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Senate Committee Votes To Fingerprint Lenders 146

Posted by kdawson
from the i-am-who-i-am-because-i-say-so dept.
tjstork recommends a blog post up at Openmarket.org on the passage by a Senate committee of a fingerprinting provision in a foreclosure assistance bill. The provision would require thousands of people connected with the mortgage industry, even tangentially — possibly including part-time and seasonal real estate agents — to send fingerprints to the feds for storage in a database. No explanation is in evidence as to how this would help the problem of loan fraud. The measure passed the Senate Banking Committee by a bipartisan majority of 19 to 2. "The measure the committee passed states that 'an individual may not engage in the business of a loan originator without first... obtaining a unique identifier.' To obtain this 'identifier,' an individual is required to 'furnish to the newly created Nationwide Mortgage Licensing System and Registry 'information concerning the applicant's identity, including fingerprints for submission' to the FBI and other government agencies."
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Senate Committee Votes To Fingerprint Lenders

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  • Knee-jerk (Score:4, Insightful)

    by Shadow Wrought (586631) * <{shadow.wrought} {at} {gmail.com}> on Saturday May 24, 2008 @03:50PM (#23530592) Homepage Journal
    No explanation is in evidence as to how this would help the problem of loan fraud.

    Uh, how about, so they can track the people making fraudulent loans regardless of what identity they assume? Maybe?

    • Re: (Score:2, Troll)

      by marbike (35297) *
      When most loan fraud is done via identity theft, how does this initiative assist in finding the people committing actual fraud?

      Yes, some fraud will certainly occur from within the industry, but the majority is done by people outside.
      • naturally (Score:5, Insightful)

        by v1 (525388) on Saturday May 24, 2008 @03:58PM (#23530656) Homepage Journal
        haven't you heard? when you can't find a way to solve the problem, you do the second best thing. Solve some other problem instead, and market it as a solution to the first problem.
        • Re:naturally (Score:4, Insightful)

          by Hankapobe (1290722) on Saturday May 24, 2008 @04:10PM (#23530748)

          haven't you heard? when you can't find a way to solve the problem, you do the second best thing. Solve some other problem instead, and market it as a solution to the first problem.

          I would just call it a knee-jerk reaction which is the typical operating and decision method of our Congress. Of course, if they actually stopped to think and get their facts straight, they would immediately be accused of not doing anything or not acting fast enough.

          • Re:naturally (Score:4, Insightful)

            by Yvanhoe (564877) on Saturday May 24, 2008 @05:00PM (#23531180) Journal
            You mean that the job of a politician involves problem solving and that it can be hard ? Maaan, we should better start to favor competence over ideology in politics then...
            • Re: (Score:3, Insightful)

              by aurispector (530273)
              Never happen.

              This trend of creeping fascism has to stop.
              • by Opportunist (166417) on Saturday May 24, 2008 @09:52PM (#23533110)
                If this is creeping for you, I guess your car's meter shows speed in fractions of c.
                • It really is hard to believe. For some reason, nobody seems to think it's a big deal to snoop around on people's private property and private communications because they're electronic. Last I checked it was a federal crime to tamper with people's mail. Think that sort of legislation would pass in today's political climate?
                  • Think the second amendment had any chance to pass (or even be considered)? Or the first? Or fourth and fifth?

                    All those things work against a centralized government with limitless power over its subjects. I doubt anything like this would even be considered today. If the founding fathers saw what became of their country, I'm fairly sure they'd start another revolt.
          • Re: (Score:3, Funny)

            by Cally (10873)
            Wait - are you saying our elected representatives might act in a way calculated to maximise their own, narrow, short-term interests?

            Woa, dude. My whole world just turned upside-down.

      • Re:Knee-jerk (Score:5, Insightful)

        by hey! (33014) on Saturday May 24, 2008 @05:35PM (#23531394) Homepage Journal

        When most loan fraud is done via identity theft, how does this initiative assist in finding the people committing actual fraud?
        Well, consumer credit is a different thing. What they are dealing with is the home equity crisis. While it's not unheard of, it's hard to fence a house -- in the felonious sense of the word. So insiders who are inflating their sales and commissions by falsifying aspects of loan deals are a bigger fraction of the fraud being committed than in something like credit card fraud. So the idea is that this keeps a sharp operator from committing fraud, then skipping town and setting up shop in a different place under an assumed (or stolen) name.

