Back then there was rampant mortgage fraud, huge demand from Wall Street
for subprime mortgage securities and rating agencies giving them black checks, with no regulatory oversight whatsoever.
Not exact matches
To take that comparison a step further, is there really any difference between the way VW packaged and marketed its pollution - spewing cars to regulators and customers as «clean,» and the way financial dark wizards took lowly
subprime mortgages and prettied them up
for sale as Triple - A high quality
securities to gullible investors?
In that case, led by the civil division of the United States attorney's office
for the Eastern District of California, prosecutors found that JPMorgan flouted federal laws with its sale of
subprime mortgage securities from 2005 to 2007.
Examples pertinent to this crisis included: the adjustable - rate
mortgage; the bundling of
subprime mortgages into
mortgage - backed
securities (MBS) or collateralized debt obligations (CDO)
for sale to investors, a type of securitization; and a form of credit insurance called credit default swaps (CDS).
But much like the country's private lenders during the first several years of the present century, Fannie Mae and Freddie Mac's drive to increase profits helped create the housing bubble (thanks to lowered underwriting standards, approvals
for subprime borrowers and the bundling of loans into
mortgage - backed
securities).
In 2006, the investment bank was the top underwriter
for subprime mortgage backed securities with a roughly 11 percent market share, according to Inside Mortgage Finance, a trade publ
mortgage backed
securities with a roughly 11 percent market share, according to Inside
Mortgage Finance, a trade publ
Mortgage Finance, a trade publication.
Big Wall Street banks package
subprime mortgages into
securities and sell them to hedge funds and institutional investors looking
for high yielding assets.
And, like
subprime mortgages before the financial crisis, many
subprime auto loans are bundled into complex bonds and sold as
securities by banks to insurance companies, mutual funds and public pension funds — a process that creates ever - greater demand
for loans.
As this large «pool of money» was invested internationally, it drove down the costs of borrowing, drove up
subprime lending, and created large demand
for mortgage - backed
securities.
Mrs. Nonas has 17 years of combined experience; worked at Moody \'s Investors Service covering the entire spectrum of
mortgage backed
securities products and small balance commercial loans; at WestLB and Barclays Capital, was the
mortgage lead on the risk management team underwriting over $ 15 billion in
mortgage financing facilities, established warehouse lines of credit, reverse repurchase agreements, Asset - Backed Commercial Paper (ABCP) conduits and other credit facilities
for subprime mortgage originators and servicers; developed a process to conduct and document on site due diligence at the counterparty \'s origination and servicing base of operations.