Saturday, September 25, 2010
Wall St crashed the economy by selling a bunch of shit
And millions of people across the country have lost damn near everything because Wall St sold a bunch of shit. Now it turns out that the company hired to test for the shit says 28% of mortgages sold by Wall St really, truly were shit. And Wall St sold the shit anyway.
During the height of the boom in 2006 and the period prior to its immediate end during the first six months of 2007, Clayton inspected home loans for Wall Street firms and government-backed mortgage giant Freddie Mac. Clayton looked at loans that the companies wanted to purchase from mortgage originators like New Century Financial, Countrywide Financial, and Fremont Investment & Loan. The company examined 911,039 mortgages, documents show...Can we get some perp walks now??
Of the 911,000 loans that Clayton scrutinized, 72 percent either met the mortgage seller's standards and other guidelines set by the buyer of the mortgages, typically Wall Street firms, or they had off-setting factors that allowed Clayton to give them a passing grade, like if the borrower who took out the mortgage put a lot of money down or had a very high income.
But 28 percent failed to meet those standards. Of those 255,802 mortgages that Clayton flagged for what were a variety of reasons, Wall Street ended up waiving 100,653 of them, or 39 percent of those loans that did not meet basic standards. And Wall Street firms didn't share this with investors...
During questioning by Angelides, Beal acknowledged that, because the firm was checking roughly 10 percent of the mortgages Clayton's clients were looking to purchase, one could say that Wall Street firms waived in as many as 1 million loans that Clayton had initially rejected.
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