Tuesday, February 27, 2007

Hilarious statement of the day

From an excellent post by Richard Benson at PrudentBear.com titled "Subprime Titanic Hits Iceberg: Wall Street Abandons Ship" comes this statement:

"The securitization mortgage business relies on trusting the mortgage brokers and bankers, who make representations on aspects of loans and borrower quality."

Bwahahaha......that's enough to make me roll on the floor with laughter.

Benson elaborates on the reality of this business:

The subprime market is overloaded with bad loans that have effectively smashed holes into the hull of this financial ship. It has been surprisingly easy for people buying a new house to borrow hundreds of thousands of dollars by simply telling the bank how much money they make -- without any proof. It's called a "stated income" loan, but many people inside the housing industry call it something else: a “liar loan” or a “NINA” (no asset, no income verification). Forty percent of the subprime market (about $400 - $500 billion of loans), is made up of these loans. At best estimates, half of all subprime mortgages had no income verification. This is no small problem!

No kidding....

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