WHEN DOCUMENTED & PREDICTABLE CRIME ISN’T TREATED AS A CRIME
Home Mortgage Fraud: Regarding subprime mortgage fraud some researchers have recommended that to better understand how and why the ethical and unethical, legal and illegal White Collar Crime (WCC) loan practices became so widespread in the U.S. system was by way of distinctly mapping the diffusion of subprime lending. Most importantly, there was a combination of views to be considered within the context of diffusion’s original definition and how others sought to or had actually expanded the definition. With that in mind the innovations, communication channels, the social systems and time frame were the main components identified within this particular diffusion process. With the use of that working definition those components were combined with the criminology theories and other corrective measures of various regulatory agencies which all helped to explain how an otherwise legitimate and ethical business practice became a primary cause and concern for financial crisis management.
The components that made up the theory of diffusion and later the diffusion model were identified with accompanying market examples such as: innovation (subprime mortgage fraud, subprime or predatory lending); command channels (industry contacts, occupational & social organization, either formal or informal); the social system (mortgage industry); and the time frame of the innovation’s diffusion. Here diffusion was defined “as the process by which subprime lending and subprime fraud have been communicated through certain channels over time among members of the mortgage industry.”
In order to gather more relevant data about mortgage fraud the researcher used eight research questions. The first two addressed mortgage fraud and subprime lending overtime. While the other six questions examined the use and misuse of that practice from the perspective of the mortgage specialists. Here was further explained that, “The questions were also developed to investigate the opportunity structure of subprime lending, and how the differential associations and routines of mortgage practitioners (e.g., various levels of guardianship) may have facilitated the spread and growth of the white collar crime associated with it.”
The mostly qualitative evaluations that resulted from those questions combined with the descriptive data about the rates of growth and the depths of the subprime lending fraud were important steps for this criminology research. That was vital because the researcher stated, “Diffusion of innovations theory has rarely been used in criminological research. In fact, only a handful of studies following the diffusion paradigm were located through an extensive literature search….There was no established diffusion research tradition within criminology to fully emulate for the current investigation. However, of the multidisciplinary diffusion studies that have been reviewed, pre-survey interviews, case studies, surveys, and interviews tended to pre-date any quantitative evaluations in the majority of these investigation”, which was also important to help update fraud detection applications.
That all moved one into the direction of an informed understanding of how and why mortgage fraud existed. However, noteworthy was that traditional criminological theory was limited when it came to the components of the crime of subprime mortgage fraud and was just as limited when it came to providing an explanation about the inner workings of WCC. One operating definition of WCC was provided this way when the author cited, “the United States Department of Justice defined white-collar crime as: Nonviolent crime for financial gain committed by means of deception by persons whose occupational status is entrepreneurial, professional or semi-professional and utilizing their special occupational skills and opportunities; also, nonviolent crime for financial gain utilizing deception and committed by anyone having special technical and professional knowledge of business and government, irrespective of the person’s occupation,” although a lot of other forms of harm were felt.
Also to better understand the WCC of mortgage fraud meant that researchers had to collect and evaluate more than enough evidence in order to help many uninformed people to reach a well-informed understanding about how and why that unethical and illegal practice of housing related fraud became so widespread in the U.S. by way of the diffusion of subprime lending. Part of that understanding was revealed when the researcher explained that, “there was a ‘breakdown in exchange relationship’ standards in the form of financial crimes have assuredly contributed to this unprecedented display of economic self-destruction, and contributed to the economic crisis which continues to reverberate around the world,” even to this very day as will be shown.
That definitely applied to this specific fraud study. Still to compensate for the theoretical and practical limitations of traditional criminal theory, the primary factors or components that were mentioned much earlier at the opening were used to both investigate and apply a non-criminological perspective. Such a needed compensation pointed directly back to the importance of diffusion theory, as well as the diffusion model which will also come to be essential for the understanding of the complex and multidimensional processes used prior to the actual outcome of fraud. For a variety of reasons, which will be explained further, the diffusion research paradigm provided an empirical study and framework for understanding the antisocial behaviors that contributed to subprime and mortgage fraud, and just as importantly the research study helped one learn or provided a needed reference about how to apply diffusion to this particular aspect of white collar crime and its ever evolving innovations.
