astonishing height of $395,000
My personal observation (for which I plenty of evidence, but no evidence that I can show to others) was that housing prices peaked 2005 November, and crashed swiftly thereafter, and the sales at higher and higher prices were all fraudulent, with straw man buyers and cash passing back under the table. If a house sold for a hundred thousand more, it was because $200 000 went under the table. All the sales at rising prices that I could know the truth about were fraudulent, and yet most sales for the next couple of years were at higher and higher prices, indicating a market completely dominated by massive mortgage fraud.