I'm actually going to take a shot at understanding more of this issue than just the sound bites that are in the headlines. Wish me luck!! I've just started reading "Chain of Blame: How Wall Street Caused the Mortgage and Credit Crisis" by Paul Muolo and Mathew Padilla.

I'm ten pages into it and I'm already very glad, once again, that I got my mortgage through a local S&L that does not sell its mortgages. I'm not sure there even needs to be a secondary mortgage market; who are the beneficiaries of it, besides the financial industry?!

Yeah, I'll be honest in that I don't quite get the selling of mortgages. I mean, on the one hand, it makes sense so the banks have fresh 'capital' for more loans. But, it's no longer a problem when people make bad loans--they just sell them to some sucker, etc.

We got our mortgage, just this spring, though a credit union. We managed to get ours as the bottom was sort of falling out of the mortgage market, but things have gotten way worse since then. My sister had a house in escrow for over 3 months, with the mortgage company making one excuse after another for delaying closing/approval of the house. Seriously. the house had 'non-standard paint' colors (aka murals). It was a forclosure they bought at a great deal, but needed a lot of work. very strangely, my family did all the work to the house while it was in escrow (with the owning bank's permission, of course, and the premise that my family could take anything like floors/windows/doors they installed back if things fell through). Eventually, the mortgage broker that my sister found through lending tree just said 'no', and she had to fall on my uncle for financing. The same evil uncle who's kicking mom/sister/grandma out of grandma's current residence. Things are written up so the deed is in my families name, payments go through someone else, etc, but it makes me nervous. My sister needs to refinance within 18 months or something to a regular mortgage.

Anyways, she should have reported the mortgage broker a dozen times for bad practices. And she should have switched. But no one ever listens to *my* advice! I'm glad things worked out, and they're living in a house they can't be kicked out of, where they can legally have their horses/goats/dogs/chickens (seriously, I can't beleive my family gets chickens and I don't)

Sorry, way off topic.

Yeah, but that's a great way for banks to overextend themselves -- and if they're writing so many mortgages, how much do they know about each property and each mortgagee?

I got my mortgage from a neighborhood S&L that, honest to pete, had a mortgage department that looked like it was stuck in 1970. The mortgage banker showed me a vault that was filled with file cabinets and said proudly, "There are our mortgages." It was not as easy to qualify for a mortgage loan from this S&L as it was at many larger banks.

Several years later, the S&L was sold to Midamerica Bank, which was then sold to National City Bank. But my mortgage, which I was able to re-fi into a 15-year loan, was not sold. If it ever is, I will go to another local bank and establish it there, if at all possible. But since it's not only a short mortgage, but a cheap one, I doubt that it will ever get "bundled" and sold.

And it's totally wrong that your family gets to keep chickens and you don't!

Argh! Is that crap still going on? I was wondering about you the other day and how things were going...

You'll have to let me know what you think of the book - it's such a complicated, tangled mess. A house of cards - I'll be interested to know if you think it is insightful...

I'm about a third of the way through it and I'm enjoying it so far. It's very well done; it reads like a novel.

The thing is, I DON'T think that secondary markets for mortgages are anything other than an opportunity for money to make more money; in that respect I see the authors' premise, which is that Wall Street has caused this crisis.

I'm old enough to remember when only banks and S&Ls -- depository institutions -- made loans, and made them by pooling their deposits. They didn't buy and sell money. And when you have to base a loan on the collateral that you hold, it's a different proposition from being able to buy and sell bundles of anonymous CDOs.

Kind of ironic that I make my living in the financial industry.

Yeah, my sister, mother, and grandmother moved into the house labor day weekend. So they definitely have a place to live, even though poor old grandma is definitely confused. My aunts are heartless (which is why they were not invited to my wedding).

The book sounds really interesting I will have to pick it up

It really gave me a good foundation for understanding the current mess. Maybe it will be out in paperback soon, and more affordable.