Federal Audits Accuse Mortgage Firms Of Defrauding Taxpayers

As many of you probably saw earlier this week, audits conducted by the Department of Housing and Urban Development accused the five largest mortgage companies in the U.S – Chase, Bank of America, CitiGroup, Wells Fargo and Ally (formerly GMAC) - of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans, according to the The Huffington Post.

As always, Shahien Nasiripour does an excellent job of breaking down details.

I really don’t have much to add to this, because in the end, all that will likely happen is they’ll get tagged with some hefty fines – or at least, hefty fines by yours and my standards – and go right back to earning record profits. They’re “too big to fail” so it’s fairly certain they won’t be shut down and based on what we’ve seen since the great recession started, it’s highly unlikely any individual will be held responsible.

And then what happens with the fines - the money will go to the federal government and be used for what? To re-pave the same stretch of road outside my office that was just torn apart and re-paved last summer? Fantastic.

I’d rather see the money given back to homeowners in the form of principle reductions, or in the form of cash payments to people foreclosed on illegally - specifically, those TOLD to go delinquent in order to receive assistance…