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There were endless stories pouring out after 2008 of laws broken with wild disregard, you can't make that much money and then not just burst the bubble but send

by ck2 4y ago

There were endless stories pouring out after 2008 of laws broken with wild disregard, you can't make that much money and then not just burst the bubble but send a tidal wave of destruction across the world without a serious crime spree. Of course SBF should be prosecuted, but the fact no CEO was even charged after 2008 means there was something far more corrupt at play, it was politics, they feared the repercussions of inhibiting the profit makers, pension funds and retirement plans would have collapse. SBF is "easy" because no repercussions.

wilg 4y ago
> the fact no CEO was even charged after 2008 means there was something far more corrupt at play It doesn't mean that, but it might make you suspect that!
Khaine 4y ago
Weren't most of the law breaking done by people applying for loans and lying about their income? Losses in the market for private label residential mortgage backed securities (RMBS) were at the epicenter of the financial crisis from 2007-2009. Existing research has shown that a substantial portion of the poor performance of the loans securitized in this market was caused by fraudulent origination practices and that these practices were misrepresented to investors who purchased securities based on these loans. However, to date no paper has estimated the effects of mortgage fraud on losses from foreclosure in this market. This paper fills this gap by 1) Accounting for total losses from foreclosure due to no/low documentation loans which were known colloquially within the industry as Liar's Loans, and 2) Estimating what portion of these losses can be considered excess from the perspective of the investor. Losses are considered excess in the sense that they were higher than the expected losses for investors, had the loan quality information disclosed to them been accurate, instead of fraudulent. I find that Liar's Loans account for roughly 70% of total losses, and 36% of losses in Liar's Loans can be considered excess. Projected to the level of the entire market, this implies that $345 billion of the $500 billion in losses from foreclosure are accounted for by Liar's Loans. Roughly $125 billion, or 25% of total market losses, can be considered excess losses caused by fraud in Liar's Loans. From https://peri.umass.edu/publication/item/1008-liar-s-loans-mortgage-fraud-and-the-great-recession-working-paper https://peri.umass.edu/publication/item/1008-liar-s-loans-mo...

by ck2 4y ago

wilg 4y ago

> the fact no CEO was even charged after 2008 means there was something far more corrupt at play It doesn't mean that, but it might make you suspect that!

Khaine 4y ago

Weren't most of the law breaking done by people applying for loans and lying about their income? Losses in the market for private label residential mortgage backed securities (RMBS) were at the epicenter of the financial crisis from 2007-2009. Existing research has shown that a substantial portion of the poor performance of the loans securitized in this market was caused by fraudulent origination practices and that these practices were misrepresented to investors who purchased securities based on these loans. However, to date no paper has estimated the effects of mortgage fraud on losses from foreclosure in this market. This paper fills this gap by 1) Accounting for total losses from foreclosure due to no/low documentation loans which were known colloquially within the industry as Liar's Loans, and 2) Estimating what portion of these losses can be considered excess from the perspective of the investor. Losses are considered excess in the sense that they were higher than the expected losses for investors, had the loan quality information disclosed to them been accurate, instead of fraudulent. I find that Liar's Loans account for roughly 70% of total losses, and 36% of losses in Liar's Loans can be considered excess. Projected to the level of the entire market, this implies that $345 billion of the $500 billion in losses from foreclosure are accounted for by Liar's Loans. Roughly $125 billion, or 25% of total market losses, can be considered excess losses caused by fraud in Liar's Loans. From https://peri.umass.edu/publication/item/1008-liar-s-loans-mortgage-fraud-and-the-great-recession-working-paper https://peri.umass.edu/publication/item/1008-liar-s-loans-mo...