One of the few people I've gotten to know who actually went to prison for mortgage fraud is a 50-year-old grandmother from Southern California named Maria Echeverria.
Things are looking up for Echeverria since I first interviewed her last year. She has been moved from a federal prison camp in Victorville, Calif., 85 miles northeast of Los Angeles, to a half-way house that allows her to go home over weekends.
"I am wonderful," she told me over the phone Sunday, as we watched the Denver Broncos dismantle the Pittsburgh Steelers on our respective televisions.
She can now be with her husband, grown daughters and grandchildren. She is attending school to become a chef -- something she has always wanted to do. She is dreaming of the day when she can open a pastry shop, and continue baking cakes for weddings and special events, as she has for most of her life.
Echeverria also wants to write a book about her time in the mortgage business and in the federal correctional system. She isn't yet sure what to call the book, or even how to tie together its many strands, but she has witnessed a lot of corruption and abuse on both sides of the wall and wants to say something. Right now, it is all still swirling around in her head like a half-remembered nightmare.
I am not sure Echeverria fully appreciates her unfortunate place near the bottom of the mortgage securitization chain.
Wall Street needed mortgage loans so it could bundle them into mortgage-backed securities and collateralized-debt obligations. Loan quality didn't matter. Loan quantity did. There were loans that didn't require principal payments, and stated-income loans that didn't even require proof of income.
As a mortgage broker, Echeverria trafficked in stated-income loans -- a.k.a. liar loans, since anyone could say anything about his or her income and not have to back it up.
She is the American-born daughter of immigrants. She worked her way through community college, despite her dyslexia. And when she got in the mortgage business, she allegedly did what an entire financial system was demanding.
Last year, she found herself among 19 defendants stung in a mortgage-fraud crackdown by the U.S. Attorney's office in San Diego. She pleaded guilty to ordering up fraudulent CPA letters from Aguilera's Bookkeeping and Income Tax in Vista, Calif., to embellish at least nine loan applications.
The borrowers defaulted, yet the borrowers weren't indicted. Nor were executives at the mortgage companies that helped create the subprime-lending machine she was feeding.
Echeverria's story is that she felt pressured to confess to something she didn't do. I don't care to parse that. The sad fact is that she's now a felon on the hook for more than $90,000 in restitution. But she isn't alone.
"I was completely shocked at how many realtors, appraisers, loan officers, and loan processors that were in there," she said.
In a room full of 34 inmates, about a dozen were in mortgage lending and real estate, she said. The rest were there for the usual drug offenses or for transporting illegal immigrants.
"You could always tell who was in there for a paper crime," she said. "It was always the older women, like myself.
"Half of them said they knew what they did was wrong," Echeverria said. "The other half said, no, they just followed lenders' guidelines."
It is easier to count the number of top executives convicted for mortgage fraud than all the little people who peddled exotic loans to deadbeat borrowers. Last year, Lee Farkas, founder of bankrupt Florida mortgage lender Taylor Bean & Whitaker, was sentenced to 30 years in prison for a $3 billion fraud. Other than that, there are mostly lawsuits and civil allegations from overwhelmed regulators.
Echeverria said she bided her time in prison by taking care of fellow inmates who she said were denied medical care. Many of them, she said, were women who were sexually abused as children and left to fend for themselves on the streets. Echeverria said she crocheted blankets for them, and helped them fill out forms.
"We want prison to be a punishment," she said. "We don't want it be inhumane. But that's what it is."
Sentenced to a year and a day, Echeverria will be free in March, long before the final chapter on America's systemic mortgage fraud is written. She isn't bitter. She is moving on to the next phase of her life.
"I was determined not to let this destroy me or affect who I am," she said.
(Al's Emporium, written by Dow Jones Newswires columnist Al Lewis, offers commentary and analysis on a wide range of business subjects through an unconventional perspective. Contact Al at email@example.com or tellittoal.com)