All Commentary
Friday, September 2, 2011

U.S. Is Set to Sue a Dozen Big Banks Over Mortgages

“In the years before 2007, “the market was so frothy then it was hard to find good quality loans to securitize and hold in your portfolio,” said David Felt, a lawyer who served as deputy general counsel of the finance agency until January 2010. . . .

Fannie and Freddie had other reasons to buy the securities, Mr. Rood added. For starters, they carried higher yields at a time when the two mortgage giants could buy them using money borrowed at rock-bottom rates, thanks to the implicit federal guarantee they enjoyed.” (New York Times)

Subprime-pushing regulators, a government-protected investment-rating cartel, mortgage giants that keep profits but can dump losses on taxpayers . . . but heck, let’s blame just the banks.

FEE Timely Classic

Bailing Out Statism” by Sheldon Richman