{"id":4244,"date":"2010-07-10T21:54:39","date_gmt":"2010-07-11T02:54:39","guid":{"rendered":"http:\/\/ssgreenberg.name\/PoliticsBlog\/?p=4244"},"modified":"2010-07-10T21:56:30","modified_gmt":"2010-07-11T02:56:30","slug":"mortgage-investors-turn-to-state-courts-for-relief","status":"publish","type":"post","link":"https:\/\/ssgreenberg.name\/PoliticsBlog\/2010\/07\/10\/mortgage-investors-turn-to-state-courts-for-relief\/","title":{"rendered":"Mortgage Investors Turn to State Courts for Relief"},"content":{"rendered":"

The New York Times<\/em> article, Mortgage Investors Turn to State Courts for Relief<\/strong><\/a>, explains how big investors are using state courts to try to hold the banks accountable for the fraudulent Collateralized Debt Obligations (CDOs) that they sold.<\/p>\n

This item coincides with my starting to read the book The Big Short: Inside the Doomsday Machine<\/strong><\/a>. Part of the book is a retelling of the shoddy practices by the loan originators.\u00a0 That information is not new to me.<\/p>\n

On the other hand, The New York Times<\/em> article explains the assurances that big investors got from the packagers of CDOs that such shoddy practices were not going on.\u00a0 The banks told the investors that the banks had done due diligence to assure that mortgage standards had been maintained when, in fact, the banks had done no such due diligence (to put it charitably).<\/p>\n

A small investor like me had depended on such assurance from firms such as RAIT Financial Trust<\/strong><\/a>. I thought I was being so smart because RAIT assured me that they were mostly in commercial and not residential loans.\u00a0 What residential loans they had all had high credit ratings.\u00a0 The CDOs they sold were all non-recourse which I thought was even more protection.\u00a0 I did get some hefty dividends while the bubble was inflated, but I lost about 90% of the principle.\u00a0 Fortunately my strict policy of diversification had limited the amount of money I invested in RAIT, and the dividends probably cut the loss to only 70-80%.<\/p>\n","protected":false},"excerpt":{"rendered":"

The New York Times article, Mortgage Investors Turn to State Courts for Relief, explains how big investors are using state courts to try to hold the banks accountable for the fraudulent Collateralized Debt Obligations (CDOs) that they sold. This item coincides with my starting to read the book The Big Short: Inside the Doomsday Machine. […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[166],"tags":[],"class_list":{"0":"post-4244","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-stevegsposts","7":"czr-hentry"},"_links":{"self":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/4244","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/comments?post=4244"}],"version-history":[{"count":5,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/4244\/revisions"}],"predecessor-version":[{"id":4249,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/4244\/revisions\/4249"}],"wp:attachment":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/media?parent=4244"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/categories?post=4244"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/tags?post=4244"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}