Thread: FBI warned about mortgage fraud problem in 2004

Holder: FBI warned about mortgage fraud problem in 2004

Updated 9m ago

WASHINGTON — The commission investigating the causes of the financial crisis is looking into the assertion that the FBI issued a warned of a looming outbreak of mortgage fraud in 2004..
The Financial Crisis Inquiry Commission quizzed Attorney General Eric Holder sabout whether the FBI acted on the warning.

Chairman Phil Angelides also is raising the possibility that the FBI's focus on national security concerns after the Sept. 11 attacks might have weakened the bureau's ability to get a handle on the kind of risky banking practices that led to the worst financial crisis since the Depression.

Holder says he'll look into what steps were taken as a result of the FBI's 2004 warning. Holder also says his department is constantly "reviewing what we can do better."

Holder told a bipartisan panel exploring the roots of the U.S. financial crisis that the Justice Department is using "every tool at its disposal" to fight the financial crimes that contributed to the meltdown and could cause another.

Holder said fighting financial crime will foster confidence in the system. He is appearing before the Financial Crisis Inquiry Commission in its second day of hearings.

LOOKING FOR FRAUD: SEC wants inside information
VIDEO: Day 1: Bank executives testify
MORE: About the Commission

Securities and Exchange Commission Chairman Mary Schapiro is expected to tell the panel her agency has been reviewing its operations in light of crimes exposed by the crisis, according to prepared remarks.

The panel also is hearing from Federal Deposit Insurance Corp. Chairman Sheila Bair and other regulators and law enforcement officials.

Bair said the financial crisis exposed fundamental weaknesses in the regulatory system. The Obama administration has proposed a sweeping overhaul The House passed a bill last year, and the Senate is working on a separate compromise.

Holder highlighted the work of a new interagency Financial Fraud Enforcement Task Force created by President Barack Obama to coordinate efforts between the Justice Department and other agencies.

The regulators and officials are expecting to discuss investigations into crimes that became known during the crisis, including mortgage fraud and large financial crimes like the landmark pyramid scheme perpetrated by Bernard Madoff. The SEC came under fire for failing to detect frauds by Madoff and others in the years before the crisis.

On Wednesday, the commission heard from executives from four of Wall Street's largest banks.

In that session, top Wall Street executives admitted that they made mistakes before a housing boom went bust, leading to a $700 billion taxpayer bailout and the worst recession since the 1930s.

"We did eat our own cooking, and we choked on it," Morgan Stanley (MS) Chairman John Mack told the Financial Crisis Inquiry Commission, holding its first public hearing since being created by Congress last year to investigate the causes of the meltdown on Wall Street.

"We all rationalized" looser credit standards throughout the financial system, Goldman Sachs (GS) CEO Lloyd Blankfein said. "We talked ourselves into a place of complacency."

"Over the course of this crisis, we as an industry caused a lot of damage," said Bank of America (BAC) CEO Brian Moynihan. "Never has it been clearer how mistakes made by financial companies can affect Main Street."

Jamie Dimon, chief executive of JPMorgan Chase (JPM), said most of his employees took "significant cuts in compensation" in 2008. He said his company would continue to pay people in a "responsible and disciplined manner" to attract and retain top talent.

Still, Dimon said, "We did make mistakes and there were things we could have done better."

The commission's chairman, former California treasurer Phil Angelides, criticized Goldman for packaging risky mortgages into securities, selling them to investors — then using its own money to short (or bet against) the same securities. "It sounds a little to me like selling a car with faulty brakes and then buying insurance" on the driver, Angelides said.

Blankfein defended the practice, saying Goldman Sachs was simply making a market in investments its clients wanted. "Baloney," said James Cox, a Duke University law professor in an interview, picking up on Angelides' used car metaphor. "They were telling people at the same time that this car handles well at high speeds."

The financiers said they welcomed stronger regulation. Blankfein, for instance, said he supported moves to bring over-the-counter derivative investments onto clearinghouses or public exchanges, where they can be seen by investors and regulators; they are now traded privately. Derivative investments helped sink insurer American International Group.

But the financial industry has spent millions lobbying to weaken legislation designed to protect consumers from financial abuses and to shed more light on the derivatives market. "If the leaders of Wall Street believe regulation is needed," said John Taylor, president of the National Community Reinvestment Coalition, "they should tell their lobbyists, because they are fighting every serious regulatory change and improvement being considered by Congress."

The commission, comprising six Democrats and four Republicans, must report by Dec. 15.

Contributing: The Associated Press; USA TODAY reporter Paul Wiseman

http://www.usatoday.com/money/companies ... sion_N.htm

All the feds are a dollar short and a day late. Steve Sailer has been writing about this for over a year.

Originally Posted by JohnPershing

All the feds are a dollar short and a day late. Steve Sailer has been writing about this for over a year.

The Feds (The F.B.I.) have been writing about it since 2004.

The question is:

Why didn't the president and the congress do anything with the info that was available to them?

Holder says he'll look into what steps were taken as a result of the FBI's 2004 warning.


Sure he will There is not a word which comes out of this man's mouth which can be believed....on any subject.


Holder also says his department is constantly "reviewing what we can do better."


Sorry, but the only thing I believe his department ever seeks to improve is to how better serve the interests of those whom he is protecting, aiding, and abetting.