        Unfortunately 99% of this crisis fits the standard market bubble paradigm. The difference is that this hits people ... er... where they live. Once the irrational exhuberance is taken out of the market, the opportunity for fraud is greatly reduced.

        In fact, we have the opposite problem: investors are spooked. Coming down hard on fraud might help a tiny bit, but primarily investors are spooked by their own collective insanity.

        If it makes investors a bit less risk averse, it's worth doing, but I doubt it will. We need to get a bit more momentum going in the credit market. Financial markets have about a ten year memory, so the time to really come down hard on fraud will be in about five years.
        • by xenocide2 (231786)
          Investors are not "spooked". Have you ever wondered why oil went as high as it is in the futures market, without a contraction of supply? Sure, China and other worldwide growth is part of it, but I think a substantial part of it is investors heading for commodities after the subprime market did a number on both bonds and stocks. The smart ones aren't risk adverse -- they're busy making the next bubble =(
    • by PPH (736903)

      The current mortgage crisis was caused by a bunch of well meaning, but otherwise lazy or stupid people making loans that shouldn't have been made. The contribution of criminal activity (the sort of thing fingerprint tracking would discourage) is not significant.

      • The current mortgage crisis was caused by a bunch of well meaning, but otherwise lazy or stupid people...
        You assume ignorance in an activity where ignorance is not an excuse.
      • Re: (Score:2, Interesting)

        by UncleWilly (1128141)
        I've heard information otherwise. Like giving multiple no-money-down-cash-back mortgages to people with no visible means of support, then they turn around and sell the mortgages to 'Wall Street'. I hear in the greater Chicago area you can easily find the same name half a dozen times on the "abandoned house list" of homeowners. It seems more like this was a grass-roots organized crime activity which the support industries were complicit with. Not to say that good people have not been caught up by not underst
        • by PPH (736903)
          But this sounds like justification for fingerprinting borrowers, not lenders.
    • Re: (Score:3, Insightful)

      This is just another excuse for tracking people. It's a Total Control/Total Surveillance initiative. Haven't heard of it yet? It's happening slowly throughout the world. In the "free" world it happens slowly and in the guise of protecting people.

      Of course an educated and relatively egalitarian public (that is a public were economic abuses and monopolistic practices don't occur) will be naturally immune from abuses. But this is not what the Elite wants. The Elite would rather have a small percentage of poor
    • by nurb432 (527695)
      So that makes it ok to track citizens that are not under a court approved investigation? Personally, i don't think so. This will also branch out to other things as well, since you might be committing fraud when you buy that bottle of beer.

      I remember when your SSN wasn't supposed to be used to identify you other then for tax purposes and we see how well that intent was stuck to. ( and if you honestly believe at lie that they fed you, then you are a fool ).

  • Good luck in getting Guido "The Killer Pimp" Loanshark to send in his finger prints...
  • by PC and Sony Fanboy (1248258) on Saturday May 24, 2008 @04:00PM (#23530674) Journal

    No explanation is in evidence as to how this would help the problem of loan fraud.
    ... you mean, kinda like the PATRIOT act cutting down on terrorism?
  • Seems to me.. (Score:4, Interesting)

    by hansraj (458504) * on Saturday May 24, 2008 @04:08PM (#23530734)
    that all the problems these days can be solved either by litigating or by making laws enabling the government to collect more and more personal information.

    This panacea coming to the country near you soon.. stay tuned!
    • by westbake (1275576) on Saturday May 24, 2008 @04:33PM (#23530992) Homepage

      Those of you who think you can make a buck off a police state would do well to remember learn the fate of Fritz Thyssen [wikipedia.org]. He was an industrialist and early supporter of Adolf Hitler, in part financed by Prescott Bush [prlog.org]. He made plenty of money re arming Germany and he approved of racial purity laws. By the time he realized the Nazis believed all of the crazy things they said, it was too late for him to do anything about it. He was thrown into a concentration camp and was lucky to survive the wars he did not approve of. If you don't think the Neocons are just as crazy as the Nazis you have not been listening to them long enough [stallman.org].

