Friday, March 21, 2008

The Subprime Crisis and Widespread Corporate Fraud

There are many causes for the current subprime (and prime) mortgage crisis. One such cause that is coming more to the forefront is the widespread corporate fraud that exists (possibly existed, they have tightened up quite a bit) in the mortgage industry. The FBI is investigated 17 mortgage firms accused of Fraud.

If you have any doubt that things will be supressed for the forseeble future, check out this article in the New York Times. One factor in the real estate boom was the type of loans that were being written, standards are being tightened dramatically so this factor will likely not contribute to a rebound in the future.

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