They are also seemingly fraudulent in another sense. Many of these mortgage-backed securities are coming under scrutiny for not being properly "mortgage-backed" at all.
When created proper paperwork trails were not kept, and the notes and mortgages were split (which is a no-no in some states) and proper records were not filed at the county level. In a lot of cases county and state law was just wholesale ignored through the MERS system.
None of this is ever a problem unless you actually need to collect on the home that serves as collateral for your note. Apparently some in Wall St didn't think far enough ahead. This is beginning to work its way through the courts and will open a whole new bag of worms for those holding these notes at par.
So not only did the 'system' encourage the writing of irresponsible mortgages and scummy sales tactics, the banks also defrauded their customers: state endowments, pension plans, universities and other purchasers of these improperly structured financial products.
Yet this is all a civil matter and nobody will go to jail. Chalk another one up to the 'best and the brightest' of Wall St.
The author is a bit sloppy, but their heart is in the right place. What recourse do people have when the government that is supposed to be enforcing laws on the behalf of the citizenry is completely controlled by the very industry ripping them off?
When created proper paperwork trails were not kept, and the notes and mortgages were split (which is a no-no in some states) and proper records were not filed at the county level. In a lot of cases county and state law was just wholesale ignored through the MERS system.
None of this is ever a problem unless you actually need to collect on the home that serves as collateral for your note. Apparently some in Wall St didn't think far enough ahead. This is beginning to work its way through the courts and will open a whole new bag of worms for those holding these notes at par.
Just one example (of many) :http://www.bloomberg.com/news/2011-01-06/foreclosures-may-be...
So not only did the 'system' encourage the writing of irresponsible mortgages and scummy sales tactics, the banks also defrauded their customers: state endowments, pension plans, universities and other purchasers of these improperly structured financial products.
Yet this is all a civil matter and nobody will go to jail. Chalk another one up to the 'best and the brightest' of Wall St.
The author is a bit sloppy, but their heart is in the right place. What recourse do people have when the government that is supposed to be enforcing laws on the behalf of the citizenry is completely controlled by the very industry ripping them off?