November 28, 2010
"Don't Ask, Don't Tell": The Securitization Version
Mike Konczal posts a nice chart here showing some of the many things that went wrong during the mortgage securitization feeding frenzy. Money quote:
[I]t appears that during the worst excesses of the mortgage bubble the very basic rules of property transfer and record-keeping were ignored. . . . Key point: . . . Even at this late stage, the actions of the trust, servicers and depositors are opaque to regulators and investors.
Hat tip to Frank Pasquale for this item, and for his analysis here--which includes the following:
Adam Levitin argues that most legal observers are slow to recognize how bad things have gotten, because they believe “there’s no way there were massive screw-ups because thousands of top Wall Street legal minds were working on securitization deals.” Levitin responds: “the best legal minds in the country weren’t doing diligence on endorsements on securitization deals.”