Widespread fraud. Hundreds of billions of dollars in losses. Thousands of displaced homeowners. You’d think somebody would have seen it coming…
Oh.
The Los Angeles Times reports that as early as 2004, the FBI accurately forecast the consequences of unscrupulous lending practices left unchecked. Unfortunately, despite the agency’s assurances that it was combating the problem, its focus on "national security and other priorities" left white collar crimes a secondary priority.
How secondary? During the S&L bust of the ’80s and ’90s, the agency had 1,000 agents devoted to banking fraud. In 2007, the number of agents pursuing mortgage fraud totaled 100.
To critics, that’s a sign that the FBI dropped the ball. The agency, meanwhile, says it did the best it could—mortgage companies simply didn’t want to hear its warnings about the growing fraud problem. And your home—oh yeah, that’s the bank’s now.
Let’s hope the next time around, somebody is paying a little more attention.
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