What a Tangled Web Mortgage Securitizers Weave…
By Barry Ritholtz at The Big Picture
What happens when mortgage lenders lose proof of a mortgage?
That question gets addressed in a must read article in the Sunday NYT by Gretchen Morgenson: If Lenders Say ‘The Dog Ate Your Mortgage’.
Gretchen begins with a little history: Over the past decades, the banks and their lawyers have held the cards in litigation. Even with the institutional advantages they held, Banks were given the benefit of the doubt against the “deadbeat mortgage delinquents.”
More recently, we have learned that the bank was undeserving of that. And, we have also learned that a goodly percentage of the “deadbeats” had been defrauded — by mortgage brokers, by real estate agents, and by extension, the banks themselves.
Throw in the securitization process, rife with legal shortcuts that made attempts by good faith borrowers to work out of their delinquency problems all but impossible. Hence, you end up with a judiciary that has become increasingly infuriated with bankers…
