How Ratings Agencies Built the Foundation of the Financial Crisis

It’s been clear for a long time that the decimation of the U.S. economy couldn’t have occurred without the ratings agencies that were charged with determining how risky all of those mortgage-backed investment products might be.  And, since it was very hard to believe that agencies which had successfully performed this role for decades had simply suddenly forgotten how to …

California AG Brown Reaches $2 Billion Settlement With Wells Fargo on Risky ARMs

Via National Mortgage Professional Magazine. Attorney General Edmund G. Brown Jr. has announced that Wells Fargo has agreed to provide loan modifications worth more than $2 billion to thousands of California homeowners with “pick-a-pay” loans and to pay an additional $32 million to thousands of borrowers who lost their homes through foreclosure. None of the loans were made by Wells Fargo. …

More Extend and Pretend: HUD Offers $1 Billion of Subprime Teaser Loans

Another must read post by Yves Smith over at Naked Capitalism.  Yves examines the Administration’s offer of $1 billion in zero-interest loans to help homeowners.  One choice excerpt from her post: How is this supposed to help borrowers? Seriously. This is the government equivalent of a subprime teaser loan. But this is even worse. First, teaser borrowers paid at least a …