Watch The Untouchables on PBS. See more from FRONTLINE.

In "The Untouchables," Frontline investigates why Wall Street's leaders have escaped prosecution for any fraud related to the sale of bad mortgages. Are Wall Street's big bankers untouchable?

Producer Martin Smith joined HuffPo Live on Tuesday to discuss his investigation into the lack of prosecution of Wall Street executives for any fraud related to the sale of bad mortgages:

Commenting on clips from the episode showing former home loan underwriters explaining how they would laugh as they pushed through mortgages that were too expensive for the borrowers, Smith said this type of behavior was "very frequent and common."

"There are lawsuits that name 35 -- easily 36, 37 -- of these kind of testimonies," Smith told HuffPost Live host Jacob Soboroff. "And these guys are joking about it at this point, but of course it's not really funny in the end because it all resulted in the collapse of 2008, a million people losing their houses, many people out of work and businesses seeing demand sink."

"It was like a party," one former loan underwriter tells Frontline's" Martin Smith. "We were getting through these loans as quick as we can. They were not being looked at like they should've been looked at."

A full transcript of the report is available here.

Bank of America's top executives neglected to tell their shareholders about the losses at Merrill Lynch before completing the $50 billion purchase of the company in 2008. Shareholders were instead told of projections showing the deal would make money, when in fact it resulted in losses that prompted the $20 billion taxpayer bailout.

The information was revealed through documents filed on Sunday night for a Bank of America shareholder lawsuit, which includes testimony from then-Chief Executive Kenneth Lewis, admitting that the documents filed with regulators and shareholders before the acquisition vote didn't include the loss estimates he had previously received. At the bank board's next meeting just days after the decision, they were given news that there had been a $14 billion before tax loss in the fourth quarter. The lawsuit will be heard in Federal District Court in Manhattan.

NYT:

Two business days after Bank of America shareholders approved the deal, the bank’s board met and received details of the $14 billion pretax fourth-quarter loss. The board also learned that the deal would be far more damaging to the bank’s earnings than had been publicly disclosed.

One bank executive attending that meeting was Timothy Mayopoulos, then Bank of America’s general counsel. In testimony noted in the court filing, Mr. Mayopoulos expressed surprise at the size of the loss, which he said he had not been told about. He testified that he tried to speak with Mr. Price about possibly disclosing the losses but that Mr. Price was not available.

The next day, the filing noted, Mr. Mayopoulos was “fired without explanation and immediately escorted from
the premises, without being given the opportunity to collect his personal belongings.”

And just a reminder...

Fannie Mae was repeatedly warned about mortgage and foreclosure fraud - years before their financial collapse - but did absolutely nothing to stop it.

Via:

Like most people, Nye Lavalle had little interest in the mortgage industry until things got personal. Raised in comfortable surroundings in Grosse Pointe, Mich., just outside Detroit, he began his business career in the 1970s, managing professional tennis players. In the 1980s, he ran SMG, a thriving consulting and research firm.

Then he tried to pay off a loan on a home his family had bought in Dallas in 1988. The balance was roughly $100,000, and the property was valued at about $175,000, Mr. Lavalle said. But when he combed through figures provided by his lender, Savings of America, he found substantial discrepancies in the accounting that had inflated his bill by $18,000. The loan servicer had repeatedly charged him late fees for payments he had made on time, as well as for unnecessary appraisals and force-placed hazard insurance, he said.

Mr. Lavalle refused to pay. The bank refused to bend. The balance rose as the bank tacked on lawyers’ fees and the loan was deemed delinquent. The fight continued after his mortgage was allegedly sold to EMC, a Bear Stearns unit.

