If that is the case (and I might agree with you on this), then financial instruments such as collateralized mortgage obligations (CMOs) and collateralized debt obligations (CDOs) should be absolutely prohibited by law.
Keep in mind that Federal and state laws can't even keep up with the complexity of these instruments (which is one more reason why all of these cases are now being contested in various courts). Do you realize that there are still some broad legal questions (with enormous implications) about whether these things should be subject to real estate law or to securities law?
“Do you realize that there are still some broad legal questions (with enormous implications) about whether these things should be subject to real estate law or to securities law?”
Oh we agree....however, there ought to be some way for a revenue stream (like a mortgage) to be securitized in an honest and financially sound manner by the owner of said revenue stream, if there is an informed and willing buyer.
We know that Wall Street couldn’t do it honestly, but that doesn’t mean it can’t be done. I don’t have the answer to CMO’s or CDO and if they can or should be made financially sound, honest, and legal - but the way it was done previously obviously was not sound, honest - and the legality has yet to be cleared up.