Somewhere in early 2008, it began to dawn on folks that the bubble was, in fact, a bubble. The system crashed. In September, John McCain suspended his campaign (military metaphor, tsk tsk) to come to the rescue, at which point he lost the election.
Now comes the blame game. Time to analyze the dumps and identify the wrongdoers. Lots of entities lost their shirts investing in those securitized mortgages. If they can show they were sold a bill of goods, then they are entitled to recover. That is, if there is anything to recover! That is their reward for marshaling their talents in the service of public policy. God damn them all!
“I think what happened was, the government (Barney Frank and Chris Dodd) created a safety umbrella over the mortgage industry, in the form of Fannie and Freddie. Those quasi-governmental corporations stood ready to back up mortgage paper, as long as certain increasingly loose guidelines were meant.”
I think you are on to something here just look at the BOA put backs at Fannie/Freddie that were settled for ONE CENT on the dollar after obama left the GSA’s open ended for the Banks to pile these on to the taxpayers. Seems a lot of people were duped at the time of the financial crisis the reality is those TBTF bankers had the democrats in their pockets. It was a two fer they got to eliminate a lot of their competition (our own smaller conservative bankers) and we got stuck with the bill to boot.
Unlimited credit for GSEs seen as backdoor bailout
http://www.reuters.com/article/idUSTRE6044YU20100105
Is Fannie bailing out the banks?
“But how sharp is Freddie if all it can do is squeeze a $1.28 billion payment out of a giant customer in exchange for relinquishing fraud claims on $117 billion worth of outstanding loans? The very best its million-dollar executives can do is claw back a penny on each bubbly subprime dollar?”
http://finance.fortune.cnn.com/2011/01/03/is-fannie-bailing-out-the-banks/
I get irritated with people who think this is only some kind of so called dead beat issue. People certainly have the right to expect a clear title on a home. The Banks greed in trying to save filing fee’s with MERS and inventing these faulty products in the first place is often overlooked and I don’t hear people referring to them as Dead Beats even though their losses were socialized unto the taxpayers or when they walk away leaving the taxpayers again to eat the losses!
More banks walking away from homes, adding to housing crisis
Those who had these MBS’s as investments whether it be through a Pension Fund/401K in a bond that had these and were lied to by the banks who sold them as AAA were greatly harmed by these TBTF bankers as well.