Monday, November 15, 2004

Fitch Pitches Petulant (Phony) Fit

You can almost hear them singing "neh-neh-neh-neh-neh, we told you so," behind this one:

On Nov. 7, 2004, the Massachusetts Predatory Home Loan Practices Act (the Act) will become effective. This legislation increases the risk of unlimited assignee liability relative to the existing Massachusetts predatory regulations. Because of this risk of uncapped liability, Fitch Ratings will not rate any deals with Massachusetts mortgage loans that are subject to the Act after the effective date.

So the lap-dog rater who stayed curled up and snoozed all the while the mortgage servicing squaliforme Fairbanks Capital stole billions of dollars from consumers stuck with predatory loans now wants to act on behalf of all of the squaliformes. So they take a slap at the Massachusetts legislators by claiming they won't rate mortgage paper because of the protections the state wisely enacted.

Fitch has previously indicated that it will not rate residential mortgage-backed securities (RMBS) transactions which contain loans that are originated in jurisdictions which have enacted legislation that may result in unlimited purchaser or assignee liability for predatory lending practices of an originator, broker or servicer. Thus, as of Nov. 7, 2004, Fitch will not rate any transactions that contain Massachusetts 'high cost home mortgage loans'.

Note from this Honorable Judge: Massachusetts, stick to your guns, dammit! Responsible lenders will fill any real void the squaliformes supposedly leave.

See here, this Court is fed up with Wall Street's and Fitch's utter disdain for the real sources of their revenue, the victims. As in, the borrowers.

When conduits buy loan portfolios and Wall Street sells bonds and then just sits there immune from liability for what their squaliforme partners set up and then passed on to them, they're only helping them keep the scams going. By providing for assignee liability, they might have to look at who they're feeding and what the results could be. And if they didn't like who put the loan together or the predatory terms they could opt not to buy the bonds.

And guess what, pretty soon the squaliformes wouldn't be able to make the predatory loans. And the servicers wouldn't be able to prey on the victims and threaten them into paying billions more than they really should!

Of course, this Court recognizes should those circumstances come about, there would be a corresponding reduction in funds available for the servicer squaliformes to pay Fitch to do the ratings.

So instead of wanting to do something about predatory and abusive lending and servicing, Fitch is all to comfortable with how good the squaliformes have been to them! And they're dutifully providing ammunition for Wright Andrews and his ilk to use to get legislation passed at a federal level to prevent states from acting when Washington bows to the squaliforme altar of financial gluttony without regulation.

Get ready for more and more "news" about the consumers in Massachusetts not being able to get loans.

And if some yahoos in Massachusetts back down to these crooks, they bettter not wander very far out here west of the Pecos. We have an aversion to that type of enabler. Don't want 'em taking up good air, let alone space in the jail. Keeping them away is what cattle prods are for. Usually only takes one or two pokes to be effective. (Leaves a helluva mark. Bet it smarts like all get out.)

The Honorable Judge Roy Bean.

1 comment:

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