Lending Lies- Dis(Honesty) is Contagious


By William Hudson



Although it won’t be a big surprise to most of you, research has proven that bankers are twice as dishonest as politicians according to Professor Dan Ariely who is the founder of The Center for Advanced Hindsight at Duke University. You can probably predict where attorneys fall among that spectrum (likely more dishonest than drug cartel members and used car salesmen). Ariely believes that the current ethical tangles we face as a nation are the result of a pack mentality, where the majority resort to deception to gain an advantage.

Last year a documentary called (Dis)Honesty featuring Yale Researcher Dan Ariely, and directed by Yael Melamede, was released. The documentary examined why modern society is plagued by dishonesty, cheating, and by a culture of fraud and deception.


The film examines the most controversial crises of the past decade including the ongoing financial crisis, weapons of mass destruction to declare war on Iraq, and the NSA claiming they were not spying on average American citizens. The film also focuses on the lies of athletes, marketing gurus, cheating spouses and a mother who used a relative’s address so her children could attend school in a better school district than the school located in her designated zone.


The film asks us to consider why we lie. Ariely claims it is because we gain an advantage, even though we consciously may not recognize we are engaging in deceptive behavior. As we become more isolated by technology, we become estranged from our neighbors and community, and the theory is that we somehow become less accountable to our fellow man. We become less sympathetic, empathetic and honest.

The film doesn’t specifically address the ongoing financial meltdown but brings to light the mental processes of groups like bankers that caused the 2008 financial implosion to occur. Ariely’s research demonstrates that being dishonest is influenced by distance, benefits, alliances, conflicts of interest and risk verses reward considerations. He also found that highly creative types tend to engage in deception to a higher degree than less creative types.

Think about a group of highly intelligent bankers and attorneys who have endured lengthy and costly educations to achieve their current success and status. Surrounded by talent and intelligence, the only way to differentiate themselves is to “rise above” the competition so that their employer takes notice. Therefore, they engineer a crazy concept of “faux” securitization that will make the banks wealthier than ever (and subsequently more powerful). Although the planner of this crime recognizes that his or her plan will create massive economic turmoil they proceed to execute the plan anyways. The person’s peers agree to go along with the plan, not to be left out.

The group no longer recognizes a bad apple in the bunch, since the entire group is doing the same thing, and the deception and fraud becomes socially acceptable. Ariely has been able to demonstrate that there is a herd mentality, and if the herd justifies that cheating is okay, than the majority will cheat. However, if there is an overall culture that cheating is not okay, and the group believes that people “like us” don’t cheat- then the group will not cheat. The idea is that people will emulate what is socially acceptable within their peer group and follow the “social norm” of their respective group.

Ariely says that we are all victim of the “fudge factor” where we convince ourselves things will be okay and we have a tendency to be overly optimistic of the outcome. He found if you convinced a test subject that they were superior to their peers on an exam (even if they aren’t) they will carry forward a sense of superiority and will be overconfident that they will also outperform others on future exams.


We engage in self-deception, rationalize our behavior and tend to convince ourselves that the positive outweighs the negative. This is when people get in trouble and get in over their heads. There is also a neurological process of desensitization where lying to ourselves and others becomes easier and easier.

When you look at what has happened in the United States over the past decade in light of these findings- it becomes obvious why the American Culture of Deception has resulted in massive economic fraud, the degradation of the rule of law, and anemic law enforcement. Our media, government, judiciary and law enforcement are pretending everything is okay when it is not (despite the evidence)-and the country is receding into a myopic, vindictive and irrational system that is ultimately self-serving….or until all hell breaks loose.

Usually lies and deception start small before they snowball into an out of control situation. To demonstrate how this happens, the film features a day trader, broker and a journalist who engage in insider trading. At first, it is simply a conversation on a street corner, but soon a plan is hatched, and the three become so successful that the SEC discovers their trades are too successful to be random. Tens of millions of dollars of inside trades later, the three will be sentenced to decades in prison. Each claim they never meant for things to get so out of control.


Why shouldn’t the average man lie to better his chances of success and wealth when everyone else does?


