How Did the Banks Get Away With Pledging Mortgages to Multiple Buyers?
It’s been repeatedly documented that mortgages were pledged multiple times to different buyers. Some people (including one of the country’s top bankruptcy lawyers) have said they don’t buy it.
Specifically, they ask such questions as:
•With a mortgage sold to two different entities, wouldn’t the income from the mortgage be shown on the books of both entities?
•Was the interest/principal payments that were made by the homeowner before they stopped being divided between both entities? If so, wouldn’t this have rung alarm bells immediately?
•If only one was getting it, why didn’t the other entity immediately try to foreclose?
•If there was one servicer involved, was the servicer covering the difference between what was collected and the payments actually made? If so, how did the servicer do this and still remain in business?
•If two servicers were involved, why didn’t this come out sooner or were both servicers hiding this fraud?
The leading experts on mortgage fraud – L. Randall Wray (economics professor), Christopher Whalen (banking expert with Institutional Risk Analytics), and William K. Black (professor of economics and law, and the senior regulator during the S & L crisis) – explain. Incredibly, Whalen begins with the argument that nobody may have noticed it until now. Reading further, Prof Black says “double pledges in the modern era require both (A) fraud (on the part of the borrower or purchaser) and incompetence, indifference, or corruption on the part of the original secured lender or their agents. Looks like we got all that too. Sheesh!