On Apr 26, 9:57*am, George wrote:
On 4/26/2012 9:02 AM, dgk wrote:





On Wed, 25 Apr 2012 23:01:36 -0500, Gordon Shumway
*wrote:

On 26 Apr 2012 03:30:12 GMT, *wrote:

On 2012-04-26, Gordon *wrote:

idiot-in-chief is costing financial institutions 100's of thousands of
dollars annually in legal fees.

I suppose those same "financial institutions" didn't actually receive
millions of dollars in bailouts for their inept handling of their own
business which they are supposedly so adept at.

Check history a little further back and you'll find where the
financial institutions were forced (regulated) to provide sub prime
mortgages. *They were not inept - congress was for forcing them.

That's nonsense. They were forced to consider making loans, not just
turn people down because of their zip code. No one forced any loan to
be made if the numbers didn't add up. What did happen was wrapping up
mortgages into securities. Now the issuing bank didn't give a crap
about whether the loan made sense, they made their money up front and
got the ratings companies to give top ratings to crappy loans. Then
they sold them.

Finally the "non dittohead" answer. Prior to the idea of securitizing
mortgages banks had to concern themselves with determining if they were
making a good loan because they held it. And if they wanted to sell it
to another bank they knew that bank would examine it. With
securitization it didn't matter because they got a commission and no
responsibility.- Hide quoted text -

- Show quoted text -

Except of course that the process of selling off
mortgages to another party isn't anything new.
I don't know why some folks think it's something new.
FNMA was founded 75 years ago. Nor is it
inherently anything bad. You want broad markets
to make mortgages widely available at favorable
rates.