Sheila Bair & Barney Frank
Forbes-
Once upon a time, hardly anyone defaulted on a mortgage. Bankers made sure that their borrowers had mortgages they could afford, because if they didn’t, the bank would suffer a loss. Lenders were highly motivated to keep homeowners in their castles. Then, early last decade, mortgage securitization exploded on the scene, disrupting the fairy tale. Big, ugly giants with names like Countrywide Financial and New Century packaged huge pools of mortgages, sliced them up into securities, and sold them to investors, who now bore the risk if the loans defaulted. Because the mortgage bundlers — or “securitizers” — were paid upfront, they had powerful incentives to generate as much volume as possible, with little regard to whether homeowners could afford the loans. “I’ll be gone, you’ll be gone” or “IBG/YBG” became their mantra. They pushed loans whose interest rates would later spike, and of course, the infamous NINJAs — mortgages that required no income, no job, and no assets. Yield-hungry investors snapped them up. And as we all know, this story did not end happily: Millions of mortgages defaulted, leading to the worst financial crisis since the Great Depression and a still-struggling economy.
[FORBES]
© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.
This could be used as a succinct way to educate judges – most of whom still do not understand what happened and why.
I think a lot of home owners don’t even know whats going on with their mortgage I ask people I meet if they know if their mortgage was securitized and the answer is usually what are you talking about I know my mortgage was sold but that’s normal right. Then I ask them if they know what MERS and securitization is and the answer is usually no. @Elaine your right the judges and the American people need to educated.