Skip to main content

View Diary: 60 Minutes Gets It (212 comments)

Comment Preferences

  •  gotta give credit to Lynn Szymoniak (11+ / 0-)
    "In my mind this is an absolute, intentional fraud," Lynn Szymoniak, who is fighting foreclosure, told Pelley.
    While trying to save her house, she discovered something we did not know: back when Wall Street was using algorithms and computers to engineer those disastrous mortgage-backed securities, it appears they didn't want old fashioned paperwork slowing down the profits.

    If she hadn't questioned her own foreclosure documents, who knows, the talibanksters would be sitting even prettier...............wtf

    http://www.cbsnews.com/...

    •  "old fashioned paperwork" says it all: (4+ / 0-)

      Does the type of paperwork even exist that validates the sales of portions of mortgages to this or that investor?  Please correct me as needed, but my impression is that these algorithms the banks and Wall Street used to securitize mortgages sliced and diced the debts into time segments associated with each mortgage's duration, rating the segments for default risk according to actuarial data, and then recombined the pieces into various mortgage-backed securities.  This system is not explained to us when our mortgage lender tells us it intends to sell our mortgage.  For instance, the paperwork I signed acknowledging that Countrywide would sell my mortgage never informed me that my mortgage would, essentially, be disassembled into its constituent years and those years dispersed into this or that mortgage-backed security.

      It really is a lot like how our food industry makes hamburger these days. Once upon a time, a butcher made hamburger from the meat of one animal, and anyone who ate that hamburger could know just which steer they were eating and who raised it.  Nowadays, meat processing plants create hamburger by blending pieces of meat and fat and what else from many, many different animals, even animals raised in different countries (Note:  I did not buy the ground beef I saw the other day labeled as containing US, Canadian, and Australian meat).  We eat one little burger and have no way of knowing which individual animals we're consuming, let alone how they were raised.  

      Somehow, I don't think of either situation as true "progress."  

      "It is the right of the people that they shall not be deprived of hope." [Willie Stark in 1949 film version of Robert Penn Warren's All the King's Men]

      by vahana on Mon Apr 04, 2011 at 12:18:53 AM PDT

      [ Parent ]

      •  so in effect (3+ / 0-)
        Recommended by:
        lostinamerica, Randtntx, vahana

        the mortgage industry is gotten mad cow disease.

        I am quite sure now that often, very often, in matters concerning religion and politics a man's reasoning powers are not above the monkey's. - Mark Twain

        by route66 on Mon Apr 04, 2011 at 03:21:26 AM PDT

        [ Parent ]

      •  You mentioned, slicing and dicing (1+ / 0-)
        Recommended by:
        vahana
        the debts into time segments associated with each mortgage's duration, rating the segments for default risk according to actuarial data...

        What's interesting about that, with respect to intentional fraud, is that in Congressional hearings bank executives admitted betting against those loans because they knew the likelihood of default was higher for certain loans at certain times, i.e., when rates were adjusted upward.

        •  I wonder if the bank execs felt safe (0+ / 0-)

          making such admissions because they believe Congress unable to understand how the mortgage-backed securities were created.  We can only hope that someday, soon, before whatever existing statutes of limitations run out, these evil, greedy bastards get their just rewards.

          Sometimes, I find it insufficiently satisfying to believe in karma and reincarnation.

          "It is the right of the people that they shall not be deprived of hope." [Willie Stark in 1949 film version of Robert Penn Warren's All the King's Men]

          by vahana on Tue Apr 05, 2011 at 11:05:32 PM PDT

          [ Parent ]

Subscribe or Donate to support Daily Kos.

  • Recommended (125)
  • Community (58)
  • 2016 (45)
  • Elections (37)
  • Environment (35)
  • Media (34)
  • Trans-Pacific Partnership (33)
  • Republicans (31)
  • Hillary Clinton (30)
  • Law (28)
  • Barack Obama (27)
  • Iraq (27)
  • Civil Rights (25)
  • Climate Change (24)
  • Jeb Bush (24)
  • Culture (23)
  • Economy (20)
  • Labor (18)
  • Bernie Sanders (18)
  • Senate (16)
  • Click here for the mobile view of the site