The Epic American Credit and Bond Bubble Laboratory Message Board

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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: mishedlo who wrote (46736)	12/6/2005 3:15:31 PM
From: Ramsey Su	Read Replies (2) of 110194

Mish, CEO of MTG summarized it best a few conference calls ago. He basically asked rhetorically why would a salaried borrower choose to pay a higher interest rate when it takes practically no effort to get a W-2 from the employer? Who is committing fraud? I would say all. There will be lawsuits. The borrowers, the originators, the mortgage brokers, the brokerages who did the loan sales or securitization would all be involved, each blaming someone else because it is now a lose lose situation. Let me give you a scenario. Here is a loan application, Jack and Jill Borrower are both high school teachers in their 30s. The stated income is $185,000. Do you think Jack and Jill have the responsibility of asking themselves - are we sure? Do you think the mortgage broker (or loan officer) have a responsibility of questioning - are you sure? Do you think the underwriter has a responsibility of questioning - are you sure? Do you think the wall street firms brokering the package, as part of their due diligence, have a responsibility of questioning - are you sure?

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