Danny Schechter - ColdType

CHAPTER 8
cOuNT 1: prEDATOrY
subpriME lENDiNg
67
Indictments always follow investigations, and once under
subpoena and tough grilling, executives say the most revealing
things. Here’s how I imagine it:
The original crime was played out in the housing sector,
where massive predatory subprime lending – what I call “subcrime”
– over the years got millions of families into mortgages
they couldn’t afford, and that the lenders knew they couldn’t
sustain. It was enabled by artificially low interest rates from
the Federal Reserve and active support and collusion from top
financial institutions.
Here are just some of the investigations underway and
some of their findings. If I, as just one person can locate these
sources, there must be far more to find. All it will take is a serious
well funded effort by trained professionals.
According to an investigation by the Center of Public Integrity,
25 of the sleaziest subprime lenders were backed by the
biggest “blue chip” banks in the country: CitiGroup, Wells
Fargo, JP Morgan and Bank of America.
Together, the Financial Times reported they originated
$1,000 billion in subprime mortgages issued from 2005-07 –
almost three-quarters of the total. (By the way, these same
banks, also received the vast bulk of the $700 billion in troubled
asset relief funds issued since October 2008. At the same
time, most had supported a well-funded lobbying effort to
prevent tighter regulation of the subprime market.)
The Center also reported that earlier warnings were ignored:
“Washington was warned as long as a decade ago by bank regulators,
consumer advocates and a handful of lawmakers that