How they stay out of jail

The excesses of sub-prime are story waiting to be told. The criminal activity was so widespread, and entrenched within our banking system (*cough* Countryfried *cough*), that most people have no idea that most of the lenders responsible are still around in one form or another, are still with us and are very familiar names (*cough* Bofa *cough*).

Goldman Pays $60 Million to End State Inquiry Into Loans

The settlement resulted from a continuing investigation by (Massachusetts) Attorney General Martha Coakley into subprime lending practices and the role of investment banks that acted as middlemen in loans that have resulted in foreclosure or contained terms so onerous that they were destined to fail.

In the heyday of subprime mortgage lending, Goldman Sachs both issued mortgage-backed securities and underwrote them, too. From 2005 through 2007, Goldman issued more than $33 billion in mortgage-backed securities, creating tradable securities from packages of individual subprime mortgages. In 2005 and 2006, it also underwrote $53 billion of securitized loans made by others.

While not the largest financier of subprime mortgages, Goldman consistently ranked in the top 20, sometimes in the top 10. It also added to the housing bubble by providing financing to other leading subprime lenders, including New Century Financial Corporation and Option One mortgage.

I reckon they’ll make that back through market manipulation in no time at all.  They’ll never actually feel that loss. They’ll just take it from someone else.

I got your public-private partnership right here andit’s called: cahoots.

Of the $60 million settlement, $50 million will go to reworking loans in Massachusetts, with the rest going to the state.

[NYT]


The only way to ever actually see recovery will be in your rear-view mirror.

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