SIMON JOHNSON: Occupy The Mortgage Lenders

California Foreclosure

Photo: inman news via flickr

Participants in the Occupy Wall Street movement are right to argue that the big banks have never properly been investigated for the mortgage origination, aggregation, and securitization behaviour that was central to the financial crisis – and to the loss of more than eight million jobs.But, thanks to the efforts of New York’s attorney general, Eric Schneiderman, and others, serious discussion has started in the United States about an out-of court mortgage settlement between state attorney generals and prominent financial-sector firms.

Talks among state officials, the Obama administration, and the banks are currently focused on reported abuses in servicing mortgages, foreclosing on homes, and evicting their residents. But leading banks are also accused of illegal behaviour – inducing people to borrow, for example, by deceiving them about the interest rate that would actually be paid, while misrepresenting the resulting mortgage-backed securities to investors.

Keep reading ‘Occupy The Mortgage Lenders’ at Project Syndicate →
This post originally appeared at Project Syndicate.

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