Abacus Federal Savings Bank: Mortgage Fraud

Fannie Mae Dept: Abacus Federal Savings Bank was hit with mortgage fraud, grand larceny and other charges in what Manhattan District Attorney Cyrus R. Vance Jr. called "a systematic scheme to falsify and fabricate mortgage applications" so that unqualified borrowers could get loans. The loans later were sold to mortgage giant Fannie Mae, which repackaged them into securities for investors, according to Winnipeg Free Press. Vance said most of the mortgages in this case were actually being paid back, but the allegations reflect the lax lending that convulsed the economy in 2008 as borrowers defaulted and the effects rippled through a financial system that had transformed individual loans into mortgage-backed securities held by countless investors. The crisis spurred multibillion-dollar government bailouts of Fannie Mae, big banks and financial institutions and nEW YORK, N.Y. - A community bank and 19 ex-employees have been criminally charged with issuing hundreds of millions of dollars in fraudulent mortgages that ended up in unwitting investors' portfolios, prosecutors said Thursday in announcing a rare indictment against a bank in the mortgage meltdown that rocked the U.S. economy. Abacus, a Chinatown-based bank with mainly immigrant customers and branches in New Jersey and Pennsylvania, said it had investigated and reported the problems and would vigorously defend itself. (www.immigrantscanada.com). As reported in the news.