    • by mpe (36238)
      that all the problems these days can be solved either by litigating or by making laws enabling the government to collect more and more personal information.

      This being something which fools believe, though increasing taxation appears to go along with this. Probably to pay for all the increased paperwork and spying.
  • Solves *A* problem (Score:4, Insightful)

    by zippthorne (748122) on Saturday May 24, 2008 @04:09PM (#23530740) Journal
    But it doesn't solve the kind of problem that makes a "foreclosure assistance bill" seem like a good idea.

    What they should do is pass a bill that requires new loans to be made under the following term:

    For collateral backed loans, turning over the collateral relieves the debtor's obligation.

    That forces the banks to assume the risk of risky loans instead of the borrower. Which is right and proper because they'll have a better understanding of what those risks are, anyway. Of course, they'll have to charge more for their money, and that will mean that some people won't be able to buy the house they want (and housing prices will drop somewhat to accommodate *some* of those people), but those are the people that would have found themselves homeless with thousands of dollars of debt after a pretty-likely future foreclosure, anyway.
    • by znu (31198) <znu.public@gmail.com> on Saturday May 24, 2008 @04:22PM (#23530870)
      How would that ever work? The bank would effectively be assuming all risk for a decline in property values, but wouldn't share in any upside.
      • Yes, but knowing it going in, they can price the loans accordingly.

        The problem is that their customers (borrowers) are buying business-grade money, but they aren't thinking like businesses about the risk, so they are *far* less prepared for a decline in property values coinciding with a drop in income or increase in interest rates.
        • by znu (31198) <znu.public@gmail.com> on Saturday May 24, 2008 @05:20PM (#23531296)
          In order for it to make sense for a bank to assume the same level of risk that would be involved in a direct real estate investment, it would have to charge an interest rate so high that it stood to make at least as much money as it would make from a direct real estate investment. (A "direct real estate investment" here meaning the bank just buying the property in its own name, and probably renting it out while waiting for it to appreciate in value.)

          Charging interest rates that high wouldn't just put home ownership out of the reach of a huge fraction of buyers, it would also remove a major incentive for home ownership. You'd be paying interest rates so high that they would, on average, offset any appreciation in the value of your property.

          There would be virtually no takers for such loans. As a result, housing prices would probably drop significantly (there would be much less demand), but you'd basically have to pay for a house with cash up front. Financial institutions and those few individuals with hundreds of thousands of dollars or more in liquid assets would end up snapping up all the property at severely reduced rates, and everyone else would simply have to rent, ultimately resulting in a massive ongoing wealth transfer away from the middle class.

          Oops.
          • You fail to realize that homeowners can get away with giving up their house to the bank anyway--they only have to declare bankruptcy, and all that does is ruin their credit without helping the bank out in any material way. The current program only works if the homeowner has actually bought a second home or other substantial assets they can be forced to sell to relieve their debt obligation. These people are in the vast minority, anyway, and are not the cause of the credit crisis.

            The credit crisis was caus
            • Small nitpick: it has nothing to do with ARMs. ARMs are *usually* cheaper than FRMs, even in the long run. The problem was with balloon rates, teaser rates, and other tools that make the loan cheaper upfront than it would otherwise be. That can be done with FRMs, too, in the form of buydowns. The bank gives you this nice low rate for two or three years, and you have so much money that you can buy your nice SUV, HDTV, etc., and then OOPS it resets to prime+7 (which means the LOWEST possible interest rate
              • Thank you for clarifying that, I only know what I read in the newspapers, which rarely go into depth on these kinds of things.

                I probably ought to start reading the WSJ.
          • by wfberg (24378)
            American mortgages already are, for the most part, non-recourse loans. That means, if you mail the keys to the bank, your debt is settled. The phenomenon is known as 'jingle mail'. Only home line of equity loans and refinancing loans tend to be recourse loans. 'Walking away' does wreck your credit score, but that's not much of an issue for people who never had a great score to begin with - i.e. subprime lendees.

