The mortgage bankers will go thru what the tobacco companies went thru, Eventually the court cases will be resolved over a prolong period of time. The banks will survive and regroup just like the tobacco companies. What the banks need to fear is the criminal charges against the individual officers because the prospectus must be reasonably accurate before it is used to represent the investment products to the investors. Not having the titles to the mortgage notes bundles in the portfolios sold but stating otherwise on the prospectus is a major bolo that can lead to jail/fines.
I think this is different than tobacco. We are talking about people’s mortages here, as well as a system that requires faith in order to function.