Years down the road, the words "subprime mortgage crisis" might immediately evoke the first decade of this century for many Americans.
It was just a handful-plus of years that the bottom seemed to be falling out on home mortgages and values across the country, with banks and other lenders being routinely excoriated for their involvement -- sometime proven, sometimes merely alleged -- in predatory mortgage schemes and other fraudulently related borrowing activities.
Although the legal response by state and federal authorities was strong and comprehensive, it was -- and continues to be -- criticized by many commentators contending that that it did not go far enough.
Put another way: Some people in Florida and elsewhere across the country want to see front-page stories chronicling criminal outcomes for individual defendants who receive lengthy prison sentences for their involvement in mortgage fraud.
That large fines and other penalties have been doled out over the past several years cannot be reasonably questioned. Reportedly, a task force established by President Obama in 2012 to prosecute questionable underwriting practices has netted close to $37 billion in fines. Bank of America alone paid nearly $17 billion last year to settle mortgage-related fraud claims.
Those penalties are civil remedies, though, not resulting in incarceration for any individuals. Potential criminal penalties now comprise the focus for the United States Department of Justice, with Attorney General Eric Holder taking aggressive action in his final days on the job to identify and possibly bring criminal cases against individual defendants.
The ultimate decision on prosecutions will be made by Holder's successor, Loretta Lynch, who will be taking the reins of the DOJ soon.
We will timely update our readers with any material developments that emerge regarding this subject matter.
Source: Bloomberg, "Holder asks lawyers to pursue bankers in mortgage fraud," Keri Geiger, Feb. 17, 2015