But we continue please note that not everyone agrees with this direction of the diffusion theory or more specifically the causation of WCC.
‘The Economist’ issues a myopic defense of the white-collar criminal
Despite that position, the diffusion theory and its causation model was tied to the aforementioned concept of innovation. So WCC itself can be considered to be an illegal innovation or quite literally as a copy of some legitimate innovation in business. While being in need of both regular or non-suspicious routines and opportunities, first subprime mortgage specialists reportedly used the legitimate means and ways of the housing market unethically and illegally. Also reported was that an individual or more people entered into that legitimate market with a predatory plan in hand. Most assuredly that plan had already been secretly used by other people and companies who were also engaged in both legal and illegal practices. Using that application of the diffusion theory and by gathering more information from both legitimate and illegitimate mortgage specialists, how the adoption and reinvention occurred becomes clearer over time within a targeted industry.
The researcher also found that: Second, the discussion channels (i.e., innovations, social system, etc.) of diffusion theory “represent why, how” (and now identified components, characteristics or traits) combined with the “five-stage innovation-decision process model” which “taps into the ways in which individuals become aware of new ideas, characteristics of ideas and information ‘receivers,’ and the factors influencing whether or not an innovation is adopted or reinvented.” In other words, the language used to explain how and why the players had done what was done made the process leading into the fraudulent practice much clearer and far more open to being accurately evaluated as to cause and other important analysis needs such as content, structure, social system, and time; as the quotes and paraphrasing noted.
Third, access, the fake appearance of normal business (and distance from the victims) made up most of the essential properties of this specific WCC. Also how the decision-making units (people and companies involved performed) and also once the makeup of the studied innovation was known, virtually all contributions to the adaption, implementation and reinvention of a legal practice into an illegal one was readily identifiable. In short, that acquired knowledge demonstrated the process or conditions which entered into a person’s normal business day and then contributed to that person’s reasons for acting on or rejecting a potential or actual WCC opportunity. In laymen terms, many questions about how and why were readily answered when both the concept of the diffusion theory and when each step of the diffusion model were properly used.
Fourth, the diffusion perspective merely refined similar models that had been used successfully to assess WCC. The diffusion model was literally tailored to independent and dependent variables that focused on and gathered evidence about the inner workings of subprime mortgage fraud. More specifically, “With both individual and aggregate models fully refined under the diffusion perspective, the spread of both occupational and corporate crime can be interpreted. This may prove quite useful in future investigations into the corporate malfeasance associated with subprime mortgage fraud.”
Many experts believed that no single theory or model could account for all the factors associated with WCC. However, a greater variety of crime & risk factors (i.e., opportunity, conditions) and criminality (i.e., decision making, communication channels) expanded the range of factors and was much more advanced than traditional criminological theories for the logical examination and interpretation of how subprime mortgage fraud worked from beginning to end. Now armed with that understanding other field related insights about mortgage fraud was ready to be gathered and carefully evaluated since it was learned that, “Diffusion theory provides an outline for examining and explaining how occupational crime can occur through the adoption or reinvention of financial or other material opportunities (e.g., via the innovation-decision process). Diffusion models can capture individual susceptibility to offend through characteristics of adopters and decision-making units, while attending to structural and contextual factors that may encourage or inhibit offending.”
Along with a focus on the motivating factors behind WCC, a slightly different view of the crime was now presented. Here an analysis of three states identified some of the most problematic consequences and obstacles related to mortgage fraud cases. Among the problems found was that when banks consolidated quality assurance suffered and that a majority of mortgage fraud cases occurred at the application phase and often were not discovered until several years later. The study also found that no pattern was able to be isolated to demonstrate the conditions under which mortgage fraud most likely to occur (something which would probably be remedied within the diffusion process), although certain socioeconomic variables (such as the neighborhood risk factors that attracted crime) played a determinative role. Furthermore the scale of the problem was understated because brokers were not required to comply with the Suspicious Activity Report (SAR) which the FBI required the rest of the mortgage industry to comply with, as the study’s findings were here summed up and paraphrased.
