Should Banks Be Sued For Mortgage-Backed Securities Turned To Junk?

What was Wall Street’s role in the great economic crash of 2008?

They principally played the role of suckers buying trillions of dollars of mortgage-based securities. They had no idea what they were buying. Nobody did. Because there were no reliable models on subprime loans.

Subprime loans are a recent development. They became big under President Bill Clinton who ordered Fannie Mae and Freddie Mac to buy vast amounts of them so as to make it more affordable for credit-risky consumers to buy a home.

Bloomberg reports on the bitter fall-out: Investors who sued over $351 billion in downgraded Countrywide Financial Corp. mortgage-backed securities after the 2007 subprime market collapse may have to settle for less than 1 percent of what they initially sought.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
This entry was posted in Banks, mortgage and tagged , , , , , . Bookmark the permalink.