Unlike most people, Mr. Lavalle had the time and money to fight. He persuaded his family to help him pay for a lawsuit against EMC and Bear Stearns. Seven years and a small fortune later, they lost the house in Dallas. Back then, judges weren’t as interested in mortgage practices as some are now, he said.
...
...Mr. Lavalle pointed out legal lapses by some of its representatives. Among them was the law offices of David J. Stern, in Plantation, Fla., which was handling an astonishing 75,000 foreclosure cases a year — more than 200 a day. In 2005, Mr. Lavalle warned Fannie Mae that some judges had ruled that the Stern firm was submitting “sham pleadings.” Nonetheless, Fannie continued to do business with the firm until it closed its doors last year, after evidence emerged of rampant forgeries and fraudulent filings.

O.C.J. Case No. 5595 found that Stern wasn’t the only firm working for Fannie that seemed to be cutting corners. It also found that lawyers operating in seven other states — Connecticut, Georgia, New York, Illinois, Louisiana, Kentucky and Ohio — had made false filings in connection with work for Fannie Mae or the Mortgage Electronic Registration System, or MERS, a private mortgage registry Fannie helped establish in 1995.

An attorney with Baker & Hostetler - a firm hired by Fannie Mae to investigate Mr. Lavelle's claims - Mark A. Cymrot, a partner who led the investigation disregarded Lavelle's warning that Fannie could stand to lose billions if misconduct by its lawyers and servicers led to substantial numbers of foreclosures needing to be undone.

The report simply concluded that not many people have the financial means to challenge a foreclosure, as Mr. Lavelle had, and that's where it ended. The mortgage giant counted on the average American being too broke to fight a foreclosure.

But one more shocking item from the report to note, "Mr. Lavalle warned Fannie years ago that MERS couldn’t legally foreclose because it didn’t actually own notes underlying properties." How's that for a kick in the pants from the mortgage giants that cost $150 billion of your hard-earned tax dollars?

Be sure to read the entire article at the New York Times.

[Photo: Vanity Fair]

Mitt Romney says that he's the man to fix our nation's ailing economy because of his extensive business skills. Well, he is a wealthy member of the one percent, however, he's not always such a successful businessman. Actually, one Kansas City company in that Romney purchased a majority share was bankrupt within a decade. Also, your tax dollars likely helped hand Romney a nice bail out.

Reuters:

In October 1993, Bain Capital, co-founded by Mitt Romney, became majority shareholder in a steel mill that had been operating since 1888.

It was a gamble. The old mill, renamed GS Technologies, needed expensive updating, and demand for its products was susceptible to cycles in the mining industry and commodities markets.

Less than a decade later, the mill was padlocked and some 750 people lost their jobs. Workers were denied the severance pay and health insurance they'd been promised, and their pension benefits were cut by as much as $400 a month.

What's more, a federal government insurance agency had to pony up $44 million to bail out the company's underfunded pension plan. Nevertheless, Bain profited on the deal, receiving $12 million on its $8 million initial investment and at least $4.5 million in consulting fees (Emphasis mine).

Lost jobs, no severance pay, no health insurance, drastically cut pensions...these are the business skills Romney is going to use to turn our economy around? These things sound horribly familiar. Just how did things work out for the people who worked for Mitt Romney's company?

Before the bankruptcy filing:

Veteran crane operator Ed Mossman says he was ordered to pick up a load of steel that was 50 percent above the recommended weight limit - a prospect that could have toppled the crane and sent Mossman plunging to his death. When he refused, he says, he was fired after putting in 29 years at the mill.

"The first 15 years, I had the best job in the United States, as far as I was concerned," Mossman said. "The last five years down there got to be pure hell."

And after the plant shutdown?

After nearly 30 years as a steelworker, Joe Soptic found a job as a school custodian. The $24,000 salary was roughly one-third of his former pay, and the health plan did not cover his wife, Ranae.

When Ranae started losing weight, "I tried to get her to the doctor and she wouldn't go," Soptic said. She ended up in the county hospital with pneumonia, where doctors discovered her advanced lung cancer. She died two weeks later.

Soptic was left with nearly $30,000 in medical bills. He drained a $12,000 savings account and the hospital wrote off the balance.

"I worked hard all my life and played by the rules, and they allowed this to happen," Soptic said.