I just remembered some other comments from the broadcast. Campbell was wrong when he said lenders don’t have the liability for loans-gone-bad. Some lenders keep some loans in-house. Washington Mutual keeps a lot of loans in-house, as we discussed on a thread several weeks ago, and is recording $1 billion (?) of income on interest on those loans, interest it has not received and may never receive. Another factor is that banks are on the hook for loans they sell for a certain time period, depending on how they write the contract with the MBS purchasers. Today I just read in the OC Register that “New Century … said more borrowers are missing early payments, forcing the company to buy back more loans that it sold to investors.”
He questioned the sudden wrapping up of the Fannie Mae investigation, surmising that there was too much bad stuff to be found in the books.
If the Democrats gain control the House, how many investigations will they instigate? Will we see independent audits of Fannie Mae (and the Iraq war too)? I sure would like to get to the bottom of the problems with the GSEs.
