Lawsuits Lining Up For Mortgage Insurers
Regular readers may remember I brought up the possiblity of Fannie Mae being sued for "cherry picking" mortgages. Maybe the lawyers will have more of a say. From Reuters we hear of legal action brought against MBIA, which is 1 of 8, I think.
And MarketWatch informs us that Calpers wants some money back from AIG. It can't be good when the ex-boss takes the fifth. Will we hear of suits against Franklin Raines and the GSE's soon?
2 Comments:
Just wait until there are losses in the portfolio, then the lawsuits will start flying. Right now everything is fine as the losses are minimal (if any) as the bubble lives. When it bursts, that is when things will get nasty and some very interesting questions are going to get asked and answered.
This is just like the dot com boom was, where people started to question the objectivity of the companies doing the ratings and IPOs, once called investment banking, but soon came to be known as promoting.
The only difference then was nobody was leveraged, so losses where prepaid. This time everone is leveraged and the losses get paid in the future. Ouch.
anon,
Did you see the losses at Calpers? Huge, and thats just the stock. Wait till the MBS's head south.
It is like the tech bust; people are starting to question the generally agreed wisdom. Thanks for the comment...Ben
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