Foreclosures and Greed

|Foreclosures and Greed |

|Gregory Reed |

|10/22/11 |

|ACC 538 - Law and the Accountant |

|Prof. Terrry Driskill |

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Introduction

In 2002 the economy of the United States was booming. The country had financially recovered from the terrorist attacks of 9-11 and the passing of the Sarbanes-Oxley Act of 2002 restored investor confidence in the stock markets. Banks and investment firms were looking for new ways to make money and the federal government was pressuring banks to lend money for the purchase of a new home to more and more minorities. Banks started lending money to people who could not pay the money back. This was achieved by creating unethical mortgages that allowed people lower down payments, but then would adjust with the interest rates. The amount of foreclosures that occurred, as a result of the shady lending practices, were unprecedented. To make matters worse the same banks that processed the bad mortgages were caught performing illegal foreclosures. These banks hired people to sign bogus names to foreclosure documents to speed along the process. The collapse of financial institutions that followed set off a chain reaction that America as yet to recover from. Since the Great Depression of 1929, no single event has had an impact on the American economy as...