International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Thursday, August 21, 2014

How One “Sack Of S**t” Mortgage-Backed Security Came To Define The Financial Crisis

The history of SACO 2006-8, as told through court documents dating back more than six years, provides a view into how the mortgage-backed security industry was built up and spectacularly collapsed. For JPMorgan, it has become the mortgage-backed security from hell.

Last week, JPMorgan Chase’s costly legal troubles took another step toward completion when trustees for 311 mortgage-backed securities sold by the bank or inherited through acquisitions prior to the financial crisis agreed to a $4.5 billion settlement. Another 14 got an extension to still consider the deal, while five trusts wholly rejected the settlement, leaving open the option for them to continue litigation against the bank. 

Read the full story on Buzz Feed News 

Read the SACO 2006-8 "Aaa" Moody's Rating and later Moody's rating actions as this swirled down the drain

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