Comments on: Discussion with a Mortgage Fraudster: How to steal $600K http://www.personalloanportfolio.com/329/discussion-mortgage-fraud-how-to-steal/ Lending Club and Prosper.com Experience Sat, 20 Feb 2010 21:03:27 -0600 http://wordpress.org/?v=2.9.1 hourly 1 By: Personal Loan Portfolio http://www.personalloanportfolio.com/329/discussion-mortgage-fraud-how-to-steal/comment-page-1/#comment-1381 Personal Loan Portfolio Wed, 31 Dec 2008 06:08:05 +0000 http://www.personalloanportfolio.com/?p=329#comment-1381 Thanks for stopping by to comment Kitty. I agree that I think he oversimplified it as well. I was just giving the guy's opinion because I found it interesting. Most interesting was that he seemed to have started out with good intentions just trying to get over a shortfall in cash flow that he thought would be temporary and it was just so easy to continue. It sounded like he felt bad and that fraud was not the intention -- just my analysis of the result. By the way, who is Chris Cox? Thanks for stopping by to comment Kitty. I agree that I think he oversimplified it as well. I was just giving the guy’s opinion because I found it interesting. Most interesting was that he seemed to have started out with good intentions just trying to get over a shortfall in cash flow that he thought would be temporary and it was just so easy to continue. It sounded like he felt bad and that fraud was not the intention — just my analysis of the result.

By the way, who is Chris Cox?

]]> By: kitty http://www.personalloanportfolio.com/329/discussion-mortgage-fraud-how-to-steal/comment-page-1/#comment-1374 kitty Sun, 28 Dec 2008 23:32:05 +0000 http://www.personalloanportfolio.com/?p=329#comment-1374 "He said that he believes that the mortgage mess occurred because the banks did not care if he paid back the loans because the mortgages were immediately resold to other investors after the bank pocketed fees on both sides of the transaction. " It's a bit simplistic. Without the whole derivatives mess, credit default swaps and the SEC exemption of 5 major brokerages from leveraging limit, the crisis would've been much much smaller. Applying mark-to-market rule to MBS contributed as well. Certainly banks lending practices started it all, but derivatives amplified the problem exponentially. The loss in the value of CDOs are many times greater than the loss in mortgages represented by the CDOs. Not that it gets this guy off the hook. Fraud is a fraud and he contributed to so many of us losing a lot of money even if his contribution is much smaller than that of, for example, Chris Cox. “He said that he believes that the mortgage mess occurred because the banks did not care if he paid back the loans because the mortgages were immediately resold to other investors after the bank pocketed fees on both sides of the transaction. ”
It’s a bit simplistic. Without the whole derivatives mess, credit default swaps and the SEC exemption of 5 major brokerages from leveraging limit, the crisis would’ve been much much smaller. Applying mark-to-market rule to MBS contributed as well. Certainly banks lending practices started it all, but derivatives amplified the problem exponentially. The loss in the value of CDOs are many times greater than the loss in mortgages represented by the CDOs.

Not that it gets this guy off the hook. Fraud is a fraud and he contributed to so many of us losing a lot of money even if his contribution is much smaller than that of, for example, Chris Cox.

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