D.A. Politicians

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Jul 26, 2008 4:47 pm

Note: D.A. doesn't stand for "District Attorney".

 
I had forgotten about this tidbit, when I came across it in the link below.
 
With all the blow-hard posturing by D.A. politicians about subprime mortgages and the associated financial crisis, you might find this as interesting as I did. Also note, this article is a compilation of excerpts from different reputable news services, covering a wide variety of topics (primarily "bear-market" slanted). This particular excerpt is further down the page.
 

"July 21 – Wall Street Journal (Mark Maremont):  “Federal officials heap much of the blame for the subprime mortgage mess on lenders, claiming they recklessly made too many high-cost home loans to borrowers who couldn't afford them.  It turns out that the U.S. government itself was one of the lenders giving out high-interest, subprime mortgages, some of them predatory, according to government documents filed in federal court.  The unusual situation, which is still bedeviling bank regulators, stems from the 2001 seizure by federal officials of Superior Bank FSB, then a national subprime lender based in Hinsdale, Ill. Rather than immediately shuttering or selling Superior, as it normally does with failed banks, the Federal Deposit Insurance Corp. continued to run the bank’s subprime-mortgage business for months as it looked for a buyer. With FDIC people supervising day-to-day operations, Superior funded more than 6,700 new subprime loans worth more than $550 million, according to federal mortgage data.  The FDIC then sold a big chunk of the loans to another bank. That loan pool was afflicted by the same problems for which regulators have faulted the industry: lending to unqualified borrowers, inflated appraisals and poor verification of borrowers’ incomes, according to a written report from a government-hired expert.”



http://www.prudentbear.com/index.php/CreditBubbleBulletinHome