CHAIN OF BLAME
How Wall Street Caused the Mortgage and Credit Crisis
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for detailed profiles of the authors.
Paul Muolo executive editor of National Mortgage News, the leading independent trade publication of the residential finance industry. He also has a popular blog titled What We're Hearing
Matt Padilla is a business reporter for the Orange County Register, a newspaper reaching close to 300,000 households in Southern California. Matt also has a popular blog titled Mortgage Insider.
... Something had gone awry. A million or so people had lost their homes to foreclosure. Two or three million would follow in their path by the end of the decade. It wasn't just housing and mortgages that were ailing. It seemed as though the nation was getting hit from all different directions: rising energy and commodities prices, falling home values, banks pulling credit lines of all sorts including commercial and student loans. The mortgage virus had spread, infecting the entire body. It was as though the U.S. economy, which had burned so brightly during the Bush years, was a mirage. Angelo had been wrong. The capital markets -- Wall Street -- had failed us. This is the story of how it happened.
Read the full introduction...
What readers are saying about Chain of Blame:
More reader comments
- "I just finished it. Because I am in the investment business, I knew part of the story, but you filled in the blanks and gave me the color I needed to better understand how we ended up in this mess. Thanks for such a great read." -- Tom Johnson, Managing Director, Timberland Investment Resources, LLC
- "Just wanted to say that Iíve read your book along with two others regarding the current crisis and I have to say your book definitely is the larger of the three books and has lots more pages than the others. Seriously, almost read the damn thing front to back in one sitting and enjoyed every line of it... congrats!"
- "I just completed "Chain of Blame'' which I found most interesting and well documented. Your overall premise, that greed and the quest for profits brought about the mess, is dead on." -- Whitney O'Keeffe, Augusta, Ga.
Chain of Blame chronicles the subprime meltdown from its inception until the book went to press in early June of 2008. Alas, the crisis continues. These are some key events that happened recently:
More news updates
- March 23, 2009 -- The Treasury Department on Monday unveiled two separate programs for the removal of more than $500 billion in toxic private-label mortgage-backed securities and bad real estate loans from the balance sheets of financial institutions. Both initiatives involve the participation of private investors willing to partner with the federal government, which is putting up financing and 50% of the capital for the these public-private partnerships. Under the new effort, federally insured depositories can sell troubled real estate loans into pools that the Federal Deposit Insurance Corp. will auction off to the private investors. Treasury and private capital will provide equity financing and the FDIC will provide guaranteed debt financing issued by the public-private investment funds. The second program is designed to remove formally AAA-rated residential and commercial MBS from the balance sheets of banks and other financial institutions. However, Treasury and the Federal Reserve Board are still working the details of this program which will provide non-recourse loans to investors willing to purchase these "legacy securities" and employ a long-term buy and hold strategy. "Haircuts will be determined at a later date and will reflect the riskiness of the assets provided as collateral. Lending rates, minimum loan sizes and loan duration have not yet been determined. Asset managers selected by the Treasury and FDIC will oversee the public-private investment funds. --National Mortgage News
- October 25, 2008 -- A handful of banks announce they will sell $25 billion of preferred stock and warrants to the Treasury Department as part of the "Troubled Asset Relief Program" which means these lenders have been partially "nationalized" by Uncle Sam. The latest round of banks giving ownership stakes to the Treasury include: Capital One Financial Corp., and SunTrust Banks. The TARP program was made operational by the $700 billion capital markets/mortgage bailout bill signed into law by President Bush in early October.
- October 21, 2008 -- Led by the ranking minority member on the House Financial Services Committee, 28 Republican members of Congress ask the Justice Department to include Fannie Mae and Freddie Mac in their targeted probe into mortgage fraud. The 28 also want to know if the government is looking into the 'Friends of Angelo' program where certain elected officials, past and present GSE employees, and others, received breaks on mortgages that were funded by Countrywide Home Loans, the brainchild of Angelo Mozilo, a central character in "Chain of Blame."