# Whistleblower gives insight into Mortgage Crises. **URL:** \ **Category:** Miscellaneous and Personal Stuff I Must Share\ **Created:** [November 7, 2014, 7:24pm UTC](https://boards.straightdope.com/t/whistleblower-gives-insight-into-mortgage-crises/704005 "2014-11-07T19:24:26Z")\ **Posts on this page:** 5\ **Page:** 1
**Author:** ![aceplace57](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/aceplace57/32/3500_2.png) [@aceplace57](https://boards.straightdope.com/u/aceplace57)\ **Post date:** [November 7, 2014, 7:24pm UTC](https://boards.straightdope.com/t/whistleblower-gives-insight-into-mortgage-crises/704005/1 "2014-11-07T19:24:26Z")
The securities fraud is quite interesting. This lady risked a lot to do the right thing. Her comments about the quality of these troubled mortgages and the circumstances of their application is even more interesting. I’m stunned that people were able falsify their reported earnings and actually got these mortgages. WTH was asleep at the wheel? I got checked out so thoroughly in 1989 that I even had to submit two letters explaining why I had two late credit card payments on my credit report. Both times they were late a few days because I simply didn’t mail them quickly enough. Sears especially will ding your credit if that payment is even a day late. First, I shredded my Sears cc, then I wrote the two mea culpa letters and submitted them. Got my mortgage. It’s been paid off since 2004. (I made extra equity payments on every one of my mortgage payments). How could anyone just blatantly lie and get a mortgage? :dubious: I can see why the mortgage market crashed a few years ago. > **[Whistleblower who caused $9 billion JP Morgan fine speaks out for first time](https://www.nydailynews.com/2014/11/07/whistleblower-who-caused-9-billion-jp-morgan-fine-speaks-out-for-first-time/)** > > The 30-something-year-old Cornell Law grad who caused JP Morgan to pay out $9 billion last year — one of the largest fines in U.S. history — spoke this week about what led her to blow t… > [@](#): > > The 30-something-year-old Cornell Law grad who caused JP Morgan to pay out $9 billion last year — one of the largest fines in U.S. history — spoke this week about what led her to blow the whistle on the banking giant in 2008 and hold a meeting with the Securities and Exchange Commission to reveal what she said was “massive criminal securities fraud.” > [@](#): > > Fleischmann explained in the report that some 40% of randomly sampled mortgage holders with the bank had inflated their incomes in order to be approved for loans. > > In one case, she investigated a manicurist who claimed to be earning $117,000 per year. It was literally impossible. According to Fleischmann’s calculations, the woman would had to have worked 488 days in a single year to earn that amount. > > “And that’s with no overhead," Fleischmann said. “It wasn’t possible.” > > The bank was guilty of accepting countless applications of this nature, she said. > > Despite her efforts to raise the red flags internally to her manager, she was continually shot down by her manager. ---
**Author:** ![monstro](https://avatars.discourse-cdn.com/v4/letter/m/ba9def/32.png) [@monstro](https://boards.straightdope.com/u/monstro)\ **Post date:** [November 7, 2014, 7:34pm UTC](https://boards.straightdope.com/t/whistleblower-gives-insight-into-mortgage-crises/704005/2 "2014-11-07T19:34:01Z")
No one was asleep at the wheel. Everyone who was involved was wide-awake and rubbing their hands together gleefully. ---
**Author:** ![FairyChatMom](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fairychatmom/32/22080_2.png) [@FairyChatMom](https://boards.straightdope.com/u/FairyChatMom)\ **Post date:** [November 7, 2014, 9:49pm UTC](https://boards.straightdope.com/t/whistleblower-gives-insight-into-mortgage-crises/704005/3 "2014-11-07T21:49:05Z")
There was other crap going on, too. I was looking into doing a refinancing at one point. Our income wasn’t an issue - two fairly senior engineer pull in decent money. But the “loan officer” or whatever he was bulked up the refi to “give” us some “equity” by claiming our house was worth something like $40K over the current market value (we knew what houses in our area sold for.) Between the cash back and his fees, our mortgage payment would have barely gone down at all, which was the point of the exercise. And even when I pointed out that he’d overinflated the value of our house, he still tried to argue with me. Needless to say, we didn’t do it, but I have to wonder how many others took way too much imaginary equity out of their homes in deals like this. And as it turned out, it was a damned good thing we turned the guy down. We wound up moving 2 years later and there’s no way on god’s green earth we’d have gotten even close to what our mortgage balance would have been. As it was, we put barely over $2K in our pocket after 4 years. ---
**Author:** ![Emtar\_KronJonDerSohn](https://avatars.discourse-cdn.com/v4/letter/e/58956e/32.png) [@Emtar\_KronJonDerSohn](https://boards.straightdope.com/u/Emtar_KronJonDerSohn)\ **Post date:** [November 7, 2014, 10:34pm UTC](https://boards.straightdope.com/t/whistleblower-gives-insight-into-mortgage-crises/704005/4 "2014-11-07T22:34:50Z")
I’m not surprised. When me and the Mrs bought our first house we got a no-doc loan because that’s what was out there. We honestly reported our income and the broker wanted us to change it because nobody would verify anything and we _deserved_ more house. We’d surely regret not fudging the numbers when we _deserved_ even _more_ house in a few years but couldn’t afford it because prices doubled again. We didn’t do it - we spent about half of what we legitimately qualified for - but I can see how it would be tempting to get into a bigger and fancier house in a nicer neighborhood because you _deserve_ it. ---
**Author:** ![Typo\_Negative](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/typo_negative/32/484_2.png) [@Typo\_Negative](https://boards.straightdope.com/u/Typo_Negative)\ **Post date:** [November 8, 2014, 12:30am UTC](https://boards.straightdope.com/t/whistleblower-gives-insight-into-mortgage-crises/704005/5 "2014-11-08T00:30:31Z")
If only it were as simple as making bad loans for profit. They figured out they could bundle the risky loans together and make a financial product out of them and sell them. PROFIT! Then they figured out that they could insure these bundles…even if they themselves did not own them. If they failed, PROFIT. The insurance companies fell over themselves writing policies on these. PROFIT!