Editor’s Comment: “Reckless?” No, it was intentional. And THAT lies at the heart of the media and government perception of this entire securitization scam. The worse the loan, the more money they made. By insuring it for 100 cents on the dollar they received total payback, plus they probably got the honor of foreclosing on the home, when they never funded or purchased the loan in the fist place. Since they were not the creditor, they were neither entitled to foreclose nor to receive insurance proceeds which should have gone to investors. But the investors are probably long gone having settled their claims with the investment banker that sold them bogus mortgage bonds.
On a side note, I have read the Master contract with Fannie and Freddie several times and I cannot tell if the agency was giving a guarantee of the bond given to investors or the loan, or…
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