            Even though the majority of mortgages is non-recourse, that didn't put the risk on the banks, as
    • by Hankapobe (1290722) on Saturday May 24, 2008 @04:28PM (#23530930)
      That plan would put owning a house out millions of people's reach, I'm afraid.

      I volunteer helping some of those folks that were "victimized" by the "evil" mortgage industry. In every case, folks just bought too much house than they can afford. And a few times, they bought a few houses. Folks don't leave any wiggle room in their budget - at all. So if they lose a job, or they get sick, or a divorce, or any combination thereof, they get behind in their payments. There's nothing in their budget for savings.

      A lot of those folks bought a house with one of those interest only loans counting on the house price increasing dramatically in the first couple of years, sell it for a huge profit, and buy more. Folks pyramided their profits with the expectation that home prices can go only up. The mortgage industry went long because these folks were able to make the payments. now, the economy slows, folks lose their jobs, and now they can't make their payments - bankruptcy and this current crisis.

      Here's the real problem: in America we have this budget by payments mentality. In other words, we can afford something as long as we can make the payments and of course that's counting on having a job that gives raises every year and asset prices always increasing. Some folks actually lied on their applications - FYI.

      There's no evil entity here to blame and there are no victims: just some folks who don't know how to mange their money and were too optimistic about the economy and the real estate market.

      • Indeed. But if the loans were priced properly, they wouldn't have been able to borrow themselves into so much trouble. The problem is that, although many people got greedy and willfully ignorant about the housing market, they're now stuck with huge remaining debts and no assets to cover them. Plus, they still have to find and pay for some kind of housing, so it's not like they can just keep paying the current premium.

        I'm not saying there are bad guys that need to be punished. In fact, it's a case of "to
        • When banks collateralized their mortgages into Asset Backed Securities, they usually lost the paperwork. And if they don't have a document trail proving that they own the house, they can't collect on Foreclosure Day.

          Who Owns Your Home? [kuro5hin.org] has all the links.
        • In fact, it's a case of "too-good" guys in some ways. But the situation needs to be resolved in a way that makes it harder to happen again and bailouts is not going to do that.

          No doubt. Lenders have been caught in a Catch-22-esque trap here. They chose not to lend money to people with poor credit ratings and insufficient assets, because those people probably wouldn't be able to pay off their debt. All based on actuarial calculations. But since minorities tended to fall into the "do not lend to" category more frequently, this was viewed as racist.

          So they (subsidized by the Government and pressured by public opinion) started lending to bad risks. And then those people w

      • It's also the responsibility of lenders to take your finances and such into account, and to consider the risk. If someone has a high-paying job in a volatile industry, the bank would probably charge a higher APR and give him the option to pay down principle early if he wanted. If someone had a stable job and could afford exactly $350 in payments a month, a dumb move would be to set up a plan where he'd pay that amount. Then, if prices of other needs rise even slightly due to inflation, he can't make his
      • by xenocide2 (231786)
        This flipping crap is why I'm not enthusiastic about assisting those in foreclosure. In 2006 Los Vegas, for example, where prices were screaming upwards and the whole place was growing incredibly fast, something like 1 in 4 loans was interest only. That screams classic bubble and I think we need to make it clear that bad investing should not be rewarded.
      • There's no evil entity here to blame and there are no victims: just some folks who don't know how to mange their money and were too optimistic about the economy and the real estate market.

        That is exactly right. I grow weary of hearing our politicians and activists bemoan the problems of "predatory lenders" and the plights of their "victims". Have they not heard the saying, "If you think that education is expensive then try ignorance"? People want to live in this world as adults and be treated as adults, but they want the government and their fellow taxpayers to bail them out of risky financial transactions, which they willingly engaged in, when their debts get called in. Those of us who are

    • If a debtor defaults on a mortgage, they surrender the collateral (the house.)

      Your proposal is already in effect, and has been for almost a century.
      • And after the bank sells the house, the debtor still owes the remainder if there is any (and in a declining market, the remainder will be substantial. In a rising market, a rational debtor would sell the house before foreclosure rears it's ugly head).

        There are some remedies for the debtor in this case, but they are all unpleasant to the debtor, and the recent spate of bank failures indicates that the banks themselves weren't prepared (i.e. they were not charging the correct fees to compensate the risk and/
        • That simply isn't true in most states. It's called a "nonrecourse loan".

