Why is the FBI looking into Mortgage Companies?

[Swissy]

Originally posted by DirtyMartini
Aren't all mortgages less then 417k purchased by Fannie and Freddie?

No, Fannie and Freddie buy a large portion, but not all. Also, they have a requirement of having a specific portion of the loans they buy be from lower income homebuyers. Those are the loans I was refering to. Loans that a bank or mortgage lender would rarely make without the certainty of moving it out of their portfolio.

[Japher]

A lot of the fraud that they will find, or are looking for, will have occurred after the loan was made. IMO, it's not so much that individuals were swindled, though the were taken advantage of because we are stupid, but that the debt was traded in such away that was less than kosher. I.e. high risk loans were thrown in the middle of a stack with a bunch of solid loans on top; like throwing in a stack of $1s with a $100 on top and expecting everyone to see a stack on $100s.

[Dinner]

Wasn't mixing and matching different risk profiles part of the whole idea of mortgaged back securities? Make it kind of a diversified portfolio to get the best return while minimizing risk via the law of averages?

[Grandpa Troll]

Im thinking the answer to the question is because OPERATION B ETOR:POLY PERVERTS PUBLICY PRESENTED failed epicly


So that agent chose the next biggest location of funds in America.....Mortage Companies

[Theben]

Originally posted by Japher
A lot of the fraud that they will find, or are looking for, will have occurred after the loan was made. IMO, it's not so much that individuals were swindled...

Dunno, I was talking to a friend today and he told me about how an loan officer tried to talk him into a property about $200,000 more than he could afford, saying, "in 10 years it'll be worth 1 million!!" Since he isn't stupid, he asked, "What happens when the price goes down?" to which the officer replied, "That won't happen. Housing prices don't decline," which is a stretch from saying over time, housing prices tend to rise. Needless to say, he didn't use this guy, but if that's how the market is or was pitching sales I can see how a less educated person would fall for that.

[Paddy]

certainly would be a few more questions if the FBI was not involved

I just curious how it was allowed to go on for so so long...