Bill Black: The Lessons Richard Bowen's FCIC Testimony Should Have Taught the Nation

``FCIC neglects the key fact in Bowen's testimony -- Citi was making endemically fraudulent "reps and warranties" that the $50 billion of loans it was selling overwhelmingly to Fannie and Freddie complied with Citi's "loan guidelines" when in fact the majority of those loans did not comply.  The reasons that the loans did not comply meant that they had a far higher risk of default, and loss upon default, than loans that met Citi's loan guidelines.  At the 60% figure for the incidence of fraud, that meant that Citi was annually selling $30 billion in toxic mortgages to Fannie and Freddie through fraudulent reps and warranties.  That's called "fraud."''