Mortgage Probes Face Big Hurdles

[cal04]

Source: Washington Post

Scrutiny Grows, But Banks' Liability Remains Unclear
The nation's largest banks are losing billions of dollars from the mortgage debacle. But will pain from bad housing bets be compounded by government investigations?

As credit woes sparked by the troubled housing market threaten the broader economy, investigators are trying to determine whether Wall Street investment banks bundled risky loans with good ones without properly disclosing such risk to investors.

Law enforcement officials including those at the Justice Department, the Securities and Exchange Commission and the New York attorney general's office are scrutinizing whether banks and mortgage lenders helped fuel the crisis by misleading investors about dicey housing assets and then covered up losses when the markets turned sour. Government subpoenas are flying, investor lawsuits are mounting, and in the nastiest cases, businesses are pointing the finger of blame at one another.

The tangled system of bank regulation and the challenge of proving that executives intended to break the law when they unloaded bum assets could pose significant hurdles for investigators, current and former government officials say. Many of the assets that tumbled were explicitly marketed as involving borrowers with troubled credit histories, alerting investors that they were high-risk bets.



Read more: http://www.washingtonpost.com/wp-dyn/content/article/2007/12/26/AR2007122601713.html?hpid=topnewsw

[Purveyor]

1. I made my nest-egg during the S&L debacle of the late '80's in the litigation court.

This 'debacle' will make that situation seems like 'child's play'...

[Vincardog]

2. Wish bushitler boy made his billions of the S& L debacle? Who engineered this one?

[SpiralHawk]

3. "Im not worried at all. Got my Swiss bank account. Smirk." - Commander AWOL

"Oooops, almost forgot my republicon propaganda talking point: 'too bad about you little people. Smirk."

- Commander AWOL