There's plenty more of the same in the complaint by MGIC charging that Countrywide agents were complicit in various and sundry deceptions. Frankly, we found it all something of a hoot, though it's not hard to see why MGIC isn't laughing. Read more on Barron's.
The MGIC issue with Countrywide like the First American Title issue with Countrywide loans now being held by Bank of America is a real hindsight wanna change reality play.
During this entire mortgage fraud rampage we continually had to stand our ground to prevent fraud or at the very least to turn away business by refusing to participate. Nobody wanted to hear about it, period. Whistleblowers were ignored and quality control results were ignored or the programs made incapable of doing the job they were intended to do.
Remember, Fannie Mae, Freddie Mac, and the FHA and VA all required diligent quality control programs that were supposed to audit ten percent of the pipeline. I have been involved in the these programs and when run correctly they find systemic and isolated fraud very effectively.
What happened is that the industry decided to party down and not care about the consequences. I have no doubt - NO doubt - that Countrywide and the insurers crying foul had plenty of employees at street level and in management who knew what was going on and either actively participated or simply chose to ignore it.
Sure. Bet you can pull a box of files from that time and find some kind of fraud in just about every box. It was a culture of lies. It was very hard for the good guys to make a living staying clean but we did. Standing against reverse peer pressure may have been what these insurance companies wish they HAD done.
So, perhaps arbitrators or judges will decide which of the active or passive participants in fraud was the worst and punish one or the other. I will find the results interesting and either way, not disturbing. Afterall, lots and lots of good guys lost everything in and after the bubble because of the lying bastards of fraud. Doesn't bother me a bit that some bad guys have a bad day or two or three.