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  • http://JeffBoydnoreply@blogger.com Jeff Boyd

    >Always appreciate your comments Isaac. You actually are the only person doing this sort of in-depth commentary I am aware of.

  • http://www.mortgagemarketconsultant.com Harold Barnett

    >Isaac,I agree that the securitizers could have been unaware of breaches in reps and warranties and still have known that the rating agencies were not capable of estimating the risk of loss due to the inadequacy of their models and their use of (often doctored) summary loan data. However, for the various reasons you and others have noted, it certainly appears that the securitizers knew that reps and warranties were being breached and therefore the rating placed on their bonds were overstated. My research on Goldman Sachs shows that the description of risk factors in several 2006-2007 prospectus were right on target in terms of an increased probability of deliquency and default and originator problems with honoring repurchase obligations. Despite knowing how bad the loans were,and the fact that major subprime originators were in financial trouble, Goldman continued to report triple-A ratings to its investors. They used the impremeteur of triple-A ratings to misrepresent the quality of loan pools. As regards the information from Clayton, I read Keith Johnson's written testimony and the Sept article on the hearings from Gretchen Morgenson (that you link). Is the recitation of data in her article from Johnson's spoken testimony or is it somewhere else in the FCIC website?

  • http://www.blogger.com/profile/01953292606699177895 kredit Info

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  • http://www.subprimeshakeout.blogspot.com Isaac Gradman

    >Thanks for your insight. Most of the data Morgenson cites is from Keith Johnson's spoken testimony. In particular, if you follow the link to the video testimony on the FCIC site (http://fcic.themeetingzone.com), you will find Johnson's testimony about the ratings agencies having no interest in Clayton's exception tracking tool starting around the 3:26:30 mark. Testimony about "asymmetric transparency," i.e., how underwriters used the exception reports to bargain down the price of the loans they purchased can be found at the 3:51:00 mark. This testimony could be exhibit A for RMBS bondholders and insurers attempting to prove that breaches of reps and warranties had a "material adverse impact" on the value of particular loans.

  • http://www.subprimeshakeout.blogspot.com Isaac Gradman

    >Thanks Jeff. I always appreciate the feedback and I'm glad you find it helpful. Keep the comments coming!

  • http://www.subprimeshakeout.blogspot.com Isaac Gradman

    >Thanks!

  • http://www.subprimeshakeout.com/2011/12/federal-home-loan-bank-litigation-update-mbs-cases-moving-slowly-but-steadily-ahead-for-fhlbs.html Federal Home Loan Bank Litigation Update: MBS Cases Moving Slowly, But Steadily, Ahead for FHLBs | The Subprime Shakeout

    [...] inception by The Subprime Shakeout and its readers, and since it’s been a year since our last article on this front, we thought it was a good time for an [...]

  • http://chazksolutions.shikshik.org/2013/01/31/fhlb-pennsylvania/ Fhlb pennsylvania | Chazksolutions

    [...] Federal Home Loan Bank of Pittsburgh Scores Important Early …Dec 7, 2010 … In the first substantive decision handed down in any of the five major lawsuits by the Federal Home Loan Banks (FHLB) over RMBS losses, the … [...]