Between 2002-2007, there $3.2 trillion worth of mortgage loans to people with bad credit and no documented income.
Who did most of this rating? S&P and rival Moody’s Investors Service.
Three years ago, Bloomberg News quoted sources as saying S&P gave overly generous ratings to mortgage-backed securities for the profit of doing so, even against the advice of analysts.
So why is Justice hot to trot now for S&P? It has to be payback for the downgrade.
Oh man, I long for the days of easy credit, where I had access to $120,000 in credit card limits.
What’s taking so long? And more to the point: Did Justice dust off a dormant investigation in retaliation for the downgrade?
These are serious questions, and one hopes the nation’s top law enforcement agency would never stoop so low. But the suspicion arises because, three years ago, Bloomberg News articles quoted former high-level S&P employees — some of them even allowed their names to be used — saying the service, in order to reap fatter fees, placed a “for sale” sign on its reputation by slapping top grades on real-estate securities that violated S&P policy.
S&P and rival Moody’s Investors Service were the two biggest companies rating pools of mortgages — $3.2 trillion worth — made to homebuyers with bad credit or undocumented incomes between 2002 and 2007. Those loans were packaged into securities, which the ratings companies graded as AAA and Wall Street firms sold to investors worldwide.