Home > Uncategorized > Mortgage Crisis Blame falls on Who?

Mortgage Crisis Blame falls on Who?

The mortgage crisis has been the topic of discussion on televisions for the past three years, but who is to blame for the mistakes?  The lenders for giving out loans to consumers who they knew weren’t capable of affording the payments?  The consumers for appling for the loans using stated income that was incorrect?  Rating companies for over rating securities backed by second mortgages?  Wall Street for packaging them(loans) up and selling them in an aggressive market?  The list goes on and on with parties involved and the roles the contributed to the mortgage bubble.  The article takes a look at rating companies for over rating securities backed by second mortgages.  The two compaines mentioned in the article are Moody’s and S&P rating agencies which together processed 2/3 of the issues backed by ultra risky second mortgages.  In the last year a new service has came to makret that ables you to value the mortgages backing the securities.  When rating agencies make rating mistake investors lose money.  Only after the money has been lost do the companies change the rating on the securities.  The rating agencies say they made a mistake and state they just stated an opinion that is protected under the first admendment.  Since the start of the crisis S&P has taken action to toughen its standards and completly elimanited securities backed by second mortgages.  It might not be clear to who is exactly responsible for the crisis.  It could be a number of people, compaines, or even countries that are to blame.  There has to be steps taken to assure that is event will never happen again and those who were responsible be punished for their actions. 


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