Community | July 12, 2009 | 5 comments

A QUESTION TO DIE FOR- Who made bank underwriting guidelines and not follow it?

source: http://mandelman.ml-implode.com/2009/07/giving-money-back-not-profitable-federal-reserve-stu...

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taps65
"Lenders don’t modify the loans of borrowers at risk of foreclosure because to do so would likely mean having to reduce the amount of money the borrowers owe the bank, and therefore could potentially end up costing the bank money."

Thats Right. After receiving taxpayer bailouts:
http://www.financialstability.gov/impact/contracts_list.htm

then using Credit Default Swaps to insure Leveraged Instruments:
http://www.globalresearch.ca/index.php?context=va&aid=8634

You can fool people most of the time....
Lets see if they also figured the last line out.
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5 comments // A QUESTION TO DIE FOR- Who made bank underwriting guidelines and not follow it?

  • taps65
  • taps65
  • taps65
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      taps65  
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    • Lax Underwriting , Foreclosures, and Credit Crunch Stimulate Misery Industries

      Let me reintroduce myself. I'm a dirt lawyer. I don't work on Wall Street. I work in the outer boroughs of New York City. I deal with the dirt and the dead - real estate, criminal law, trusts and estates. I've worked at a Broker Dealer and I prefer the courtroom to the glare of the Bloomberg terminal. However, Warren Buffet is fond of saying that you should invest in what you are familiar with. Let me introduce you to my unique ground level perspective of our "positive GDP growth".

      I worked as a bank attorney for mortgage refinances and advised purchasers and sellers of real estate in New York City during the "Golden Age" of the housing boom. Once home prices started to level off and the subprime lenders began collapsing, the refinances and sales dried up, but coincidentally, my landlord/tenant practice began to pick up. You see, many first-time homebuyers were given the "Big Kiyosaki" pitch, where owning multifamily properties would create "cash flow" and turn everyone into "Rich Dads".

    • 2 years ago
  • taps65
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      taps65  

    • Several class action complaints have also been filed in the U.S. District Court for the Northern District of California on behalf of purchasers of Wells Fargo Asset Securities Corporation Mortgage Pass-Through Certificates pursuant and/or traceable to the false and misleading July 29, 2005 Registration Statement and Prospectus Supplements, October 20, 2005 Registration Statement and Prospectus Supplements or the false and misleading September 27, 2006 Registration Statement and Prospectus Supplements (collectively, the "Certificates").

    • 2 years ago
  • taps65
    • 0
      taps65  

    • http://securities.stanford.edu/1042/WFC_01/

      Summary: According to the complaint, following the issuance of the Certificates, disclosures began to emerge revealing the defendant routinely disregarded the underwriting guidelines in its mortgage loan origination. These disclosures were confirmed by substantially higher rates of delinquencies and foreclosures on collateral for such highly-rated debt issues. These disclosures, and the poor performance of the collateral, caused the Rating Agencies to review and revise the ratings assigned to the Certificates due to the fact that the true nature of the collateral had not been properly assessed at the time of the Offerings. The rating agencies dramatically downgraded the Certificates dramatically beginning in August 2008, resulting from the revelations regarding the true underwriting practices used to originate the collateral and the true value and quality of the Certificate collateral, which subsequently caused the substantial decline in the value of the Certificates.

    • 2 years ago
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