Comments on: The Super Mortgage Market Birth Story: CDOs, Mezzanine, Unrated Tranches, and a Touch of Greed. http://www.doctorhousingbubble.com/the-super-mortgage-market-birth-story-cdos-mezzanine-unrated-tranches-and-a-touch-of-greed/ How I Learned to Love Southern California and Forget the Housing Bubble Sat, 22 Nov 2008 07:01:54 +0000 http://wordpress.org/?v=2.2.2 By: reshmi http://www.doctorhousingbubble.com/the-super-mortgage-market-birth-story-cdos-mezzanine-unrated-tranches-and-a-touch-of-greed/#comment-2779 reshmi Tue, 13 Nov 2007 04:53:23 +0000 http://www.doctorhousingbubble.com/the-super-mortgage-market-birth-story-cdos-mezzanine-unrated-tranches-and-a-touch-of-greed/#comment-2779 Great posting Thanks Great posting

Thanks

]]> By: gael http://www.doctorhousingbubble.com/the-super-mortgage-market-birth-story-cdos-mezzanine-unrated-tranches-and-a-touch-of-greed/#comment-2774 gael Mon, 12 Nov 2007 20:06:04 +0000 http://www.doctorhousingbubble.com/the-super-mortgage-market-birth-story-cdos-mezzanine-unrated-tranches-and-a-touch-of-greed/#comment-2774 How can one support Ron Paul, who as a libertarian would do away with regulation, and at the same time advocate for more transparency in the the real estate market? Wouldn't more transparency require oversight and regulation? Or do I have that wrong? I don't see business voluntarily deciding to be more fair or transparent. I think this country could use a new new deal to help us out of our coming new great depression. But I digress... great post btw. as always How can one support Ron Paul, who as a libertarian would do away with regulation, and at the same time advocate for more transparency in the the real estate market? Wouldn’t more transparency require oversight and regulation? Or do I have that wrong? I don’t see business voluntarily deciding to be more fair or transparent. I think this country could use a new new deal to help us out of our coming new great depression. But I digress…
great post btw. as always

]]> By: Jeff http://www.doctorhousingbubble.com/the-super-mortgage-market-birth-story-cdos-mezzanine-unrated-tranches-and-a-touch-of-greed/#comment-2773 Jeff Mon, 12 Nov 2007 18:45:59 +0000 http://www.doctorhousingbubble.com/the-super-mortgage-market-birth-story-cdos-mezzanine-unrated-tranches-and-a-touch-of-greed/#comment-2773 Unbridled greed is what caused the problem...people living beyond their means. Funny that we look for a quick and easy solution, like we looked for a quick and easy solution to Saddam Hussein. Science and logic doesn't run our society; the millionaires of yesteryear built a country; the millionaires of today sell hedge funds (building nothing). Only thing keeping things afloat are foreigners with an appetite for our debt. When that stops, God help us. Unbridled greed is what caused the problem…people living beyond their means.

Funny that we look for a quick and easy solution, like we looked for a quick and easy solution to Saddam Hussein.

Science and logic doesn’t run our society; the millionaires of yesteryear built a country; the millionaires of today sell hedge funds (building nothing).

Only thing keeping things afloat are foreigners with an appetite for our debt. When that stops, God help us.

]]> By: oilwelldoctor http://www.doctorhousingbubble.com/the-super-mortgage-market-birth-story-cdos-mezzanine-unrated-tranches-and-a-touch-of-greed/#comment-2772 oilwelldoctor Mon, 12 Nov 2007 18:16:32 +0000 http://www.doctorhousingbubble.com/the-super-mortgage-market-birth-story-cdos-mezzanine-unrated-tranches-and-a-touch-of-greed/#comment-2772 Another great story, thanks Another great story,

