The FBI, in conjunction with the Securities and Exchange Commission on corporate-fraud, is investigating 14 companies to determine criminal conduct that contributed to the subprime mortgage crisis.

The Feds are worried about irregularities that include the timing of stock sales by executives at companies like the bankrupt New Century Financial Corporation. They're also looking at whether publicly-held homebuilders manipulated financial statements to inflate revenues. And they're looking at whether Wall Street hid information about the degree of high risk loans that were bundled into mortgage-backed securities and sold to investors.

Well, you can't say the grass grows under their feet, even though Realty Times was raising the alarm way back in 2004 that something was seriously wrong with housing. The fever pitch of homebuying propelled by high-risk loans.

The states noticed something was wrong. Attorney Generals for Connecticut and New York have issued subpoenas to Fannie Mae and Freddie Mac over how home loans were handled, including appraisals.

Which brings us to the question: where are the federal probes into all banks that contributed to this mess?

Curiously absent from the search for the guilty is the U.S. Treasury that oversees banks.

Why? It wasn't just subprime loans that caused the mortgage meltdown. Some say inflated appraisals were encouraged by banks which helped drive home prices up to record levels. That contributed as much to the record level of loan defaults as the nature of the loans, so why aren't all banks being investigated for mortgage fraud?

One appraiser who tried to take on Wells Fargo thinks he knows why; the Feds will do anything but go after employers.

During 2006 and 2007, Texas appraiser Gary Geraci says he worked with the SEC, IRS, and FBI by providing them with facts about lender pressure to hit appraisal numbers and bank fraud. Under the Sarbanes-Oxley whistleblower statutes, Geraci filed suit against Wells Fargo.

On his blog, he writes, "Sworn to a code of ethics in both appraisal and engineering, I continue to uphold certain civil and social responsibilities to the public I serve. Fighting appraisal fraud on a daily basis for two years was not enough and ultimately resulted in blacklisting and the decline of my appraisal business. Rather than simply go away, I made the conscious choice to take the heat up a notch and file a federal whistleblower lawsuit. I was forced to do so alone as no attorney would take my case. To go up solo against the high paid attorneys of one of this country’s top banks was demoralizing, and yes, rife with corruption in itself. The pursuing year-long court battle was clearly the most difficult challenge I had ever taken on to date. I witnessed firsthand a patronizing court and a legal system noticeably tilted to the benefit of this country’s employers."

"I am no longer an appraiser but looking at today’s mortgage meltdown crisis -- I am at peace in that I did my part," says Geraci.

All this makes the $150 billion economic stimulus package just approved by the House of Representatives a little suspect. They're putting the bandaid on the wrong wound.

Instead of cleaning up banks and their lending practices, which would immediately help consumers, the package raises loan limits for loans sold to Fannie Mae and Freddie Mac so consumers can borrow more money from banks guaranteed by government sponsored enterprises that are also under investigation.

Frankly, they all deserve a kick in the pants.

Published: January 31, 2008

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.