More on SAR later but for now and also unfortunately law enforcement was not able or was unable to narrowly define mortgage fraud in the field. Used was an umbrella term for all sorts of transactions in real estate that was divided into property and profit fraud. The users of fraud-for-property claimed to help borrowers avoid red tape to obtain loans faster but that avoidance process was almost always a set-up for failure since those targeted was low-to moderate income families who usually were not able to keep up with the contractual loan repayment schedule. The reason why was obvious since it was stated that, “Fraud-for-profit schemes are performed purely based on greed alone, and usually involve the assistance of an industry insider. Most of the ultimate success of these “fraud-for-profit” schemes is dependent upon an inflated appraisal, which ultimately convinces the bank to provide funds for a property that is nowhere near the stated value.”
Definitely important to note was that flipping property after improvements was not a process of mortgage fraud. Deliberately lying, misstating, misrepresentation, or gaps of omission during lending were. Those same fraud specialists were usually tied to identity theft. Yet that theft was often used to complete mortgage fraud only. So identity theft, too, was a law enforcement problem which was poorly understood.
There were essentially three law enforcement problems to resolve at this level. One, law enforcement took a while to (while some still failed to) see mortgage fraud as an individual or unique issue. Two, the fraud was not usually discovered by a company anywhere from one to four years later and that made avoiding jail easier. Three, the media generally had a poor understanding of mortgage fraud and simplified complex matters which made law enforcement appear inept when in those instances incompetence was really more of media related issue than a law enforcement one. In all the study merely provided a brief look at some of the other risk factors, how law enforcement reacted to those factors, and what steps the industry had taken.
Detection efforts by the real estate industry had been taken to flag suspect or fraudulent behavior within a transaction. Also helpful was when it was noted that, “Other quantitative models” the diffusion model was in some aspects one though maybe not used in this instance “have been set up to help identify what characteristics of a specific lending institution might itself prove attractive to criminals as well. Regarding house price information, there is vast potential for uncovering the price effects of mortgage fraud, subsequent to the illegal activity taking place. Such analysis would require sales data both before and after the fraud event, and would entail data for the fraud property, the immediate neighborhood, and a random sample throughout the city.”
Despite all of that and more, the fraud risks and accompanying illegal transactions already mentioned have been reported to be down or to have at least levelled off. Some banking and mortgage experts were even bold enough, although as will be demonstrated later prematurely so, to call that the new normal. Accordingly the reportedly resolved risks were geographic, transactional poor data integrity, home equity risks, and a much improved analysis was such that the author recommended that “risk trends based on analysis of loan applications processed in 2014 by the Interthinx FraudGUARD® system”, be used for improved early detection of fraud.
Part of the reason for the cautious optimism here was that the top-10 most risky states had been analyzed and all but California was rated poorly. Four states had improved and the other six had mortgage fraud risks that were considered to be flat or in decline. Much of that positive impact was due to regulatory compliance and DoddFrank in particular, which made income fraud risk (inflated incomes) much more difficult to falsify since that portion of the mortgage process was tied in with tax returns and the IRS’s flagging systems. Still that author’s optimism was cancelled by the cautious optimism which was born later when Senator Warren extracted testimony which clearly demonstrated that the system or a similar system was probably not being used widely or often enough.
Although with the appearance of complex jargon like debt-to-income ratios, DoddFrank’s purpose was to stop the illegal practice of subprime mortgage fraud which had used illegal tools like inflated incomes to make the most risky loans appear far less risky than they actually were. The reporter stated that, “The full name of the bill is the Dodd-Frank Wall Street Reform and Consumer Protection Act, but it is better known and most often referred to as Dodd-Frank. In simple terms, Dodd-Frank is a law that places major regulations on the financial industry” (Dodd-Frank Act, 2016), which again many people might wonder if Dodd-Frank’s intended role was actually happening; especially after the regulatory related flaws in the FBI’s and DOJ’s role were reported on later.
