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Abacus: Small Enough to Jail

September 13th, 2017 Leave a comment Go to comments

During the 2008 financial crisis, it is well known that nobody went to jail because of it.  However, it is relatively unknown that only one bank did get charged for mortgage fraud.  Abacus Federal Savings Bank is a relatively small bank which has 6 branches in NY, PA and NJ, has uncovered improper behavior of one employee and was subsequently fired and reported the proper authorities.  However, in the coming months prosecutors increasingly ask questions about the incident which led to this.  Unlike the big banks where the cases settled out of court with a fine, Abacus was criminally charged.  It should also note that out of about 3000 mortgages sold to Fannie Mae during 2005-2010, only 9 of them defaulted, which is less than 1/10 of national average.  PBS Frontline has an excellent documentary about this ordeal.  Here’s an story about this.

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