JSMedia – Senator Carl Levin is right to accuse mortgage lenders of greed and deception. The financial crisis was caused by reckless lending and lax federal oversight. Some of these companies essentially crashed the economy and the financial system. But Levin isn’t trying to bring down Wall Street. He’s calling on the Justice Department and the Securities and Exchange Commission to investigate and hold these companies accountable.
The report blames the mortgage lenders for the 2008 financial crisis. It details the conduct of several institutions that played a pivotal role in the crisis. The institutions cited in the report include the Office of Thrift Supervision and Washington Mutual, which collapsed aggressively during the housing crisis. The House and Senate have blocked any debate on this bill, but Republicans have floated an alternative, which might lead to an election-year compromise.
In his report, Sen. Levin accuses mortgage lenders’ CEOs of misleading Congress and profiting at the expense of their clients. In contrast, the government-appointed Financial Crisis Inquiry Commission’s report was not as harsh, focusing more on fiscal issues two years after the crisis peaked. The Senate’s new Financial Regulation Bill, which would have regulated the lending industry, would have provided relief to the mortgage market.
Mortgage Lenders and Senator Levin’s Budget Claims
The House has passed legislation calling on the OTS to examine the practices of mortgage lenders. But the governing body doesn’t have the authority to investigate any firm. The Office of Thrift Supervision has jurisdiction over these institutions, but the OTS’s reliance on bank executives to rectify problems makes it difficult to take action in Washington Mutual’s case. It also lacks the legal and regulatory authority to pursue lawsuits against those executives.
Those who are buying mortgage-based securities should research the assets themselves to see if they are a good investment. Goldman Sachs and other big banks have been accused of misrepresenting their clients by the OTS.gov is an official website that provides a list of such firms and their clients. The OTCB is a non-governmental organization that has jurisdiction over the financial sector.
As part of the investigation, Ameriquest agreed to pay $325 million to settle a federal probe. In addition to Ameriquest, Citigroup purchased the loan-servicing unit and Argent Mortgage. Deutsche Bank packaged securities backed by Countrywide Home Loans. This pushed the company to become aggressive in the design of risky mortgage loans. The SEC’s investigation led to the company’s $550 million settlement with states.
When lawmakers questioned the CEO of Goldman Sachs, he said the bank was incensible. The CEO denied wrongdoing, but the company admitted to misconduct that contributed to the financial crisis. The bank agreed to a multi-billion-dollar settlement with the states. The settlement is still ongoing. However, it is likely that more banks will be required to pay a similar penalty.
The bipartisan report also accuses mortgage lenders of greed and deceptive practices. The bipartisan group criticized the mortgage industry in a speech on Monday. It found evidence of widespread fraud and a culture of greed in the banking industry. The committee subsequently issued the bipartisan report. This report is the most comprehensive to date on the industry. It also highlights the importance of regulating these companies.
As a result, he called for the government to investigate Deutsche Bank and other mortgage-related firms. The bank was not only a seller of mortgages. It was a patron of the subprime industry in the United States during the boom years. It also helped package nearly $100 billion of mortgage-backed securities. In addition, it was involved in the securitization of garbage loans.
The report blames Deutsche Bank for a former trader. Although this bank has never been charged with wrongdoing, the investigation focused on Lippmann, a former executive at the Deutsche Bank. The scandal engulfs many mortgage-related companies, including the government. It undermines the legitimacy of democratic governance. But it is important to take the time to investigate these concerns before they lead to further damage.