Steadfast Finances
A Personal Finance & Investing 101 blog that delves into current events, consumer education, and techniques to improve your bottom line.
28% of Securitized Loans Did Not Meet Underwriting Standards
Interesting stuff from Josh Rosner on the foreclosuregate debacle…
[paraphrased]
The banks and rating agencies knew that 28% of the loans, which the banks securitized, did not meet their underwriting standards but packaged them up and sold them to private investors, pension funds, etc.
Moreover, banks succeeded pressuring the ratings agencies — Standard & Poors, Moody’s Corporation, and Fitch Ratings — to put profit over analytics by giving them AAA ratings. The ratings agencies intentionally avoiding investigating the underwriting standards because the more securities they approved, the more money they made.
The proverbial rabbit hole just keeps getting deeper the more mainstream media keeps discussing the reality of just how severely contaminated the mega-bank’s balance sheets really are. Looks like the hope floats boat is about to get less crowded.
1 Comments
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9:42 pm
Yowza! That was hard to watch.
The depth and extent of the corruption being uncovered since the crash can only fuel public outrage (mine included). But, what can be done about it if our leaders allow it to happen? As we’ve seen countless times already, most recently with the outrageous Mozilo settlement, nothing will ever come of it, and none of the robber barons will ever go to prison.
Seems to me that only economic failure will bring about change, and who knows when that will happen?