California may join probe of Wall Street’s role in mortgage meltdown

Discussion in 'Media' started by hvactec, Jul 21, 2011.

  1. hvactec
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    hvactec VIP Member

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    New York’s and Delaware’s investigation could lead to criminal charges against financial executives. ‘California was disproportionately harmed by the mortgage crisis, and our homeowners badly need relief,’ the state’s attorney general says.

    Reporting from New York and Los Angeles — California is considering joining New York and Delaware in a wide-ranging investigation into Wall Street’s role in the mortgage meltdown that could lead to criminal charges against financial executives.

    California Atty. Gen. Kamala Harris met with New York Atty. Gen. Eric Schneiderman on Thursday in San Francisco to discuss cooperating on the investigation, which is already one of the broadest to probe how banks encouraged the financial crisis through the creation of risky financial instruments backed by mortgages.

    New York and Delaware have more than a dozen attorneys working full time on the effort and have subpoenaed or requested information from 13 financial firms, including Goldman Sachs and JPMorgan Chase & Co., according to people familiar with the investigation. The people spoke on condition of anonymity because of the sensitivity of the investigation

    Schneiderman declined to comment on any specific investigation but told The Times, “We’re taking a hard look because the American people are entitled to a full investigation that uncovers all the facts and holds those responsible to account.”

    Delaware Atty. Gen. Beau Biden declined to comment on the investigation.

    California would represent a vital addition to the investigation because it was the location of a vast number of the mortgages and foreclosures that fed into the crisis. Since home prices peaked in 2007, California homeowners have lost $1.9 trillion in home equity, according to an estimate by the research firm Moody’s Economy.com.

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  2. Leweman
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    Leweman Gold Member

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    Will any politicians be held accountable? Of course not.
     
  3. Rev.Hellh0und
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    Rev.Hellh0und Member

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    Maybe they should investigate who pushed to have these NINJA loans approved.... That's a probing I dont think they would like.
     
  4. martybegan
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    martybegan Gold Member

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    The only angle they could be going for was fraud, but I find it difficult to beleive they could make any charges stick. EVERYONE was turning a blind eye to the entire meltdown, because EVERYONE was benefiting.

    Wall street made money on the securities
    Insurance companies made money on the default swap fees
    The federal government made money on increases in income and corportate taxes
    The states/localites made money on increased income tax revenue and increased property tax revenue from higher property values
    People got homes they couldn't afford prior to the standards being lowered for mortgages
    Pensions/401k's made money on increased real estate stock, as well as payouts from the MBS's.
    The real estate market made money on the property swaps and increased property values.

    I don't think any fraud was involved, it wasn't needed. What was needed was ignorance that the system was based on a lie, a lie EVERYONE beleived in, that property values could never go down, and those sub prime mortgages would be just a good as the regular ones.
     

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