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Janet Tavakoli on the "Myth of the Immoral Debtor"; An email from a Charlie Munger student; "Business as Usual"

By Mike Shedlock on 09/23/2010 – 9:18 am PDTOne Comment

Emails continue to fly in regarding Amazing Arrogance.

I would like to share a few of them including a second email from Janet Tavakoli regarding bankers’ sense of entitlement and “the myth of the immoral debtor“, a term Tavakoli attributes to Elizabeth Warren.

From Janet Tavakoli:

Hello Mish,

Bankers have an enormous, unjustified, sense of entitlement. These people work for failed institutions, yet they feel they are entitled to bonuses that far exceed those of bankers and investment bankers of one or two decades ago.

Note that Berkshire Hathaway owns a big chunk of Wells Fargo, which bought Wachovia, which in turn bought Golden West, the very seat of a lot of fraudulent lending.

Of course, we bailed out Wells Fargo and relaxed accounting rules, so no one knows the true size of the hole in that balance sheet. Charles Munger’s remarks are all the more bizarre in this context.

Here in Illinois, people were lied to and deceived with phony docs. Among many other frauds, people would show up at a closing for a fixed rate loan and be presented with docs for an option ARM. All sorts of variations occurred.

Lisa Madigan, the Illinois Attorney General was first to file the suit against Countrywide, and beat California by minutes. Countrywide settled for $8+ billion on the combined suits, but that was way too low. Madigan publicly stated: “Borrowers didn’t break the law; Countrywide broke the law.”

Of course, some borrowers committed fraud, overreached, or got in over their heads, and there are certainly cases of irresponsibility. However, the reality of the mortgage lending market is that it was rife with fraud by mortgage lenders-from even before the first huge Ameriquest fraud.

I was on CNBC a few months ago and Kudlow, Santelli, and others shouted me down when I brought up predatory lending. Columbia Journalism Review and others took CNBC to task. Widespread predatory lending is well documented. This isn’t a matter of opinion, it’s a matter of fact

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Tags: , columbia journalism review, , , illinois attorney general, shame

Related Articles:

  1. Janet Tavakoli on the "Myth of the Amoral Debtor"; An email from a Charlie Munger student; "Business as Usual"
  2. HSBC Commercial Account Manager responds to "Amazing Arrogance, Gall, Chutzpa, and Unmitigated Effrontery from Berkshire Hathaway"
  3. Warren Buffett Books
  4. Charlie Rose: Face-to-face with Elizabeth Warren
  5. Munger on the economic crisis

One Comment »

  • Donna says:

    U.S. regulators refused to regulate or even investigate Wells Fargo’s lending practices. Wells Fargo teams up with its army of
    attorneys to defraud us.

    Wells Fargo committed prosecutable crime against us. We lost our home. Something is wrong with this picture.

    Here are the facts.

    1. it is illegal for Wells Fargo to make mortgage loan to us based on hugely inflated appraisal.

    Fact: – Wells Fargo’s fraudulent appraisal valued our home at $718,000
    – Wells Fargo’s own review appraisal valued our home at $475,000
    – Nevada Attorney General’s office suspended the appraiser’s license for committing appraisal fraud on our home.
    – Nevada Appraiser Licensing Board mandated the appraiser to complete appraisal fraud course before regaining his real estate
    appraiser license.
    – Nevada Revised Statue NRS 205.372 states that it’s category C felony to make mortgage loans based on fraudulent appraisal.
    – Cases of Attorney General’s indictments against attorneys, loan brokers for teaming up make fraudulent loans to defraud
    homeowners.

    2. it is illegal for Wells Fargo to wrongfully foreclose our home based on fraudulent appraisal and mortgage loan.
    You can find all the facts on our website. http://www.wellsfargomortgagefraud.com.

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