Justice Department says every large bank involved in the secondary market sales to Fannie and Freddie committed fraud

Appraisal fraud and Liar Loans

So the first two are in the mortgage origination phase, and that is what I’ve described in the past: the epidemic of appraisal fraud, led by lenders, and the epidemic of liars’ loans, also led by lenders and their agents. And that generated literally millions of fraudulent mortgages originated each year, most of which they sold to the secondary market. And since there’s no fraud exorcist they had to, of course, engage in fraud in the representations and warranties–what we call reps and warranties for short–in the sale of these fraudulent mortgages through a further fraudulent representation to the secondary market.