I’m sure neither the title of this article, nor the content will surprise many people. That Countrywide, Bank of America or any other large lender operated in a less than honest manor prior to the collapse of the real estate market is far from shocking.
Still, it’s interesting to read some of the first-hand accounts of what was actually going on behind closed doors – especially coming from an internal fraud monitor.
Four years removed from the collapse, people still want to blame the person who purchased a $100k home when they could only afford $60k.
Sure, they’re part of the problem – but only a small part.
Fraudulent activities by lenders, mortgage brokers, mortgage reps, etc., still deserve the brunt of the blame.
Make no mistake, I’m not negating personal responsibility, but it goes beyond knowing what you can afford and what you can’t.
Fast-talking mortgage reps regularly pushed buyers into homes they couldn’t afford and loans that made no practical sense. They sold people on future value, or re-financing in a couple years, or whatever they had to be told to sign on the line.
Attorneys, doctors, accountants, you name it – regardless of profession, most people are remarkably naïve and uninformed when it comes to mortgages, so they trusted their lender.
Going forward, it’s going to be different. Mortgage reps must be licensed. Lenders will (hopefully) be more regulated. Appraisers will be forced to work within far stricter guidelines.
However, this idea – as put forth in the article by BofA – that this is “water under the bridge” – is wrong. More articles like this need to come out and more whistleblowers need to be heard. It’s the only way we’re going to avoid this happening again down the road…
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