Why did Countrywide continue to purchase enormously inflated mortgages from first level lenders?
Why did they purchase 50 year mortgages and interest only loan contracts from first level lenders which drove them into massive unsecured debt and led them into being bought out by Bank of America?
So neocons are claiming the hunderd million dollar CEO of Countrywide was lied to by Fanny and Freddie.
So why pay him hundreds of millions if he was so easily duped?
They were lied to by Fannie Mae and Freddy Mac and lead to believe that those mortgage backed securities were government backed.
This was THE FRAUD of the century, if not the largest ever in history.
That Fraud has crashed the entire credit system world wide with the exception of some small off main stream lending institutions. The world economy depends on the credit system, and without flow through that system nothing moves and our economy crashes. Most of the world economy crashes.
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Because Democrats in Congress told them to do it and because Fannie and Freddie were buying them.
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Because Bush was against Regulations…this all happened on his watch.
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One of the issues is the ratings agencies. If the paper was still rated AAA, then most people would assume there would be no reason not to invest.
Many aspects of this meltdown have to be investigated. but definitely the ratings agencies are on my list.
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They were lied to by Fannie Mae and Freddy Mac and lead to believe that those mortgage backed securities were government backed.
This was THE FRAUD of the century, if not the largest ever in history.
That Fraud has crashed the entire credit system world wide with the exception of some small off main stream lending institutions. The world economy depends on the credit system, and without flow through that system nothing moves and our economy crashes. Most of the world economy crashes.
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Bahney Fwank as much as told them to do so.
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simple
thanks to Barney Frank and Maxine Waters and their friends who thought borrowing was a Civil Rights issue, lenders got "credit" for taking on certain high risk loans (kind of like tax credits for building a shopping mall in the inner city vs. in the swanky suburbs)…
…what’s more, Barney & Friends made sure that these guys were first on the list to get their bailouts, since they were obviously furthering the cause of Civil Rights….So once the bailouts were a sure thing, why NOT take on as much additional risk as possible…you don’t have to pay me a $30 million dollar bonus to figure that one out.
…As much as some would like the world to fit into nice little pigeon holes, fact is, these CEOs owe their bonus money to Dems and Reps alike….well, not McCain I guess, but he’d so yesterday…right?
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Cause those "securities" were all rated AAAA++ by the ratings agencies:
"Amid the chaos of the escalating subprime mortgage crisis, the three major credit-rating agencies – Fitch, Moody’s and Standard & Poor’s – have been voices of calm. They’ve downgraded only a sliver of the debt backed by such mortgages, and they say they expect the mess to stay safely confined to the subprime sector…"
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"The dangers of investing in subprime debt", March 19 2007
http://money.cnn.com/magazines/fortune/fortune_archive/2007/04/02/8403416/index.htm