Phil Angelides, the head of the Financial Crisis Inquiry Commission, weighs in on Obama's committee to investigate mortgage fraud, a committee that I think is mere window dressing for the reelection campaign. Angelides believes that Justice is not deploying enough resources to the investigation of the crimes committed by many in the mortgage industry. His advice to the committee:
- First, the working group must have a strong and independent staff with the budget, expertise and training to do the job.
- Second, bank regulators, who are currently not part of the group, should be.
- Third, the working group’s scope needs to be broader — it should include mortgage origination, not just securitization. It should eschew a narrow view of mortgage fraud that focuses primarily on borrowers in favor of one that also encompasses the wholesale creation, sale and packaging of defective mortgages led by corporate executives.
- Finally, the working group needs to prioritize the cases that caused the biggest losses and damage, moving with the creativity and flexibility that state attorneys general like Mr. Schneiderman have urged.
It would be great if the committee followed this advice. I doubt that it will. The financial thieves have gotten away with their crimes for at least five years. Why should they worry now?
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