A group of homeowners who responded to my blog have begun a class action suit against Aurora. I haven’t joined it, because I’m assured by people high up in the institution that my paperwork is on the way. But I am in their email thread, and all the stories sound the same. The people qualified, they bought the home, and then something happened in their lives or the world around them, and they were trapped.
The FBI began to warn in 2004 that there was an epidemic of mortgage fraud, which came from the lenders, rather than the borrowers. In the board rooms of big banks, loans were packaged in a way that created complex layers of securities that would leave the senior officers rich even if the institution itself (the bank) failed. This kind of accounting fraud was a sure thing:
1)Grow like crazy
2)Make deliberately bad loans for which you
3)Have extraordinary leverage
4)Don’t put on loss reserves so the loans show up as pure profit
Loss reserves fell to all time lows even as banks made their bad loans.
At the time the regulators should have shut down the banks. There’s a law, called The Prompt Corrective Action Law, that makes this necessary. This law was systematically ignored by regulators. Money and greed ruled everything, including the government.
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