[GTX63]

Thanohano... greed tied with no oversight is what started the decline of the industry A massive expensive foreclosure mess was created, the banks did not want to pay for it, no one was looking at what the nationals were doing, lots of desperate unemployed people in RE looking to make ends meet, and the internet made it easy for them to find these people for pretty much free. So the nationals fleeced the industry and the banks made them richer than rich to do it, intentional or not.

Begging to differ, it was gov oversight that caused such a debacle. Greed wasn't born 20 years ago. Federal entities decided they knew better how to grow an economy, and with just as much a political motive, pressed lenders to hand out money to anyone who could fog a mirror.

After all, HUD fees (aka government funds) are designed to pay contractors to ensure they perform high quality professional services. I am not a lawyer, but I believe defrauding the government is a federal offense.

The original intent may have been, and was long before the floodgate opened and poured in the waves of middleman "asset" companies operating out of suites and PO Boxes. The issue with defrauding the government is proving intent. Greed by itself is not a crime.

The OIG is all about preventing fraud and abuse of government funds. Best case, they get a fine. Worse case, a lot of the owners and executives will serve time, get fined, and be stripped of their assets.

There are uncountable governmental agencies tasked with keeping fraud and waste to a minimum; I cannot name a single one I would consider successful.
How many carpet bagging national/regionals that went belly up owing hundreds of thousands of dollars to the contractor have CEOs and Vice Presidents currently doing time. How many are repaying the monies? Renaming, rebranding is plan A. Selling, liquidating and/or transferring loot is plan B. Bankruptcy is plan C. A little of A,B,C is plan D.
I believe many of the former Buczek contractors would like to hear what the OIG is doing for them, but I don't expect it would currently be very much.

Why do you think insurance became a requirement right around the time fees started dropping like a brick? It was not about blurrying the line between contractor and emplyee, it was about protecting their cash from the poor business decisions they all were making.

Insurance became an issue because of corporate greed. Industry leaders knew this gold rush was finite and created their own end game. Constantly looking to increase revenues, they knew cutting rates would result in a loss of workmanship and an increase in marginal contractors. Industry specific insurance and the ever thickening tangle of hoops they made the bottom rung vendor deal with created the hedge and space they needed to continue to net more while risking less.


What happened smeared the private market and gave weight to those who feel more regulation and oversight is needed to watch over the crooks and thieves we all are. I have no more faith in a heroin dealer's remedy for addiction.

 

[GTX63]

Federal Government
Dodd Frank
Countrywide
Field Assets
X&O Regional
You

Score one thru six by the list above and see where it comes out.

I fault no one person for putting together the trash fire that the mortgage lending industry became by 2005, though two names listed above keep blinking like a "cable tv/wifi sign'.
If everyone on that list is culpable, my thought is you locate the source and eliminate it.
Why isn't there more oversight? Why isn't Uncle Sugar cracking down on financial institutions who enable nationals to abuse the system?

It isn't sexy.
Media is uneducated and trained to go into the water no further than ankle deep.
The Feds have already collected their pound of flesh from the big boys.
Lobbyists and pocket fed politicians will not allow more than a passing glance at an issue they believe will pass in a few short years.
It isn't in their interests (see above).

The banking industry is one of the most regulated fields in the country, and not always for their own good. Many regs are political, regional, anti discriminatory and/or based on feel good ideas. If you like, change the word "fault" when itemizing the list above to "expected better".

News stories focus on the poor homeowner who was mislead, over extended and lost everything due to the evil banks. Or maybe the contractor that stole everything inside while he changed out the locks. That is what sells. My experience is that most homeowners defaulted and abandoned these homes due to divorce, drugs, poor choices and their own greed. Don't blame Chase because you wanted to live in a 300k house on one income and they said "ok".
I'm more than happy to sit and watch if a National takes it on the chin and goes down hard but their own lobbyists have their ears to the wall and they tend to head off trouble beforehand. I also have no sympathy for BOA, Citicorp, etc.
I have no faith in the government to regulate anything; other wise only criminals would be restricted from owning guns and DUI would have been eliminated. As of today, smoking pot is legal yet smoking a Marlborough may not. Go figure.

You can't teach a three legged horse to pull a wagon straight, meaning the whole structure is flawed from the get go. There is no one, even general solution. But maybe someone other than the banks should also start paying for the messes they create rather than just posture and play the advocate.