As explained using the diffusion theory, the understanding of the inner workings of subprime mortgage fraud began at the pre-funding stage or initial application process, so too had improved quality controls aimed at prevention. The combination of automation and human forensic reviews helped. Auditors now revalidated loan data pre and post-closing so as to render the former one to four year gaps in fraud protection to an error of the past. However the report merely focused on the early signs of the “new normal” as advanced analytics were tasked with keeping up with ever increasing data streams (seemingly connected and unconnected variables) when prevention was focused on these main four fraud-risk areas: identity (remember how identity theft played a role?), income, valuation, and occupancy as was noted and paraphrased.
After all of those findings and along with similar studies with seemingly incriminating (at worse circumstantial) evidence, neither diffusion theory, fraud-risk prevention, and basically nor had any of the other prevention and intervention efforts focused on why there were still so few criminals who were undoubtedly responsible for the antisocial acts of financial fraud (stealing) during the subprime mortgage crisis since 2008 not subjected to a criminal trial or better yet convicted and placed in a jail.
Diffusion theory explained how key players and virtually entire business institutions overtime yielded to poorer values and made unethical decisions as well as known illegal ones. Most other people would be in jail for far less than what had been presented so far. So why were a lot of the identified mid-level key-players (as opposed to low-level-players) and the executives who knowingly helped steal money not on trial or in jail? As will be mentioned later, some were on trial but very few of the most responsible were even close to being indicted or going to jail for felonious theft and many levels of actual fraud.
The reasons why were thoroughly studied by researchers. Found was that there were at least nine factors that were largely used to explain the failure of the legal system to successfully prosecute subprime mortgage fraudsters. Nevertheless, the focus here was briefly on some of the legal tools available for the prosecuting attorney. Along with other methods, there were also state security laws and both criminal and civil misrepresentation statues that were sometimes used. However, prosecutors typically used two proven approaches which were explained as “Under the mail fraud and wire fraud statutes, anyone who uses the mail, telephones, television, radio, or the Internet to commit fraud can be held criminally liable and punished accordingly. The two statutes parallel each other, with the only significant difference being the means used to perpetrate the fraud. To convict an individual under both the mail and wire fraud statutes, the government must prove (1) intentional participation in a scheme to defraud, and (2) the use of the interstate mails or wires in furtherance of that scheme. In order to show a scheme to defraud, the government must prove that there was a material misrepresentation, or the omission or concealment of a material fact calculated to deceive another out of money or property.”
Proving intent was fairly straightforward since proving a person or persons used the above methods to trick someone else out of their money was one of the primary burdens of proof. As well, bank fraud as a tool was used to avoid security fraud’s five-year statute of limitations (proving yet again how the one to four year detection gap was significant). As well the long list of potential violations ought to be expected to help expedite the prosecutorial process, since a significant portion of the mortgage related violations were explained simply that “Charles Ferguson has made clear that numerous crimes have and are being committed by major financial institutions, including securities fraud, accounting fraud, honest services fraud, bribery, perjury, Sarbanes-Oxley violations, RICO offenses, antitrust violations, and federal aid disclosure regulations. What follows is a list of ‘reasons’ or factors (some might say ‘excuses’) for this failure to pursue criminal cases against key players leading up to and after the financial meltdown.”
Although the described mirrored some mafia charges, the nine factors which made prosecutions so difficult had to be legitimately considered. The first factor was that even intelligent juries were confused by complex finance jargon (i.e., risk indexes, ratios, etc.). Second judges, juries and people in general considered certain levels of deception to be acceptable business behavior. Third was a much more unexpected source or prosecutorial problems, the FBI. Here it was proceeded to be explained that, “The third factor relates to regulatory capture. As Professor William K. Black has repeatedly argued, a form of regulatory capture has taken place that has effectively defined ‘control fraud’ out of existence. He claims that regulators and prosecutors have defined out of existence accounting control fraud — the leading cause of financial losses and crises. The FBI describes itself as having entered into a ‘partnership’ with the Mortgage Bankers Association (MBA) to prosecute mortgage fraud. The MBA, however, is the trade association of the ‘perps’ and the FBI has accepted uncritically the MBA’s ‘definition’ of ‘mortgage fraud.’ That definition defines out of existence accounting control fraud.”
