Mortgage Fraud: Will Wall Street Finally Have to Pay for Its Misdeeds?

---

Wall Street may soon have to finally pay for its folly. Earlier this week, the US Attorneys office of the Department of Justice sued Deutsche Bank for allegedly tricking a government insurance program into backing mortgage loans that were much riskier than they were portrayed. Many of those loans have defaulted causing nearly $400 million in losses for the government program already, and potentially much more. The question is what other big banks were also abusing government home loan programs during the housing bubble and after.

Of course, we have known for a while that banks and mortgage lenders were busy during the housing bubble passing off bad loans as good. That was in part what the $500 million Goldman Sachs settlement with the Securities Exchange Commission last year was about. Even when there wasn’t direct fraud, investment banks were using complex mortgage derivatives to make their home loan deals look safer than they were. What’s different is that for the first time since the financial crisis, it looks like the government is going to try to make Wall Street and big banks pay up for their poor and deceptive lending practices. So which banks will the government go after next?

Full Story >>>> Time