a) Mortgage issuers tended to be the victims of fraud, not the perpetrators. The people committing fraud were mostly mortgage brokers and and home borrowers.
(Mortgage issuers are now using fraud to cover up lazy paperwork after the fact, but that's a separate matter.)
b) The mortgage market doesn't even come close to being an "unregulated market". While you can dispute the extent to which the regulators played a role, it's indisputable that the regulators were solidly on the pro-bubble side of the fence.
Confused?
re
a)Tell me again, how much money did Angelo Mozilo and Dick Fuld lose due to the mortgage fraud their companies engaged in? Go listen to William K Black on the subject of control fraud, and tell me that the issuers were the victims. Some of the stockholders and bondholders were victims, but the guys who ran the companies made out like bandits.
re
b) "Unregulated" is perhaps an overstatement. Would "substantially less regulated" or "Markets where the regulators regularly turned a blind eye to rampant fraud." work better for you? Greenspan has a lot to answer for, as do the OCC, OTS, and Congress. Go read about the FBI report in 2004 of "rampant mortgage fraud" and the total lack of interest on anybody's part of taking any action on it. Note that they just issued another report that it's still going on.
And if Angelo Mozilo and Dick Fuld hadn't approved of it, Countrywide and Lehman would not have been making liars loans. And if regulators had been doing their jobs, the mortgage brokers originating those loans would have been prosecuted.
a) Mortgage issuers tended to be the victims of fraud, not the perpetrators. The people committing fraud were mostly mortgage brokers and and home borrowers.
(Mortgage issuers are now using fraud to cover up lazy paperwork after the fact, but that's a separate matter.)
b) The mortgage market doesn't even come close to being an "unregulated market". While you can dispute the extent to which the regulators played a role, it's indisputable that the regulators were solidly on the pro-bubble side of the fence.