The fourth factor was that corporate lawyers were formidable. Budget constraints were the fifth factor. As a consequence of that fifth factor small-time operators and not the principal actors were targeted by the FBI and DOJ. Related to the fifth was the sixth factor where free market advocates and activists had nearly always claimed that financial markets self-regulated just fine. The most dubious was the seventh factor which was the difficulty of proving intentional fraud. The more accurate reason appeared to be that firms had superior political and legal protection not that the evidence had not substantially indicated guilt. On the other hand, maybe intent was extremely difficult to legally prove, “The eighth factor has to do with the difficulty of proving ‘intent’ (or mens rea) in a criminal case. Given what we know about Heath’s ‘vocabularies of adjustment’ and Bazerman and Tenbrunsel’s five factors, the intent to defraud becomes fairly fuzzy: the defendant can say (and the jury can believe) that ‘it was just business’ rather than an act with the intent to defraud,” although Tenbrunsel’s five factors were not identified in the author’s research one might assume the factors demonstrated how language comprehension or incomprehension supported or derailed justice.
The ninth factor explained that a firm’s disproportionate legal protection was directly due to political contributions. Worded differently, the consequence of those contributions meant that only five percent of finance regulatory bills passed between 2000 and 2006. Beyond that many more reasons were provided was to why prosecutions were difficult then and why there seemed to be few credible prosecutorial fixes even now. Accordingly, some of the more recent subprime mortgage fraud testimonies entered in 2016 went viral on social media since that investigative evidence was popularly expressed this way:
“You should resign. You should give back the money that you took while this scam was going on, and you should be criminally investigated.” That quote was from Senator Elizabeth Warren and was directed at the man who was also the Chairman of Wells Fargo and who was compelled to appear at the Senate Banking, Housing and Urban Affairs Committee to answer for his role in a current mortgage subprime loan scam that by most accounts ought not to have even happened and definitely not be undetected for more than a few years today. In an extreme twist (innovation) on single individual fake identity scams it was also reported that “the disclosure that Wells Fargo bankers opened as many as 2 million fake accounts in the names of existing customers and others, without their knowledge and permission, and stonewalled their inquiries and complaints. The scam went on from at least 2011 through 2015, though Stumpf revealed that the bank is now reexamining accounts from as early as 2009. On Sept. 8, it announced an agreement to pay $185 million in fines and penalties to two federal regulators and the Los Angeles City Attorney’s office.”
Based on the reporting above, Senator’s Warren’s quote, the content of the entire article, and this even more current YouTube video, combined with all of the directly related problems discussed throughout the cited studies made a convincing case that jail for those who were part of this particular scam ought to be one of the most prominent aspects of just about any subprime mortgage fraud investigation. Also the fact that the scam was not interrupted in 2011 indicated that aforementioned risk assessment efforts cited throughout this student’s study had not worked or were for some reason not applied to the fraud prevention processes that preceded the scam. The speculation about that prevention gap was not reported on so the extent of that prevention’s existence or use was not known (i.e. use of the Interthinx FraudGUARD® system that was mentioned already in this secondary research).
What was known was that the reported fine was far less than the bank’s billions in profits (and likely far less than the actual amount stolen over the four years). Also known was that the bank never disclosed to the SEC (as required) that its activities were being investigated. Related to what was known but in this particular instance also unknown: had the FBI detected, flagged or reported on the bank’s activity to the DOJ in any way between 2011 and 2014? If so in what way? If not why not? No details were provided about the absence or presence of the latter in the news article so about that questioned activity there was a complete absence of facts. However that absence too was also inside of any otherwise rather informed speculation based on both agencies well documented past behavioral fraud detection and prevention patterns. As for now, though, supporting evidence about that and other similar investigative speculations will be cited much sooner than later.
