Tag Archives: mortgage securities

U.S. Justice Department Goes After Ratings Agency S&P

It sure looks like payback for S&P’s downgrade rating on U.S. debt. Justice is looking at S&P’s ratings from 2006 and 2007 on various mortgage securities. Did S&P expect to make more money by giving positive ratings on these securities, … Continue reading

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Justice Department Goes After Standard & Poor’s

This investigation was launched prior to S&P’s downgrade of the U.S. credit rating. Still, it is hard to imagine that this investigation is not in large part payback for the downgrade. At issue here is S&P’s ratings of various mortgage … Continue reading

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Goldman Sachs Getting Sued For Junk Mortgage Securities

Goldman Sachs apparently recommended to many of their clients in 2006-2007, to buy into junk mortgage securities that Goldman Sachs was simultaneously betting would go short. There are trillions of dollars depending on the following civil cases. Report: This all … Continue reading

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What Is A Collateral Manager?

Have you heard about collateralized debt obligations? Those are bundles of debt. Sometimes they are bundles of mortgages and other times they are bundles of student loans or credit card loans or auto loans. CDOs became huge during the heady … Continue reading

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Political Investigations Widen Into Mortgage Backed Securities

Politicians from both parties, though mainly the Democrats, are eager to lay the blame for the housing crash at the feet of Wall Street and the banks. Investors bought mortgage-backed securities without really knowing what they were getting into. Risky … Continue reading

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What Was The Role Of Banks In The Mortgage Meltdown?

The banks were patsies. They were suckers. They went along without much protest to the manipulation of politicians forcing lenders to lower their lending standards to “help” blacks and latinos buy homes despite bad credit. Well, those credit risky types … Continue reading

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Did One Hedge Fund Keep The Housing Bubble Going?

Economist Thomas Sowell points out that the housing bubble in the United States was primarily restricted to certain areas like coastal California with extensive land use regulations, restricting the amount of land available for building. Reduced supply raises prices. High … Continue reading

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Exemption Proposed For Mortgage Securities

The exemption would apply to mortgages where borrowers have made at least a 20% down payment. When buyers have made such down payments, they are much less likely to walk away from their homes and to default. Few free market … Continue reading

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Should Banks Own A Stake In The Mortgage Loans They Originate?

One of the causes of the housing crash was that many lenders who made mortgage loans quickly resold them and thus had no stake in those loans getting paid off. Thus, these lenders had a perverse incentive to make as … Continue reading

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How Can You Accurately Value Untested Mortgage Securities?

For mortgage security instruments 40 or 60 years old, it seems straight forward to value them. But how do you value these fancy new forms of mortgage securitization that have only been around 15 years? Yet the three ratings agencies … Continue reading

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