Thursday, June 19, 2008

Hundreds indicted in mortgage fraud probe

WASHINGTON - Federal authorities announced Thursday that more than 400 real estate industry players have been indicted since March — including dozens over the past two days — in nationwide crackdown on mortgage fraud that has contributed to the country’s housing crisis.
The FBI put the losses to homeowners and other borrowers who were victims in the schemes at over $1 billion.

Since March 1, 406 people have been arrested in the sting dubbed “Operation Malicious Mortgage” that saw 144 cases across the country. Sixty people were arrested on Wednesday alone, including in Chicago, Miami, Houston and a dozen other regions policed by the FBI. (link)

Comment: Fantastic! This calls for a beer! It is about time the authorities got serious about enforcing the law and putting some of these crooks in jail. While we may need some reform of existing laws, more than anything we need vigorous enforcement of the laws already on the books. The Justice Department is expected to ask Congress for more money so they can prosecute more mortgage fraud. The Justice Department should get all the money they need to bring these thieves to justice.

The article quoted above goes on to say that banks this year reported almost 53,000 cases of suspected mortgage fraud. The most common type of mortgage fraud was falsified income, followed by forged documents, and inflated appraisals. As a certified Loss Mitigation and Mortgage Default counselor, I routinely see this type of fraud. Another type of fraud I see, is that the closing documents show the buyer paid thousands of dollars at closing when they did not. The reason they do this is to show that the mortgage is for some lesser percentage of the sale price, when in fact the loan is 100% financing. The fraud is widespread. Mortgage companies were ripping off borrowers and their own investors, loan officers were ripping off the mortgage company they work for, and in collusion with the loan officers some borrowers were knowingly signing false mortgage documents and committing fraud.

In a separate action today, two former Bear Stearns mangers were arrested and charged with securities and wire fraud violations and taken away in handcuffs. I am delighted to see the big boys get charged with serious crimes as well as this arrest of the rank and file mortgage criminals. I hope they keep it up and arrest thousands more. I hope every clerk who ever falsified a document or forged a signature is losing sleep.

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Wednesday, June 18, 2008

Obama's Father's Day Speech

Barrack Obama’s Father's Day speech was a breath of fresh air. The state of the Black family is such an incredibly sensitive matter, only a Black person can raise the issue. People tiptoe around the issue when discussing urban policy or anti-poverty initiatives. There is an assumption when talking of Black crime rates, or Black poverty, or Black homeownership rates, or Black school dropout rates that the disparity simply must be due to discrimination. It is considered impolite to point out that Blacks commit more crime, and have poorer credit ratings, and voluntarily drop out of school. To point these things out is considered “blaming the victim” if not downright racist. Political correctness keeps us from talking honestly about the problem of Black poverty.

For most of my adult life I have worked with poor people, and for the last 15 years or so, I have worked as a housing counselor. As a housing counselor, part of what I do is work with low-income people seeking homeownership. I help clients clean up their credit and improve their money management skills, allowing them to become qualified to get a mortgage. I have counseled hundreds of clients. Most of them have been Black, single mothers.

Unfortunately, as I have discovered, having children out of wedlock is the norm in the Black community. More Black children are born to single mothers than to intact families. Black, single mothers do not seem to expect to be married or receive child support. I have counseled women who themselves became single mothers at age 16. While in my counseling program, I have had these same mothers come to me and tell me their own 16-year-old daughter is now pregnant.

It is my conclusion that the primary reason for Black poverty is the self-destructive behavior of Blacks; the single most destructive behavior, in my estimation, is having children out of wedlock. Young boys are less likely to get into trouble and young girls are less likely to get pregnant when there is a father in the home. Also, poverty is a function of income. A family consisting of a household of a mother earning $20,000 a year and a father earning $20,000 and with two children can get by OK; a family consisting of a single mother earning $20,000 with two children is poor.

The legacy of slavery and Jim Crow certainly contributed to the state of the Black family, but the modern culprit is the legacy of the liberal welfare state. Welfare made fathers irrelevant. When mothers could get food stamps, public housing, and Aid to Families with Dependent Children if there was no father in the home, we destroyed the Black family and enslaved Blacks to institutional poverty. In The War on Poverty, poverty won. Welfare changed Black society for the worse.

Welfare reform was certainly an important development and a step in the direction of correcting the mistakes of the past. Unfortunately, it did not go far enough. Since the initial reform there has been backsliding and retreat on this front. Welfare reform alone, however, will not change the Black culture, nor will it change it rapidly. It will take time and a willingness to face the problem. Cultural norms and the way people think do not change overnight.

To make meaningful progress in ending Black poverty, there must be a change in the values of the Black community. I don’t pretend to know how to do this, but a place to start is for Black leaders to admit there is a serious problem within the culture and values of Black society. Blaming society for all of the problems of the Black community relieves the individual of personal responsibility. Black ministers need to challenge their parishioners to end self-destructive behavior. Black men should be shamed for abandoning their children. Single motherhood should not be celebrated. An out of wedlock birth needs to be viewed as a tragedy.

If elected President, Obama may very well end up like other Democrats, advancing the welfare state and keeping Blacks enslaved in poverty and dependency. But from what I read of his Father’s Day speech, he is saying exactly what needs to be said. One speech will not make much difference, but maybe the tide is turning. With a Black leader of Obama’s stature, maybe Black society can reform itself, and Blacks can change these aspects of their culture and join the mainstream of society.

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Monday, June 16, 2008

Democrats Broken Promises on Gas Prices

Nancy, I thought you promised to bring down gas prices.

In 2006, in the lead up to the Congressional elections, Nancy Pelosi promised "a commonsense plan to bring down skyrocketing gas prices." At the time gas was $2.23 per gallon; now it is $4.00.

Many people are looking to find a culprit and are looking for a conspiracy. The primary cause of higher gas prices is due to an increased demand from developing countries, primarily China and India. However, if one wants someone to blame, the Democrats are the prime candidates. Democrats have blocked new American exploration, drilling and refineries for the last twenty years.

Nancy Pelosi is not such an idiot that she does not understand the cause of higher gas prices. Since, however, she promised "a commonsense plan to bring down skyrocketing gas prices," she should be held accountable. Nancy did you not promise to bring down gas prices?

This video was copied from youtube and was a production of rocketsfan34.

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Sunday, June 15, 2008

Obama on Absentee Fathers

Obama celebrated Fathers Day today by speaking to a Black Church in Chicago. Various news sources including The New York Times, USA Today and The Associated Press gave accounts of the speech. Here are snippets of the speech:

“Too many fathers are M.I.A, too many fathers are AWOL, missing from too
many lives and too many homes,”
“They have abandoned their responsibilities,
acting like boys instead of men. And the foundations of our families are weaker
because of it.”
“More than half of all black children live in single-parent
“I know how hard it is to get kids to eat properly, but I
also know that folks are letting our children drink eight sodas a day, which
some parents do, or, you know, eat a bag of potato chips for lunch. Buy a little
desk or put that child at the kitchen table. Watch them do their
“We need families to raise our children. We need fathers to
realize that responsibility doesn’t just end at conception. That doesn’t just
make you a father. What makes you a man is not the ability to have a child. Any
fool can have a child. That doesn’t make you a father. It’s the courage to raise
a child that makes you a father.”

This is a breath of fresh air. The state of the black family is such a sensitive matter that only a Black person can raise the issue.

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