          California, for instance, mandates nonrecourse loans for all primary mortgages.
    • Re: (Score:2, Interesting)

      by alexander_686 (957440)
      Oddly enough, you can do that already. Itâ(TM)s called a non-recourse loan. If you want one all you have to do is go down to your bank and ask for it. Corporations do it all the time. The reason why you donâ(TM)t hear about these loans is that the interest rates are higher and the down payment requirements are larger. It makes no sense for the average person it do. And let us just remember two things. First â" countries that have strong laws protecting the borrow tend to have higher i
  • My suspicion (Score:3, Interesting)

    by CyprusBlue113 (1294000) on Saturday May 24, 2008 @04:11PM (#23530762)
    This just looks like a subtle way to destroy Prosper.com
  • This is something that the NASD has been doing for years for people with securities licenses. This isn't something new. However, I don't really see the benefit of doing it. Maybe they are cross referenced with some law enforcement databases.
  • I'm a lender on Lending Club and I've got money that's not going to come back to me for another 3 years. Anyone got a guess about whether or not it will affect me?
    • by nhtshot (198470)
      Ask a lawyer, not slashdot.
      • by 77Punker (673758)
        Sometimes questions can provoke interesting discussion, which is the reason I come to Slashdot.

        I'm not here for legal advice; I'm here to get a variety of perspectives.
    • by vidarh (309115)
      I am assuming the lenders did not sign a load agreement directly with you, but with Lending Club, in which case I'd be very surprised if it affected you. I'm not in the US, and not familiar with Lending Club, but I have used Zopa in the UK, and I've never been party to a loan agreement - the load agreement has been between Zopa and the lender. I've just provided capital to Zopa.
  • I wonder what this would do for sites like prosper.com?
  • by PingXao (153057) on Saturday May 24, 2008 @04:26PM (#23530906)
    Take DNA samples, too. Add cameras EVERYWHERE. Why pretend that isn't the goal, or that the majority of people are against it? One day, it might help the children by catching ch1ld pr0n predatr0s. Or catch that mafia guy down at the loan store who talked me into that loan I can't afford. Or the creep that sold me that gas guzzler last year.

    Here's something I would really like to see: Drug tests for every elected office holder, every day. Make the results public as soon as they're available. No exceptions. Another would be to implement transparency on all elected office holders' bank accounts. Let the sun shine in.
    • by mpe (36238)
      Here's something I would really like to see: Drug tests for every elected office holder, every day. Make the results public as soon as they're available.

      Which drugs would the tests be for? If the tests were for everything currently illegal there might be a long wait for all of the results...
      • All of them. Blood, urine and hair tests. Alcohol, Viagra, nicotene, marijuana, *caine, caffeine, oxycontin, all of them. At such frequency that there's less than a 1% chance they can smoke a joint, do a line, or pop a pill and turn up clean on any given test. Maybe do like they do to the armed forces, and just randomly select a small subset to test every week, and make sure somebody actually sees that all collected bodily fluids *actually* come out of their body. (Note: not volunteering for that one)

        It
  • by GISGEOLOGYGEEK (708023) on Saturday May 24, 2008 @04:40PM (#23531032)
    Yes, Americans run out and throw away your privacy as fast as you can without thinking about it! The mortgage crisis was caused by a lack of fingerprints? Right!

    You should have done what Canada and many other countries did DECADES ago to protect your citizens from the banks, protect your banks from your citizens, and to ensure the market could not be manipulated into such a crisis .... enact regulations that require a loan company to ensure:

    - that mortgage applicants actually have the income needed to support paying back the mortgage! DUHHH!
    - that a large enough down payment is made that if a small drop in the home's value happens, it won't eliminate the collateral the mortgage was secured on. (currently minimum 5% downpayment)
    - that if a downpayment is not significant (under 25%), the mortgage applicant must have mortgage insurance.

    Too many Americans still ignorantly believe that the mortgage crisis was accidental!

    It was entirely predictable and preventable. It was entirely based on the greed of your unregulated banks!

