"This is a crisis that we know empirically involved million of fraudulent mortgages being made. We know that the losses are out there. We know that the industry extorted FASB to gimmick the accounting rules, so they didn't have to recognize the losses. We know that the Fed has huge positions as collateral in these fraudulent mortgages. We've seen the Fed, Ambac, Fannie, Freddie, Pimco, Blackrock -- all putting back after investigating tens of billions of dollars of mortgages, and saying, these were sold under false representations and warranties -- frauds, and absolutely no one has gone to jail for it."
and
"And the problem is we have zero criminal referrals out of most of the regulatory agencies. In comparison in the savings and loan debacle again - maybe 1/40th of the size -- we had thousands of criminal referrals , we got over a thousand priority felony convictions of the elites - these are not the little tellers, the vice presidents -- these are the top people at the savings and loans. There are NONE now. The regulators have to serve as the sherpas to have successful criminal prosecution. We've got to do the heavy lifting, and we have to do the guide function, because the FBI can't possibly do this on its own.
Next thing that has to be done - the FBI formed a partnership with the Mortgage Bankers Association -- that's the trade association of the perps."
Including the fraud politicians put on the American people: everyone should own a house, which came in the form of artificially low interest rates, laxed lending standards, and tax credits.
Here's what I have to say to investors of mortgage-backed securities, including Fannie & Freddie: caveat emptor. The ultimate buyer was the U.S. taxpayer, because those investors knew Fannie & Freddie forays into subprime were covered, why shouldn't theirs be? It's the American Dream, right? And sure enough, they got their bailout, aptly named TARP!
We all got TARPed!
Artificially low interest rates attracted people that otherwise wouldn't be able to afford a house. Laxed lending standards turned a blind eye to the credit worthiness of borrowers. Land use restrictions limited supply and tax credits drove up demand.
Big banking and big government created the big bubble and big recession. And they're still rolling in the dough: http://blogs.law.harvard.edu/philg/2009/10/17/how-wall-stree... (devaluing our money in the process)
Vote out people like Dodd and Frank (and any republican who supports fiddling with the market - subsidies). Have the wealthy bankers who made their fortunes off of this bubble help those responsible people who are in danger of losing their homes.