The Legal Mortgage Scam Unveiled

The Mortgage Scam That Looked Legal Banks discovered the ultimate loophole before the housing

crash. They could approve mortgages without checking if borrowers could actually pay

them back. And it was completely legal. Here’s how it worked. Laws allowed lenders

to skip income verification as long as borrowers signed a form claiming their numbers were accurate.

So banks stopped checking. Borrower said they earned more? The lender wrote

it down. No questions asked. Mortgage brokers got paid per loan closed,

not per loan quality. More approvals meant more money, whether people could repay or not.

Then came the next step. Banks immediately sold these risky loans to bigger