    Your housing market had prices that were rising so fast ... driven by easily obtained mortgages ... that your banks could make a killing by intentionally handing out mortgages to people who couldn't make the payments, forclosing on the mortgages and reselling the houses at a higher price to the next sucker!

    I spoke to a young up-and-coming American mortgage broker recently who was not just entirely blind to the damage his industry had caused to the American (and world) economy for a short term again, he was dumbstruck with adoration and respect for the professors of American business schools that had come up with the idea and was going to attend a conference hosted by them soon after! He referred to his favourite mortgage applicants as NINJA's ... No Income, No Job Applicants!!!

    Once the market turned, and prices stopped increasing, the mortgage pyrimid scam became unprofitable. Suddenly your banks couldn't resell all their stolen houses, suddenly your banks were stuck with huge amounts of debt that they couldnt carry.

    But instead of stopping and minimizing the losses, and preventing the ruin of the American economy, they kept going! They intentionally carried the scam so far that not only could they not be punished for it lest it destroy your banking system, you as taxpayers were forced to bail them out for your own protection!

    So you got scammed into mortages you couldnt afford, got your houses stolen back by the scammer, and are now paying off the debts through your taxes! It's the great American way! Life, Liberty, and the pursuit of being a victim of fraud perpetrated by other Americans!

    So go out and submit those fingerprints. It will solve EVERYTHING!
    • - that mortgage applicants actually have the income needed to support paying back the mortgage! DUHHH!


      A friend of mine is a mortgage broker and explained the problem. The Feds demanded the mortgage industry provide more loans to minorities. All too often, minorities applying for loans did not have sufficient income to qualify. If they turned them down, AS THEY SHOULD HAVE, they would have been accused of discrimination. This whole mortgage crises was created by the Feds forcing the industry to give loans to people who had no chance of paying them back.

      A secondary problem was idiots rolling over interest-only loans, hoping the market would keep going up. Interest-only loans aren't much different from gambling.
      • by Varitek (210013)

        A friend of mine is a mortgage broker and explained the problem. The Feds demanded the mortgage industry provide more loans to minorities. All too often, minorities applying for loans did not have sufficient income to qualify. If they turned them down, AS THEY SHOULD HAVE, they would have been accused of discrimination. This whole mortgage crises was created by the Feds forcing the industry to give loans to people who had no chance of paying them back.

        Horsecrap. The mortgage issuers were packaging up mort

      • by fermion (181285) on Saturday May 24, 2008 @05:57PM (#23531538) Homepage Journal
        This is the excuse that the mortgage industry uses. It is why friends of mine, with six figure incomes, could not secure housing until they went to their proper part of town. It is why lawsuits were filed against financial officers at auto dealers for engaging in a pattern of offering loans at higher rates than equally qualified person who were of a more desirable color. The excuse still works, but is getting old given the median income in all racial groups is enough to own at least a modest home.

        In any case, I don't think loaning to minorities is causing the current issues. For one thing, I don't think that so-called minorities are the primary people who speculated on property in florida, and other places, assuming that the price would go up by the time that development was finished and they could flip for a quick profit. Why banks would lend to such speculators, often with no obvious source of income, is beyond me. Furthermore, the NYT published a graphic on the largest foreclosures, and the cities are not those one associates with urban minority populations. Place like Merced, minneapolis, fort myers. Though these do have the minority population, and everyone has to take blame, the finance industry blaming it on government regulation is just weak.

        This is why. Many years ago, Texas has a good regulation. The regulation was based on the idea that a persons home was not a liquid asset, but a vital possession. As such, texas allowed a person a great deal of protection to keep the home. The taxes would be fixed after 65. Your home could not be easily foreclosed or taken in a bankruptcy. In many jurisdictions taxes are easily disputed so people would not lose their houses due to excessive taxes. In exchange for these protections, Texans did not have the right to home equity loans.

        That is until the financial industry bought out the Administration of George Bush and won his support to change the law. We now have a state of speculators instead of home owners. Prices went through the roof(tripled in 8 years) because the financial speculators wanted them to. Homeowner lost their house to due high taxes. Speculators moved in, borrowed against the house, and then moved out when they could not borrow leaving a blighted block. this was not due to government regulation forcing mortgage companies to loan to minorities. This was a calculated attack on the home owner back bone of america.

