Bad Blood Over Bad Mortgage Loans

by Mike Bevel,

CollectionIndustry.com

Wall Street, never one to shy away from finger pointing, is blaming banks for the mess created by mortgage defaults.

Of course, Wall Street kept its fingers safely pointed downward during the best of the housing boom, when mortgage businesses and Wall Street itself got richer than Croesus. There was a frenzy of loan buying, repackaging, and reselling, driving mortgage-backed securities from $184.5 billion in 2000 to nearly $1 trillion in 2005, and generating more than $1 billion in fees last year.

Now that the frenzy is slowing, and the real estate tide is ebbing, so to speak – there’s a mess left behind. Hence, Wall Street’s finger-pointing.

BusinessWeek Online takes a look at the various factors, and weighs in on which side of the finger Wall Street should be facing.

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