Crocodilian

The Power of Unintended Consequences: SuperFreakonomics, by Steven D. Levitt and Stephen J. Dubner

@ed233
"Misrepresented and or fraudulent lender's statements were produced creating false gross debt ratios and valuations.Mortgage brokers routinely misrepresented the fine print of contractual documents to the detriment of the borrower. Credit rating agencies accepted supporting documentation without making background checks"
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Yes. This point should be underlined. We constructed a system whose rules were "write down some numbers in some boxes and the Government will guarantee you hundreds of thousands of dollars in mortgage loans. buyers and their collaborating bankers, realtors, appraisers, mortgage brokers just put down "numbers that work" in the boxes . . . since no one was checking, or had any incentive to check, it is also not surprising that many of these "numbers in boxes" turned out to be "not quite right".

In the latter part of the mortgage/real estate bubble, the extent of fraud was huge. One of the most common was "owner occupancy". Lots of speculators took "free money" in a "heads I win, tails I walk away" bet, made possible by a far-too-generous program of mortgage guarantees.

The FBI produces an annual "Mortgage Fraud Report". Read it here:
www.fbi.gov/publicatio...