        The sad thing is that the financial industry has made it bag of gold, and now is crying foul. Many of the mortgage holders are walking away, which they should, and the financial industry doesn't like it. Instead of renegotiating loans, they are begging the government for a bailout. It is sad. Those of us with eyes saw what was happening all those years ago, but all anyone else could see is free money. Now, as always, they are blaming it on regulation and minorities. The fact that the mortgage brokers were greedy bastards had nothing to do with it.

        • by ShakaUVM (157947)
          The problem wasn't increasing loans to minorities, per se, but increasing loans to people classified as sub-prime (of which there is some correlation with minorities).

          It was one of Clinton's last gifts to us that his administration began pressuring banks to issue sub-prime loans.

          Of course, it isn't politically correct to criticize political correctness, so it's all blamed on the banks.
      • by scbomber (463069) on Saturday May 24, 2008 @07:30PM (#23532210)
        OK, you're (or your friend's) fundamentally confused.

        1) Most of the people defaulting on loans are not, in fact, minorities.

        2) All the anti-discrimination provisions of federal housing law are public. Try http://www.ftc.gov/bcp/edu/pubs/consumer/homes/rea08.shtm [ftc.gov] for a start. None of it has anything in it about lowering standards, only prohibiting discrimination.

        3) People can accuse of discrimination all they want; if they can't prove it who cares? There's no way defending those cases would be as expensive to mortgage companies as having the loans blow up.

        So, sorry, but this problem cannot be blamed on the economic actors in the situation who had the LEAST control over what was happening. Aim Higher!
      • BULLSHIT.

        Are you really so gullible as to believe those lies? And you have no clue if you think 'interest-only' loans were the worst of it. Some mortgage lenders were giving out mortgages where your principle increased each month ... supposedly not as fast as the market value of your home increased, cuz markets never change direction right?

        And I havent even touched upon the misleading deals where interest rates ramped up over time far beyond following the prime rate.
      • The feds didn't demand anything, this is complete BS. This crisis is just the result of the financial system lobbying for and obtaining the relaxing of regulations.
        Said regulations were enacted initially as a result of the 1929 crisis; when they got turned off, well, no surprise, what was supposed to happen, happened.
    • "Yes, Americans run out and throw away your privacy as fast as you can without thinking about it! The mortgage crisis was caused by a lack of fingerprints? Right!"

      There's no doubt about it...

      Thats what that old army post was for...

      all the best,

      drew
    • Umm, in America you normally have mortgage insurance unless you put 20% down.
      • by Forbman (794277)
        or a double mortgage... 80% is main mortgage, and the rest covered by a 2nd, all to avoid paying a little bit of PMI. The interest on the 2nd is gonna be a couple percentage points higher, at least, compared to the primary mortgage...

        Stepping over a dollar to pick up a dime...
    • >>Too many Americans still ignorantly believe that the mortgage crisis was accidental!

      No way.

      The mortgage crisis was entirely caused by the fact that our loan operators didn't have fingerprints taken, and so when they skipped out of town, there was no way for the lendees to track them down to pay them back.

      This bill will finally solve the problem of deatbeat lenders who don't want to get paid back.

      Amen!
    • - that mortgage applicants actually have the income needed to support paying back the mortgage! DUHHH! - that a large enough down payment is made that if a small drop in the home's value happens, it won't eliminate the collateral the mortgage was secured on. (currently minimum 5% downpayment) - that if a downpayment is not significant (under 25%), the mortgage applicant must have mortgage insurance.

      On point one, mortgage companies want to do this-- most do. There is an impression out there that banks want

    • by Abcd1234 (188840)
      "that a large enough down payment is made that if a small drop in the home's value happens, it won't eliminate the collateral the mortgage was secured on. (currently minimum 5% downpayment)"

      Uhh, what? 0% down loans are easily available in Canada, and have been for some time now. Or perhaps you just live in a different Canada than I do?
  • Fingerprint the CEOs and anyone with the final approval to accept or decline a lone, and leave everyone else alone.

    If your bank uses an automated approval process, then designate some human being to sign off on the rules the automated process uses, and fingerprint him.

