(CBS News) Two whistleblowers offer a rare window into the root causes of the subprime mortgage meltdown. Eileen Foster, a former senior executive at Countrywide Financial, and Richard Bowen, a former vice president at Citigroup, tell Steve Kroft the companies ignored their repeated warnings about defective, even fraudulent mortgages. The result, experts say, was a cascading wave of mortgage defaults for which virtually no high-ranking Wall Street executives have been prosecuted.
Like the healthcare and pharmaceutical industries, the financial industry preys on US taxpayers because their regulators are appointed by politicians, who accept payment from corporate lobbyists, who are funded by the industries regulated – the industry owns their regulators and prosecutors. Laws like Sarbanes-Oxley mean nothing if politicians dissuade prosecutors from charging criminal executives.
The back story features fraud investigator Tom Borgers, who describes the difference between the current investigations and those that sent S & L conspirators to prison during the 1980s.