The New York Times ran an editorial on Sunday, Jan. 15 on mortgage fraud. Now correct me if I am wrong, but I thought newspapers were supposed to print the news. There is nothing new about this piece, which once again points out that some banks are to blame for the current crisis. It reads, in part, “Big banks created demand and provided credit for dubious mortgage loans, which they bundled into securities and sold to investors. If not for reckless lending and heedless securitizing, there would have been no mortgage bubble and no mortgage bust….”
This is simply a reiteration of what we have seen before which is just aimed at getting readers angry once again at banks. But we knew this information about banks and brokers already! Some brokers were bad guys; some lenders made millions and some banks got bailed out of a mess they created through their greed.
What would be news is an article about the extent that consumers were involved in this tragedy. How about an article on the guy who got his 80-year old mother-in-law to sign for a loan and then skimmed all of the equity out of her house? Or the guy who obtained a refinance for his property when he hadn’t been employed for 10 months, but stated on his application that he made $7,000 a month? I could go on and on but all of you have your own stories to tell.
The bottom line is that consumers were involved just as much as lenders. They lied about their income, their assets and anything else that was necessary to get them the money or the house they thought they deserved. They signed the applications that said the information was accurate and ultimately they financed their lifestyles with false equity. In my opinion the real news is a headline that reads “Consumer convicted of stealing from the bank by lying on his loan application.”