    Even better, skip the bureaucracy and don't fingerprint people, just hold the companies responsible if they don't do due diligence on their hiring.

    Geesh, this is banking, not munitions transport.
  • double edged sword (Score:3, Interesting)

    by owlnation (858981) on Saturday May 24, 2008 @05:09PM (#23531236)
    Hmmm, there's a few aspects to this...

    1. Does it prevent loan fraud -- nope, of course not. Surely no-one with even passing insight into the issue would think otherwise.
    2. It does, however, cause banks some hassle. And, aside from the legal profession, there are fewer institutions on Earth that deserve hassle more than bankers (which rhymes with .....?)
    3. The downside of that though is that you can bet the associated charges (real or imagined by banks) will be passed on to the consumer.
    4. It will further desensitize Joe Sixpack into thinking, "well, maybe fingerprinting people for ......(insert any profession you like here) is ok after all, I mean bankers have to do it"
  • I for one... (Score:3, Interesting)

    by fuzzyfuzzyfungus (1223518) on Saturday May 24, 2008 @06:25PM (#23531754) Journal
    Am glad to have this valuable reminder that fraud is something that little people do. Seriously, does anybody actually believe that the architects of our current lending debacle are a bunch of two-bit conmen running around with cheap suits and suitcases full of fake IDs?
  • I work for a large financial services firm. Everyone who comes to work there is required to undergo a background check and criminal records check, which includes fingerprinting (and running those fingerprints for matches in criminal and disciplinary databases). The goal with the SEC is, at least partly, to ensure that someone who has been convicted of securities fraud cannot sneak in after suspension of their license, etc.

    Note, I'm not a licenses broker or any such thing - I'm in IT. But the rules apply.

  • Big Deal (Score:3, Insightful)

    by Kostya (1146) on Saturday May 24, 2008 @08:49PM (#23532732) Homepage Journal
    Work for any financial firm (and if you write software for in a big city, odds are you are or have worked for a financial firm at one time) you have to get fingerprinted. No one throws a stink about that. After this ridiculous mortgage crisis, is it any surprise they extended it to include lenders?

    Maybe I'm just used to it, so I don't see the big deal. But I think I have been fingerprinted at least 4 times over the past 10 years in order to work for financial firms.

    Meh. Perhaps it is something to get worked up over. But it isn't really a new thing--perhaps it is to many here? This practice, or something like it, has been in place for years in the greater financial market.
  • Microsoft IE tactics (Score:2, Informative)

    by turthalion (891782)
    This smacks of the same tactics Microsoft used to force IE on everyone. When they were ordered to un-bundle IE from the OS, they responded by doing so, but then making IE a requirement for everything... want to use Platform Builder? You need IE. Want to use Visual Studio? You need IE. Want to play Al Unser Jr Racing, and read the Help? You need IE.

    This sounds like the establishment wanting the FBI to have fingerprints on everybody (you're all potential criminals, after all), but knowing it will never
  • I work for a loan servicing company that is owned by one of the major NY brokerage/investment banks. As such, part of working for an SEC-regulated company means getting an official fingerprint card made with your fingerprints on it, per SEC regulations...

    So, is the SEC regulating mortgage originators? Hmm... might as well, as mortgages are still being packaged up into financial securities...
  • It appears the US has taken a page out of the UK 1984 manual. In the UK, ID cards would "not be compulsory", but nothing will work without.

    I think those who propose this stuff should get the same treatment as meted out to the German Minister of Justice by the Chaos Computer Club.

    There IS a use for biometrics, but it's not by storing it in a large data bank.
  • They want your DNA to prevent - errr - INCOME FRAUD!

    Really. We're PAST the level already of spying on your citizens that the East-German Stazi had reached.
  • How about fingerprinting lobyists so we see who's REALLY behind crackpot laws that get pushed through our respective governments.
  • by Anonymous Coward
    Interestingly enough, California already does this. When I got my real estate license 5 years ago I was required to submit LiveScan fingerprints to them. And last year when I began working for a government contractor I initially was declined a security clearance because my fingerprints came up in a DOJ database. Had to argue with them to stop and actually look at WHY the fingerprints were in there to begin with. They just assumed that because my fingerprints were on file with the DOJ it was due to som

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