Nothin’ to see here, folks. This would not have happened if only they could have foreclosed on the deadbeats...
/sarc
This goes a long way to ‘splaining Gross’ purchase of RMBS paper on margin tho.
Way more fraud than that.
I am recalling FR threads when Lehman crashed, in particular MBS that had what was considered "insurance", repurchase, repo.
If the terms of the security weren't met, like producing a specific return, the issuer guaranteed a repurchase.
Hedgers were buying both sides of the paper at fire sale rates.
FReepers kept saying all through the bailouts, etc., "Nothing has even gone to court, yet".
The banks securitized their mortgages with repo clauses. The holders of those securities expected to sell it back, if it was non-performing.
But the banks say the repo is for "market value". And the market has collapsed. The holders of the bad paper say the agreement is for par.
Looks like now we shall find out.
You could probably explain it better.
yitbos