
When Abacus Bank Was Accused of Fraud - bentoner
http://www.newyorker.com/magazine/2015/10/12/the-accused-jiayang-fan
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fnordfnordfnord
>Cyrus R. Vance, Jr.

This guy is a real piece of work. Look for extra context when you see his
name. He was the DA in the Aleynikov case as well.

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gatsby
Fascinating that despite years of "inflating or exaggerating [borrower]
assets, incomes, and job titles” this bank maintained a delinquency rate less
than a twentieth of the national average. In 2009, they had 4,399 mortgages
and only 16 were in trouble.

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patio11
In part it's because they were inflating/exaggerating _legally recognized_
incomes (which were being systematically understated for the purpose of tax
evasion), in a fashion which corrects the number towards a borrower's actual
ability to repay the loan.

Part of me wonders whether in addition to the cultural factors counseling loan
repayment whether some buyers did not have an actual, and possibly reasonable,
fear of the bank taking extrajudicial measures to collect on debts. (i.e. "If
you don't pay, we send thugs to beat up your family.") This is suggested as a
standard enforcement mechanism for _hui_ , which were known to be a common
funding practice for the bank's borrowers, and those borrowers might naturally
assume that the big, well-connected bank had levers stronger than sending a
strongly worded letter in the event of default.

One imagines that the yakuza have a better repayment rate than borrower
profiles would suggest, too, but that isn't primarily a consequence of their
fluffy-bunny-community-involvement.

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FireBeyond
Previous discussion:
[https://news.ycombinator.com/item?id=9955507](https://news.ycombinator.com/item?id=9955507)

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abhv
I didnt understand why the two protagonists, Jie Chen and Ariel Chi, lost
their down payment because the bank withdrew the loan offer _at the closing_

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reverend_gonzo
Once you give them your down payment, you go into attorney review, at which
point each side review details of the contract. Usually, during this time,
you'll write into the contract that the buyer has 30 days to acquire financing
(or some number like that). At this point, the buyer places the down payment
(or a percentage of it) into escrow as a good faith payment. If the buyer is
unable to acquire financing by the date, the sale is cancelled with the down
payment being returned.

However, once financing is guaranteed by the bank, both sides agree that they
are going through with the sale, and any reason to cancel now means the buyer
would lose his down payment.

In this case, the bank pulled funding at closing because they realized that
documents were provided fraudulently. Hence, lost down payment.

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stordoff
Autoplaying video ad that overlays the content isn't a great first impression
for any website.

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jlarocco
Are there still people who don't know about ad-block?

