Do you know if First Brand's actions are considered fraud? Or was this entirely on the lenders to make sure they were in the clear regarding the collateral? Doesn't excuse the lack of diligence, but curious if there was some assumption of good faith that may have played a role in what diligence was or was not done.
replyOnly a court can decide if the actions are fraud, but they sure look like it to me. Fraud doesn't excuse the lack of due diligence.
replyIf lenders are in fact not performing due diligence and passing off good credit as bad...sounds suspiciously like a 2008-like era where noone cared about the credit worthiness but just wanted to generate lines of credit.
replyOh boy, if this is the case, oh boy.
Lessons not learned indeed.
Once you get outside of things that are highly standardized (like home loans to individuals) you quickly find out that no matter how regulated, finance is done on a handshake.
replyThat's true, but only to a point. Due diligence is not uncommon, especially with more traditional forms of credit.
replyI resorted to the mortgage-lending analogy so others could quickly grok what multi-pledging means.