Still what was readily available and known was that not a single executive had been fired but that thousands of $12 an hour workers had been terminated, according to the CEO. That combined knowledge all probably contributed to Senator Warren’s anger and passionate urging that some of those same unfired executives face jail time: “Wall Street executives … almost never hold themselves accountable. Not now, and not in 2008, when they crushed the worldwide economy. The only way that Wall Street will change is if executives face jail time when they preside over massive frauds. … Until then, it will be business as usual, and at giant banks like Wells Fargo, that seems to mean cheating as many customers, investors and employees as they possibly can.”
Senator Warren might also object to the fuzziness in a seemingly unrelated banking industry article about some of the current attitudes towards the non-QM market. More to the point it was stated, “More than two years after federal regulators published a final definition of what constitutes a Qualified Mortgage (QM), lenders have shown very little appetite for anything that falls outside the QM standard.”
Without going into greater detail, the author then proceeded to give reasons why that “appetite” for following that regulatory QM standard ought to be reevaluated, apparently for legal loopholes (or was that an innovated definition?) to find a non-QM standard and thus acquire profits from a “untapped” market that was currently being federally protected from future subprime mortgage fraud? The latter was pure but recently informed speculation, not fact. What was more factual, though, was that much of the author’s article seemed to use much of the pre-subprime mortgage fraud language intentionally “jumbo mortgages” (that currently violate the terms of federally regulated QM rules unless QM’s protectionists definition was changed). Also “currently risky borrowers” were “being squeezed out of the market” and in other ways euphemistically presented pre-subprime mortgage fraud language that (appeared identical to the already covered “fraud-for-property” arguments) also undoubtedly called for a relaxation of certain federally regulated risk protections; namely federally regulated QM rules, along with other fragmented quotes and paraphrasing that described the similarities between the past and present predatory language and phrases that were being currently used.
On the other hand Senator Warren might like this next effort. In some ways similar to the adjustments made in diffusion theory there was an experimental fraud investigation class that may one day prove to be both a great fraud prevention and intervention tool. The graduates of the class would one day soon help victims who could not pay for an investigation to pursue some of the currently unprosecuted mortgage fraudsters. The social justice oriented student’s was noted as, “In addition to learning about forensic accounting and the investigative processes used by forensic accountants, the experiential/service learning aspects of the course provide an opportunity for students to enhance their communication and critical-thinking skills, to benefit from the experience and guidance of their CFE mentors, to learn to confront uncertainty and solve problems with imperfect information, and to contribute to the welfare of their communities by investigating cases of financial fraud that would otherwise never be investigated or prosecuted.”
Experiments aside, the FBI and DOJ ought to be expected to be reliable when preventing or intervening in subprime mortgage fraud detection and ultimately the gathering of accurate evidence to be used should prosecution ever become necessary. However one reporter found that, “DOJ officials informed us that shortly after the press conference concluded they became concerned with the accuracy of the statistics” and that “we also found that the FBI did not rank mortgage fraud among its highest ranked priority white collar crimes. We further found that, despite receiving significant additional funding from Congress to pursue mortgage fraud cases, the FBI in adding new staff did not always use these new positions to exclusively investigate mortgage fraud. Moreover, when we attempted to assess the effectiveness of the Department’s efforts in pursuing mortgage fraud cases, we found that DOJ could not provide readily verifiable data related to its criminal and civil enforcement efforts,” were all found in the government’s own report.
When looking back at Senator Warren’s encounter, the FBI’s own conflicts of interest, and how diffusion theory and models worked only as well as the accuracy of the data provided there remained credible reasons for concern about the reported regulatory inadequacies. “In reviewing the audit of mortgage fraud investigation and enforcement at the federal level, a recurring theme is apparent: One of the greatest hindrances to policing and enforcing mortgage fraud is unreliable data and data ill-suited to the job,” although there were reportedly fraud detection tools available to correct that.
