Clayton Holdings, a company that analyzed mortgage pools for the Wall Street firms that sold them, told the commission on Thursday that almost half the mortgages Clayton sampled from the beginning of 2006 through June 2007 failed to meet crucial quality benchmarks that banks had promised to investors...[They] took this data to officials at Standard & Poor’s, Fitch Ratings and to the executive team at Moody’s Investors Service....If any group of firms deserve the Arthur Anderson fate of corporate execution for bring guilty of murderous behavior, it is the rating agencies. In my opinion, they should be put down like rabid dogs.
Some 28 percent of the loans sampled over the period were outright failures — that is, they were unable to meet numerous underwriting standards and did not have positive factors that compensated for their failings. And yet, 39 percent of these troubled loans still went into mortgage pools sold to investors during the period, Clayton’s figures showed.
---Barry Ritholtz
No comments:
Post a Comment