Let the lawsuit parade begin
Sorry for the lack of posting yesterday -- had to watch the kiddos again. As I get caught up on all the latest news, I can't help but comment on this Washington Post gem of a story. In a nutshell, it talks about all the parties to the subprime debacle that might get sued in the coming months and years.
Frankly, I think just about everyone involved in the mortgage food chain deserves to shoulder some of the blame:
Greedy borrowers who stretched themselves to the max to get into homes they really couldn't afford ... Overaggressive speculators who never paid any attention to the quaint notion that real estate investments should actually generate cash flow ... reckless lenders who chose to ignore prudence in an attempt to juice origination volumes with super high-risk loans ... package-and-sell Wall Street bankers who helped fund those loans, even though many were practically destined to fail from day one ... aloof bond buyers who scooped up bundles of crappy mortgages with nary a care in the world ... and ratings agencies that clearly dropped the ball in analyzing the creditworthiness of these securities. What a shame.
As an aside, I really have to hand it to a Representative from New York (quoted in the Post) for coming up with one of the most creative ways to describe the role of loan originators and credit ratings agencies in the mortgage mess. It kind of makes me hungry for barbecue, truth be told ...
"Essentially, the originators and credit raters shoved enough pigs and laying hens in with the beef herd that investors expecting prime ribs on their silver platter and money in their pocket ended up with pork ribs on their paper plate and egg on their face," Rep. Gary L. Ackerman (D-N.Y.) said in an opening statement during a Financial Services Committee hearing last week.
Frankly, I think just about everyone involved in the mortgage food chain deserves to shoulder some of the blame:
Greedy borrowers who stretched themselves to the max to get into homes they really couldn't afford ... Overaggressive speculators who never paid any attention to the quaint notion that real estate investments should actually generate cash flow ... reckless lenders who chose to ignore prudence in an attempt to juice origination volumes with super high-risk loans ... package-and-sell Wall Street bankers who helped fund those loans, even though many were practically destined to fail from day one ... aloof bond buyers who scooped up bundles of crappy mortgages with nary a care in the world ... and ratings agencies that clearly dropped the ball in analyzing the creditworthiness of these securities. What a shame.
As an aside, I really have to hand it to a Representative from New York (quoted in the Post) for coming up with one of the most creative ways to describe the role of loan originators and credit ratings agencies in the mortgage mess. It kind of makes me hungry for barbecue, truth be told ...
"Essentially, the originators and credit raters shoved enough pigs and laying hens in with the beef herd that investors expecting prime ribs on their silver platter and money in their pocket ended up with pork ribs on their paper plate and egg on their face," Rep. Gary L. Ackerman (D-N.Y.) said in an opening statement during a Financial Services Committee hearing last week.
posted by Mike Larson at
9:26 AM
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