Since 2008 buyers of Citi mortgages have requested that Citi take back 17,500 poor mortgages or cover the buyers' losses.
"The evidence discloses troubling and sometimes abusive practices which show...that Goldman knowingly sold high risk, poor quality mortgage products to clients around the world," according to the Senate report.
(1) Treasury or Fannie Mae should offer to buy pools of these poor quality mortgages from financial institutions at discounts based upon the advice of its contractors.
After all, Warren said, until a new agency is created, banks are going to continue bullying families into poor loans, mortgages and credit cards.
The agency, which has a budget of almost $50 million, oversees public housing programs for the poor, guarantees mortgages through the Federal Housing Administration FHAand and has been working to desegregate cities across America under Barack Obama.
The company suffered billions of dollars in losses from investments in poor-quality mortgages.
Sometimes this is through bad faith, as when Bernie Madoff, a grand fund manager, allegedly made his investors $50 billion poorer, or mortgage-sellers tempted naive borrowers.
The fund said the investments had been backed by poor-quality mortgages written by the subprime lenders Countrywide Financial, First Franklin Financial and IndyMac Bancorp, a bank that failed in 2008.
When they did start falling, it turned out that the models became poor predictors of mortgage repayment.
With major real increases in the minimum wage, an expansion of the bolsa familia programme for the poor and a mortgage credit for home buyers of modest means, it won't be that easy to campaign against Dilma and the Workers' party on economic issues.
