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Are you saying then that the originating bank doesn't even have a the note underlying the mortgage?

The note has been sold half a billion times, and, in the process, a lot of these notes have been lost or even destroyed.

I understand that there is slicing and dicing, but I'd think that the originating bank actually has the note.

But the actual banks -- as Krugman calls them, the "big marble buildings that we think of when we say 'bank'" -- had very little to do with giving out mortgages.  They were buying and selling mortgage-backed securities, but I believe the money for the actual mortgages, especially the high-risk ones, was coming from investors, brokers and other elements of the shadow banking system.

After all, who needs real banks when you have Angelo Mozilo?

(facepalm)

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Tue Mar 3rd, 2009 at 07:45:46 AM EST
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