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I'm starting this thread to discuss errors and mismanagement that lead to our current financial crisis. During the height of the Housing Crisis, 1 in 3 foreclosed homes were a result of bank error or now illegal practices.
The banks and many of the lenders were also bailed out after the crisis and given millions of dollars to keep their businesses afloat. The following year, many of the top executives bonused themselves...
"Nine of the financial firms that were among the largest recipients of federal bailout money paid about 5,000 of their traders and bankers bonuses of more than $1 million apiece for 2008, according to a report released Thursday by Andrew M. Cuomo, the New York attorney general."
The statistics were pretty astounding to me. I didn't think that the corruption was that widespread. I knew about the bonuses, but not about the bank errors being the reason for people being evicted out of their homes. There have been efforts by some groups to get people back into their homes, but most Americans were simply out of luck.
How many of the foreclosures affected people who were current on their house payment?
I believe it is nearly 33%. If I'm not mistaken, two thirds were not current on their payments and thats why they defaulted. However, one third had not defaulted on their loans, there were simply errors or illegal practices by the bank.
"Close to 1.2 million borrowers, or about 30 percent of the more than 3.9 million households whose properties were foreclosed on by 11 leading financial institutions in 2009 and 2010, had to battle potentially wrongful efforts to seize their homes despite not having defaulted on their loans, being protected under a host of federal laws, or having been in good standing under bank-approved plans to either restructure their mortgages or temporarily delay required payments.
More than 244,000 of those borrowers eventually lost their homes, government data show.
The estimates, disclosed Tuesday, far exceed projections made over the past few years after document abuses known as robosigning gained widespread attention in late 2010."
Yes. And how many of the bankers went to jail ... for causing billions of dollars of losses suffered by so many of us?
I have no sympathy for bankers and am outraged at all that they did, at the same time I recognize we live in a democracy with a system of laws.
You can only send someone to prison if he or she is convicted of a crime. You just can't round up greedy people or people who make errors to teach them a lesson.
In order to prosecute someone successfully, there must be evidence beyond a reasonable doubt that a crime was committed. Making mistakes or being careless or being greedy in and of itself may not involve any actionable criminal activity.
It is far better to use the civil court system to pursue bankers. The standard of proof is lower and the threshold for actionable behavior is lower. You can't be prosecuted for carelessness or making mistakes, but one can be made to pay for it financially in a successful plaintiff's action in civil court.
Not exactly. Read the entire report. Very few were not behind in their payments.
Nearly a third of foreclosed borrowers, or 1.2 million, in 2009 and 2010 were fighting off foreclosure even though they never defaulted on their loans or were otherwise in good standing under bank-approved plans.
They were behind in the first place. That was my comment.
Some were behind but not outside of the terms of the agreement set forth by the bank. It was the banks error of processing their payment as to why they were foreclosed upon. Thus making the issue one of the banks.
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