Before summarizing those seven recommendations, the effectiveness of the above echoes the prerequisites for the effectiveness of the diffusion model; namely, risk analytics and other risk assessment tools used to gather or input data that would then be evaluated and adjusted to determine specific levels of fraud risk factors. Those were also reasons to note, “Why faulty FBI fraud data matters to the entire industry. Many lenders and government agencies, including the DOJ, continue to rely on FBI mortgage fraud data — and if that data is unreliable, it compromises efforts to address the widespread challenges of mortgage fraud. However, if the industry relies on fraud information that is based on a comprehensive, timely and established proprietary database, it greatly increases the validity of the data and its usefulness in adapting to changing fraud schemes. Because many mortgage lenders are currently being scrutinized based on data provided by inaccurate mortgage fraud numbers, let’s take a few minutes to consider the seven recommendations,” which would help the poor data verification problem.
As the author suggested, the seven recommendations were: (1) Publish federal updates online, ensure the FBI’s Distressed Homeowners Initiative and other related materials were publicly available; (2) Repeatedly revisit results of the multi-agency initiative Operation Stolen Dreams to determine if public reports were indeed accurate; (3) Implement the best practices and methodologies for collecting, soliciting and reviewing results before publicly reporting; (4) Revisit mortgage fraud undercover operations and tailor training to necessary investigative personnel; (5) Direct U.S. Attorneys’ to often assess limiting factors and non-monetary harms (again, diffusion theory would help) related to mortgage fraud plots; (6) capture additional data to identify the position of mortgage fraud players in a business; (7) Improve data collection processes to quickly identify and have prosecutors report fraud case numbers, although those recommendations merely paraphrased .
As a final note, provided were a few remarks about current litigation and relevant rulings that had proved to be past stumbling blocks for prosecutors and federal regulatory agencies. This particular ruling regarded what was needed to fulfill the legal burden to establish or prove intent. The lawsuits were aimed at investors and not the former targets of mortgage originators, $12 an hour employees, sponsors and depositors. Also the statute of limitations was expanded here and other factors increased the likely hood of the suit not being dropped due to insufficient evidence to prove intent. “Two significant rulings were made in other cases against trustees. First, an ‘extender provision’ under federal law can extend the applicable statute of limitations for state law claims brought by government investors in some instances. Second, investors must state only enough facts at the pleading stage to raise a ‘plausible inference’ that the trustee had knowledge of breaches of representations and warranties by RMBS sponsors to state a breach of contract claim against an RMBS trustee relating to those breaches under New York law. These holdings increase the likelihood that similar claims against trustees will survive at the pleading stage,” and not be dropped at the outset of the investigation as a result of insufficient evidence or for some other legal reason.
Conclusion: WCC was complex, however diffusion theory partly demonstrated how to build a model that explained the legal and illegal behaviors that fueled the antisocial acts found in the practice of subprime mortgage fraud. Definitely both local and federal law enforcement agencies would benefit from the use of a relatively standard or generalizable theory and application for fraud detection and prevention. The gap between when the fraud was detected was a gap that was still not closed although researchers and journalists had reported on the known problems as well as the most promising or proven corrective measures. As Senator Warren made clear subprime mortgage fraud was not a crime of the past, subprime mortgage was still a current practice. Fortunately that practice was found to be one that could be prevented but was one which required that local law enforcement, the FBI and DOJ, along with the public in general admitted to their roles, became much better informed all while expeditiously and collectively worked to correct most of the well documented faults or problems related to subprime mortgage fraud.
Update: October 19, 2016
California Is Investigating Whether Wells Fargo Committed Criminal Identity Theft
Enlarge this image California Attorney General Kamala Harris has launched an investigation into allegations that Wells…
Update: October 13, 2016
“He belongs in prison. Resigning is just letting him get away with it.”
The Super Psycho Killer
“He’s resigning because the board, mostly made up of inside bankers, are forcing him to resign. Despite all the criticisms stumpf received, he still worked from the ground up. His resignation is more of a sign that bankers on Wall Street are essentially throwing a bone to progressives, while reminding bankers what not to do in front of a congressional committee.”
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Note: For notes email: firstname.lastname@example.org