The Indy Star is reporting that Attorney General, Steve Carter, is suing Countrywide in Steuben County.
Carter alleges that Countrywide provided financial incentives for brokers to sell potentially risky loans, omitted or misleadingly presented loan terms, and misled borrowers about prepayment penalties or the time in which they would apply.
He claimed that the company also inflated or fabricated borrowers’ incomes so they could be approved for bigger loans.
These are the kinds of things that make me a little cautious about the blame-the-borrower mentality I hear sometimes. If people who work in the financial industry every day are lying to borrowers or deliberately short-circuiting safety precautions, then it’s not just the borrower’s fault.
Then, in those cases, the lender should be the one to do the bail out, not the public.
That would be the just thing. Whether it’s practical is a tough question. Some of the wrongdoers may have disappeared or be insolvent; leaving us with a choice of various more or less innocent parties who will get screwed. Also, there is the “too big to fail” possibility where doing the just thing might end up hurting everyone regardless.
The “too big to fail” line is a load of crap. I don’t see why the government can’t just let them fail, take them over, and get a new crew to run the new/old company.
Letting the same drunken idiots who ran the company in the ground keep the wheel because it is “unsafe” to stop and switch drivers is silly.
It will never be just for the public to bail these things out. It always takes two to tango.
The innocent party is the neighbor who played it straight, taking a conventional loan that was clearly under the level of what they could afford, and who makes all their payments- who is then left next to a house in foreclosure, and therefore sees his property value suffer.
I think that justice for both sides is prison. Lender who lends irresponsibly, and borrower who borrows irresponsibly- off to the clink!
Jason has it right. If a lender falls, there should be no propping it up. What does the Lender learn, then, except that they can continue making horible decisions without pain?
Ah, there’s that good old reliable Libertarian support for the massive, state-subsidized, taxpayer-funded prison-industrial complex.
Oh, the troll returns! I’m so lucky.