Trusting to Fraud for a Solution to Fraud
Vital Part of Housing Bill Is Brainchild of Banks Mortgage Aid Under 'Credit Suisse Plan' Would Benefit Lenders
By Jeffrey H. Birnbaum Washington Post Staff Writer Wednesday, June 25, 2008; D01
A key provision of the housing bill now awaiting action in the Senate -- and widely touted as offering a lifeline to distressed homeowners -- was initially suggested to Congress by lobbyists for major banks facing their own huge losses from the subprime mortgage crisis, according to congressional staff members and bank officials.
Credit Suisse, a large investment bank heavily invested in mortgage-backed securities, proposed allowing hundreds of thousands of homeowners to refinance their mortgages with lower-cost government-insured loans, relieving financial institutions of the troubled debt.
Hundreds of thousands of homeowners are, of course in reality, hundreds of thousands of non-performing loans presently (and inconveniently) on Credit Suisse's books.
For some still-unknown reason, fraudulent a…