It's much easier to prosecute money laundering than it is to prosecute stupidity. Some people did illegal stuff way back then and got totally destroyed (see what we did to the mortgage brokers). That didn't extend to the vast majority of people though because they were just stupid, not criminal.
Additionally, the government itself was a large player in pushing the mortgage crisis. From keeping interest rates low, to encouraging lenders to get loans for those who couldn't afford them, to the implied bailouts (which turned out to be true) that only encouraged reckless behavior. If they look too hard they'll have to look in the mirror and that will never happen.
Unfortunately much of the things which were happening leading up to 2008 were not illegal, which is why there haven't been many prosecutions. Doing shady things and passing the buck, moving risk to other parties? Yes, but unfortunately not against the law.
Indeed. If we criminalized being shady most business owners in the continental US would be behind bars. Selling overpriced phones? Apple. Selling overpriced junk food? McDonalds. Selling overpriced headphones? Beats. Selling overpriced housing loans? Banks. Selling overpriced jeans? Levis. Selling overpriced smelly water? Perfume companies. Selling overpriced hydrocarbons? Deodorant companies. Overpriced sugar water? Coca cola. The list goes on and on and on.
The system we live in is designed around rewarding people who can extract capital from others. That means everyone's fucking over everyone and only the most clearly fraudulent transactions are regulated away to minimize externalities.
Is it optimal? No. But that's the reality of the system we live in.
> Yet when he and his staff would meet with Breuer and other top DOJ officials, those officials would proudly tout the small mortgage brokers they were pursuing, in response to which Kaufman and his staff said: “No. Don’t show me small-time mortgage guys in California. This is totally about what went on in Wall Street … We are talking about investigating senior level Wall Street executives, even at the Board level.”
> “Mortgage fraud ruins lives, destroys families, and devastates whole communities,” Attorney General Eric Holder said this morning at a press conference to announce the results of “Operation Stolen Dreams.” Launched on March 1, 2010, the multi-agency initiative has led to a total of 485 arrests. More than 330 convictions have been obtained, and nearly $11 million has been recovered. Losses from a variety of fraud schemes are estimated to exceed $2 billion.
Those just seem to be for run of the mill fraud - nothing to do with mortgage brokers.
"In Miami yesterday, two people were arrested for targeting the Haitian-American community, claiming they would assist them with immigration and housing issues. Instead, they used victims’ personal information to produce false documents to obtain mortgage loans."
"In California, a prominent home builder used straw buyers to sell his houses at inflated prices. The scheme inflated prices on other homes in the area, creating artificially high comparable sales and affecting the overall new-home market."
"And in Detroit yesterday, FBI agents arrested several individuals in a $130 million scheme orchestrated by the local chapter of a motorcycle gang. The conspirators posed as mortgage brokers, appraisers, real estate agents, and title agents and used straw buyers to obtain around 500 mortgages on only 180 properties."
None of these people seem to be mortgage brokers, though some pretended to be.