thanks

]]> By: drhousingbubble http://www.doctorhousingbubble.com/the-super-mortgage-market-birth-story-cdos-mezzanine-unrated-tranches-and-a-touch-of-greed/#comment-2769 drhousingbubble Mon, 12 Nov 2007 17:01:14 +0000 http://www.doctorhousingbubble.com/the-super-mortgage-market-birth-story-cdos-mezzanine-unrated-tranches-and-a-touch-of-greed/#comment-2769 It is hard to discuss a solution when those that benefited from the boom want to do everything in their power to keep it going. The bailout fund, $75 billion worth is nothing more than insurance for the irresponsible lending of multiple years. The fact that Ben Bernanke even mentioned upping loans to $1 million is an attempt to institutionalize bubble prices. So here is a list of a few things that can happen: 1. Prosecute lenders, hedge funds, appraisers, and anyone that is found to have committed mortgage fraud or benefited knowingly from the process. We all know that this started all the way from the top but that doesn’t excuse the end seller of a note from responsibility. [status: currently happening with certain attorney generals] 2. Open up the MLS to public access. What happened after the Great Depression? The SEC came into effect and a separation of powers for banks. More transparency is need. [status: access is getting better with sites like Zillow but still certain localities 3. Do away sub-prime loans. There is a reason for standards. The argument will go that the market should determine what loans are available. I accept this view if there wasn’t this implicit bailout behind it as we are seeing right now. If it was a true free market, weak lending would come back directly to hit anyone who participated in the process with no bailout. [status: small to middle lenders are going out of business. Bigger business is in cahoots with the government and the current course is subsidies to keep them afloat] 4. Separate rating agencies further from the underwriting process of any CDOs. This should be self-explanatory. [status: already in the process] 5. Take away incentives and points from higher risk mortgage products and give incentives for more conventional conforming mortgage products. [status: legislation is already in the process but brokers are fighting tooth and nail for YSP protection] 6. Stronger entry for brokers and agents into the industry. The requirements for either of these professions is too low. You wouldn’t trust someone with your medical health with no training right? Why trust someone with your largest purchase who doesn’t have adequate training? [status: legislation to push for mortgage education requirements] Things are already happening but as this thing took a decade to happen, things will not be resolved overnight. It is hard to discuss a solution when those that benefited from the boom want to do everything in their power to keep it going. The bailout fund, $75 billion worth is nothing more than insurance for the irresponsible lending of multiple years. The fact that Ben Bernanke even mentioned upping loans to $1 million is an attempt to institutionalize bubble prices. So here is a list of a few things that can happen:

1. Prosecute lenders, hedge funds, appraisers, and anyone that is found to have committed mortgage fraud or benefited knowingly from the process. We all know that this started all the way from the top but that doesn’t excuse the end seller of a note from responsibility. [status: currently happening with certain attorney generals]
2. Open up the MLS to public access. What happened after the Great Depression? The SEC came into effect and a separation of powers for banks. More transparency is need. [status: access is getting better with sites like Zillow but still certain localities
3. Do away sub-prime loans. There is a reason for standards. The argument will go that the market should determine what loans are available. I accept this view if there wasn’t this implicit bailout behind it as we are seeing right now. If it was a true free market, weak lending would come back directly to hit anyone who participated in the process with no bailout. [status: small to middle lenders are going out of business. Bigger business is in cahoots with the government and the current course is subsidies to keep them afloat]
4. Separate rating agencies further from the underwriting process of any CDOs. This should be self-explanatory. [status: already in the process]
5. Take away incentives and points from higher risk mortgage products and give incentives for more conventional conforming mortgage products. [status: legislation is already in the process but brokers are fighting tooth and nail for YSP protection]
6. Stronger entry for brokers and agents into the industry. The requirements for either of these professions is too low. You wouldn’t trust someone with your medical health with no training right? Why trust someone with your largest purchase who doesn’t have adequate training? [status: legislation to push for mortgage education requirements]

Things are already happening but as this thing took a decade to happen, things will not be resolved overnight.

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