On the first case sold, and State AGs have been pursuing such cases.. Paradoxically, while there are enough of them to give State Prosecutors fits because of too much case load, my understanding is that they weren't a large enough part of the overall market volume to move the market.
Do you think that those are a substantial fraction of all loans approved in the last decade? (I'm particularly interested if the answer to that question is 'yes,' by the way)
WRT breach of fiduciary duty... that's a very hard case to make. There's plenty of stupid to go around, but if we start locking people up for stupid, well, that's going to be a difficult world to live in. Certainly anybody who said 'there's a lot of dodgy loans in this portfolio, we should paper over that and sell them anyway,' has a solid bullseye on their forehead for civil fraud and quite probably criminal, but everything I've read anywhere points out that there was a lot more buyer-side throwing caution to the wind than there was seller-side skullduggery. The sellers were disclosing 'this is a high-risk product' and the buyers were then cheerfully buying, on the theory that 'hey, the market can't crash everywhere at once at the same time, the mortgages are insured by the Fed and the bonds are insured by AIG, somebody will have money we can recover from.'
![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
no subject
Date: 2011-02-21 11:11 pm (UTC)Do you think that those are a substantial fraction of all loans approved in the last decade? (I'm particularly interested if the answer to that question is 'yes,' by the way)
WRT breach of fiduciary duty... that's a very hard case to make. There's plenty of stupid to go around, but if we start locking people up for stupid, well, that's going to be a difficult world to live in. Certainly anybody who said 'there's a lot of dodgy loans in this portfolio, we should paper over that and sell them anyway,' has a solid bullseye on their forehead for civil fraud and quite probably criminal, but everything I've read anywhere points out that there was a lot more buyer-side throwing caution to the wind than there was seller-side skullduggery. The sellers were disclosing 'this is a high-risk product' and the buyers were then cheerfully buying, on the theory that 'hey, the market can't crash everywhere at once at the same time, the mortgages are insured by the Fed and the bonds are insured by AIG, somebody will have money we can recover from.'