The New York Times printed a short article today.
All it took was a few words to wipe out billions in stock market gains:
Lender Tells Judge It 'Recreated' Letters
By GRETCHEN MORGENSON
Published: January 8, 2008
The Countrywide Financial Corporation fabricated documents related to
the bankruptcy case of a Pennsylvania homeowner, court records show,
raising new questions about the business practices of the giant
mortgage lender at the center of the subprime mess....
Then the Dow Jones Industrial Average plunged over 200 points.
Should the blame lie with mortgage bankers willing to lend money to anyone with a pulse? This situation, of course, could not have happened if some really rich investors were not so eager to buy blocks of lousy mortgages and then sell them to state pension funds, hedge funds, and even Norwegian towns.
But the blame is being placed on poor people who were told over and over again that owning a home is the American dream.
We could also blame real estate speculators who bought homes they just wanted to flip.
Maybe we could blame the Federal regulators that knew all this was happening and did nothing to prevent it.
I prefer to blame the gentleman that worked for Countrywide Financial Corp. (NYSE:CFC) who told me my mortgage loan was a sure thing, no need to see much paperwork, just sign here and here and here.
But you know what? I walked out of his office that day in 2003, without signing the papers. I simply did not like the idea that my mortgage rate could be adjusted up after I signed those papers. If only others had made the same choice I did.