Bank of America specialized in making mortgages with terms that the loan officers and executives like Mairone knew the borrowers could not possibly service. Fraud was the business model. Foreclosure was the expected result.
The Mortgage Bankers Association has conned the FBI in 2007, and the FBI has remained conned. The result is that the FBI operates under a faux definition of "mortgage fraud" in which it is conceptually impossible for the banks and their controlling officers to be criminals.
Given the fact that the CEOs of large fraudulent lenders are criminally liable for tens or even hundreds of thousands of acts of mortgage fraud, we should be seeing our prisons overrun with elite white-collar criminals.
This is the first in a series of columns that use the FBI's 2010 Mortgage Fraud Report to make intelligent inferences about why the prosecutors have ceased prosecuting control frauds directed by senior financial leaders.
For years now this has been DOJ's strategy: to rattle off the number of cases of "financial fraud" or "mortgage fraud" it has won, not a single one of which is the kind of case the public has been demanding.
Although some reasons may appear to support prosecutorial abdication, the size and scope of damages suggest individual wrongdoing must have led to the subprime crisis and that individuals should be prosecuted.
I propose the creation of a new banking industry initiative called NOBAR (Nonstandard Borrowers Alternative Resource). Its mission is to help responsible individuals with bad credit scores -- where reasonable and appropriate -- secure a new mortgage or refi.
Many Americans re-adopted a mythology about wealth that had been discredited and abandoned by most of the world in the 20th century. We need to transform ourselves, remove the blinders, and see things as they really are.