Corporations lie (GMOs-chemicals-vaccination-pharmaceutical safety, RFID, privacy, spying).


Wall Street profits off of pathological lies (money laundering, currency manipulation, securitization and derivative schemes, forgery, perjury, fraudulent foreclosure, predatory servicing).


Governments lie (Weapons of Mass Destruction, Guantanamo, Benghazi, Email servers, US Citizen status, CIA drug/arms smuggling, voting fraud, etc).


Governmental Agencies lie (FDA, FDIC, OCC, CFPB, CIA, FBI, BLM, EPA….).


Quasi-Governmental Agencies lie (Federal Reserve, IRS, Fannie Mae, Freddie Mac).
Academia Lies.


The Media lies (manipulating stories, hiding information, representing corporate interests/sponsors, propaganda, political bias).   Celebrities and athletes lie. Religion, Church and Religious leaders lie.


Who doesn’t lie? We are a Nations of Liars and deception is now the norm, while honesty the exception.


And NOTHING meaningful is being done to deter the deception and lies. Laws, rules, regulations, fines, and penalties do nothing to stop the lies. The only thing that appears to diminish the deception is prosecution and imprisonment- and those events are reserved primarily for Americans who can’t afford a good attorney. Ultimately deception degrades our entire social structure. As a nation we have become a bunch of elite athletes who can only compete if we are doping.


As we become more distant from each other and digital and social media becomes the currency of our times, people become distant, disjointed and are less conscientious of those they deem strangers. Tighter communities are more apt to embrace common goals, beliefs, ethics and practices but we don’t value these communities anymore.
Is there anything that can be done to stave off this moral decay?

Research done at the Center for Advanced Hindsight discovered a striking tendency about honesty. The mere suggestion of the importance of being honest, made people act more honest. Ariely discusses a phenomenon in Indian (as in India) schools where the school has an ‘honesty store’. The store is stocked with pencils, paper, snacks, and other goods that students need with a small jar where children pay for what they take.



The children are taught the importance of community, sharing, and how theft or dishonesty robs others of opportunities. The store has very little loss. Ariely believes that the mere suggestion reminding people of why honesty is important and moral does wonders for the overall community.  People are responsive to suggestions of being honest and just.



As a society we must punish rule breakers,  instead of rewarding these individuals with power, status and financial rewards. Furthermore, as a society we must become more cognitive of our tendency to deceive ourselves, others, and the ramifications on our families, communities and institutions.  Ariely believes that most people want to do good and want to do right- but get lost in self-servicing deception.

Ariely concludes that dishonesty is contagious and apparently this is true. He also recognizes that we all have the capacity to build a more ethical and honest world no matter how limited and fallible we are as humans. When it comes down to it, the financial bubble was created because of the factors that Ariely identifies: competition and deception among a group of peers who sought an advantage that ultimately snowballed into a problem of epic proportions.


It is now nine years later, and the Mega Banks and our government officials have yet to be honest with themselves.  It is time that we all admit- from 2000 to the current time the nation experienced a complete securitization fail. The trusts are empty.  The investors and pensions are exposed.  And the homeowner was simply a pawn in this deceptive ruse.  The banks, courts, media, markets, investors and government can refuse to acknowledge the 800 lb. walrus in the room (they smell worse than elephants)- they can convince each other that it is all going to be fine, but as Dan Ariely will tell you- ultimately, all deception is revealed.


21 Responses

  1. i have a lawyer but i always like to learn what is happening. I do not like to be in dark.

  2. An injunction will stop the foreclosure process.
    It can give you time to plan pro se.
    Usually three to six months.

  3. What is that and what is it for?

  4. In Florida,

    Can you petition for an emergency injunction?

  5. William Hudson tells it like it is!!!! The truth and nothing but the truth!!!
    Some of us have had the courts (judges etc.) participate in the manipulation of the COURTS via bias, mixed with rude behavior to homeowners allowing the error’s by the courts to wrongly continue. Just as our personal situation and $120,000.00 paid in legal fees to very bad attorneys. Those brave enough to put themselves out there at even greater lost. To finish fighting the case to the end are left with no choice but to go before the court as Pro Per. Try as we may we could not get the undeniable evidence which proved the forged signatures were not ours to matter. Neither the local law – enforcement agencies nor the courts would let us be heard and present years of evidence to prove this was intended fraud. Fraud plus Forgery is a sinful and serious crime

    Knowing you can’t right a wrong!!!! The courts are guilty of trying.


