Reviewer of Subprime Loans Agrees to Aid Inquiry

[ursi]

Source: New York Times

A company that analyzed the quality of thousands of home loans for investment banks has agreed to provide evidence to New York state prosecutors that the banks had detailed information about the risks posed by ill-fated subprime mortgages.

Investigators are looking at whether that information, which could have prevented the collapse of securities backed by those loans, was deliberately withheld from investors.

Clayton Holdings, a company based in Connecticut that vetted home loans for many investment banks, has agreed to provide important documents and the testimony of its officials to the New York attorney general, Andrew M. Cuomo, in exchange for immunity from civil and criminal prosecution in the state.

The agreement, which was confirmed by Mr. Cuomo’s office and Clayton, forwards an investigation by the attorney general into the question of whether the investment banks held back information they should have provided in the disclosures that accompanied the huge packages of loans they offered as securities.



Read more: http://www.nytimes.com/2008/01/27/business/27subprime.html?ref=todayspaper

[truthisfreedom]

1. Ruh-roh. After all the money they lost, what further punishment can they endure?

Prison time?

Yay.

[Xipe Totec]

4. That's the thing, they didn't lose their own money

The execs cashed out before the drop.

[Afje]

2. "in exchange for immunity from civil and criminal prosection"

They were supposed to analyze those loans - looks like they either didn't do that.

[truthisfreedom]

3. Sometimes I wonder if it was all a ploy to own massive amounts of land in foreclosure that could be

sold for 10 times its value when the coastlines go under water in a few years and people come rushing in to higher ground.

[soothsayer]

5. just another pump and dump money making scheme

[Demeter]

7. I Doubt They Thought That Far Ahead

These guys live on the Quarter system.

[AP]

8. The ploy isn't to own. The ploy is to keep up the churn, and have as little equity out there as

possible.

Banks don't make money when people take out loans of 50% of the value of a house, pay them off quickly, and then live in the house for years without any mortgage at all.

They make money when people take out 110% mortgages, pay a lot of fees just to get the loan, pay interest for a while without every paying paying principal, get foreclosed, and the house gets sold again within a couple years to someone else who takes out 110% mortgage, pay fees (lather, rinse, repeat).

When your profit comes from fees and interest, you want churn and you people never to pay principal.

[Tansy_Gold]

9. Thank you. You just saved me from typing -- and saved

everyone else from reading -- a much longer version of your succinct post.

"They" want to essentially own all the land and charge perpetual "rent" for it. Remember that home ownership is at the core of the American dream, and the last thing "they" want is for the masses to appropriate the rights of the elites.


Tansy Gold, who is currently fighting with a title company over some of those "fees"

[ursi]

10. damn true! these people knew what they were doing too!

and they want to keep those values way high so the whole system reaps more for them and you are at the plow.

Disgusting elitist system we have in this country ...

[Xenotime]

12. Basically...the rich get richer.

[Demeter]

6. Oooh! That's Gonna Hurt!

Evidence--just what this country needs: hard, incontrovertible, damning evidence.

[donkeyotay]

11. "in exchange for immunity"

Oh yeah. We'll have a little look-see. Some investigating and speechifying. The system has lost all credibility with me.