Posted by LynnNC on 3/15/09 1:14pm
Msg #280832

Sale of sub-prime loans

Last night my husband and I sat at the bar of our favorite steakhouse to have dinner. Sitting next to me was a couple who formerly had a business as auditors of sub-prime loans being bundled for sale.

They said that of every 1,500 loans they audited, they recommended that 1,000 not be included because of poor quality. The Wall Street banks frequently ignored their recommendations and included many of the poor quality loans anyway in the packages they bought.

The couple said that the WS banks seemed less interested in the quality of the loans than wanting to buy the bundle of loans to be resold at a huge profit. They were all concerned if they didn’t buy them, their competitors would snap them up. Most of their work was auditing California loans for Morgan Stanley.

Reply by Lee/AR on 3/15/09 4:17pm
Msg #280838

I doubt that this surprises anyone. There were huge profits to be made and no bags to be left holding by the banks. Just pass it on to all those funds who were buying everything in sight. Who is to blame? Nobody and everybody...it's always their fault.