    We are hoping to tell our story to anybody of proper authority to do the right thing to END all this fraud.

  6. yes mine is photoshopped. i knew it when i first saw it in the 1st foreclosure and they continue to come after me. i understand the issues witht he note but wf is original lender so i need to prove securitization but no trust mentioned in my foreclosrue

  7. Will get one to you.
    Don’t spend time, energy or money until you know who is holder in due course. You may be surprised as many who frequent this site, after years of litigation, still do not know who owns the note.
    Request FULL accounting, as if the bank is a stranger to your contract, the only ‘remedy’ they have is to enter fraud upon the court as well as perjure themselves…felonies.
    Do your own form of qwr to anybody named or involved in your loan. Get everything in writing. RESPA requires response.
    Do not let opposing counsel wave a digitally scanned ‘note’ in front of a judge. Demand the judge examine and make sure a court recorder is present and get their perjury on record.
    If they file lost note, well then. They were not in possession at the time of the filing of foreclosure.

  8. Exactly, do you have an email

  9. Hammer,


  10. @BLD is the Countrywide case the RICO case in LA?

  11. In Florida,

    Petition for an affidavit for the banks attorneys to sign insuring they are the holder in due course. Verify above all else.
    They must be in possession at the time foreclosure was filed.

  12. Wfbna

  13. in Florida,

    In order for you to gain access to the PSA, a ‘trust’ must be listed. Who is foreclosing?

  14. RICO is on the table now in Federal Court in Los Angeles.
    We are moving in the right direction. Rico carries fines as well as imprisonment.

  15. fnm loan no trust given

  16. why just BOA??? all the banks did it. telling appraisser if they do not come in at sale value thwy will not get their business. when i found out about appraisal fraud i looked at mine when i bought my house in 2006. I knew about appraisals. if you can not find the same house with in 1 mile of your home, the appraiser is suppose to continue to go further away until the same specifics are found. and the rule of thumb is only 3months from the date of the appraisal. my appraisal they went 6 months from the date instead going 2-10 miles. yup. that was only 1 comparable. imgainthey did this to everyone. i heard that builders of those big communities were putting the 1st 3 home sales in family members names so that the comparable would be ligit. very sad. hope things end soon before more homeless people have to leave the state of florida. whatthey have done is make rentals to high for our salaries

  17. What is the name of your trust?
    Be aware that each Secretary of State has information detailing the ‘trust’ and can verify in writing the trust has no activity…no business transaction. Usually Delaware or New York.

  18. question for all about securitized trusts. if the securitization happened (FNM loan closing papers state this is a money security) i tried looking up my psa on the SEC website difficult to find if it is a failed securitization. there are no assignments in count i was told in a letter its on mers

  19. well they all comitted appraisal fraud. but the lies…..robo signed documents, not following court procedures, saying they lost the note and mortgage and have a fake document ect and my favorite is the photo shopped signatures on notes endorsed with a stamp with no date and no notary? i even heard they have an actual machile that copies our signatures as well. with all these lies i do not understand judges in america today. why do homeowners still get that same ole same ole. Many folks did not cause this but the banks were on same page telling folks they can not take a modification application without being 90 days late. my god judges should just look at all this and file their own law suits against all the banks. oh thats right its giving them employment and a 4-ever pension. my god there is money at all ends of this fraudclosure fraud. the bottom line it has to end at somepoint i hope the courts, the bank lawyers, and the bank lawyers employees have a plan B because someday we will prevail.we have enough lawyers on our sides fighting this everyday in court. what I am not liking is judges keep giving these liars more time. more time for what? florida state statute says % years and thats it. no where else when the SOL can it be dug up again but in foreclosures. god help of us all

  20. Superb!

    Breaking…Lawsuit against BOA accuses Countrywide of racketeering and appraisal fraud.

Contribute to the discussion!

%d bloggers like this: