We've heard the government blaming mortgage brokers, lawyers, borrowers, etc time and time again, all the while ignoring what we called the "unindicted co-conspirators", the banks that actually made the loans. Now we finally have someone that's pointing the finger directly at the banks that were at the root of the mortgage and real estate meltdown. Defense attorney Michael Walsh in his opening statement in phase two of the Plantation cops mortgage fraud trial introduces the jurors to the "unindicted co-conspirators", from his opening statement...
It can't be the banks with all their investment bankers, all their certified financial planners, all their lawyers, all their licenses, all their charters.
Of course not! They wouldn't dare commit a crime let alone financial fraud?! Remember, it wasn't the banks fault, the blame was squarely on the borrowers and the brokers who lied on their loan applications...
Mr. Sullivan told you the banks are going to tell you that they relied on that. You will not hear from a single person, not one, nada, not a single person who processed a single loan in this case. Do you know where those people are? Neither do I, neither does the Government.
Exactly! It wasn't the banks or the people at the banks whose responsibility it was to process these loans or verify what was on the applications fault for dolling out all the money to these people who allegedly lied on the loan applications!
Every single bank, not the bank by name, but the individuals in the bank were criminals, and you will hear that the Government hasn't indicted a single banker except for one for all the stuff they did.
It was the banks and their reps that told the brokers what they needed in order to fund these loans, they set the guidelines for the debt to income ratios, they set the requirements for employment, etc. It wasn't up to the broker or the borrower to approve the loans, it was strictly up to the bank. The banks could have easily called and verified what was on the applications, but they chose not to, they chose not to as they needed to hand out the money as fast as they possibly could so they could resell the loans and make more money.
These institutions, call them the big banks. Little banks, obviously, LB, little banks. Little banks is where the crooks worked at, crooks, not people who would be guiled, but people in the business of beguiling, people who like to -- people who lie. I could use big words. When it comes down to it, it is a lie.
These little banks and these crooks, Matt Gulla and Rene Rodriguez, what they did, what they did is, on every single real estate transaction they made, guess who got paid? Matt and Rene, between five and $25,000 per loan. Guess how many people they committed fraud to? Every single loan they ever processed. Not just for the defendants the Government has decided to prosecute, but each and every single loan.
Nothing new here, just the first time that I know of that an attorney has decided to bring in the banks who till now have claimed that they were a victim of these alleged fraudsters.
What happens, John Q. Public, anybody that went into them, came into Matt Gulla and Rene Rodriguez -- Matt Gulla and Rene Rodriguez were in bed figuratively, in the criminal bed with the little banks and crooks. Why? Because the little banks would take all these loans that they committed fraud on, package them up and sell them to the big banks, and the big banks would pay them.
So, in other words, A would borrow money from B. A's money would be paid back by C. The big banks never cared if B paid them back, if B did, that was icing on the cake. The little banks, the money they lent to these borrowers through extortion is loans, predatorial type loans did everything. The fraud that is on the loans was perpetrated by the mortgage brokers and the banks.
So, these loans that the banks and mortgage brokers scammed up, that is why you will see the fraud in there, they sold them to the big banks and they hid all that fraud.
Taking into account what Mr. Walsh has outlined in his opening statement and the facts that we're already all to familiar with regarding the lenders complicity in these loans, why hasn't the government gone after any of these lenders? Think of the tens of millions of dollars that state and federal prosecutors have spent prosecuting these crimes yet to date they haven't gone after the real culprits? This is no different than law enforcement targeting the corner drug dealer but never going after the kingpin who's growing, processing and importing the drugs. When will a prosecutor grow a pair and finally file charges against these banks?