REMICS | DID THE IRS CAUSE THE FINANCIAL CRISIS?


Justice League

As the dust from the financial crisis begins to settle, we learn that the lack of IRS enforcement of themortgage-backed securities industry bears blame for the financial crisis. The financial crisis began when lenders started making bad loans on a large-scale basis in the late ’90s and early ’00s. Big banks purchased these bad loans, bundled them into trusts, and sold interests in the trusts to investors worldwide. The interests in the trusts are mortgage-backed securities. The investors (financial institutions, pension and retirement plans, insurance companies, state and local governments and individuals) did not know the loans were bad, and paid inflated prices for the mortgage-backed securities. Now that the practices of lenders and banks are coming to light, borrowers and investors are seeking to recover losses through lawsuits. And it is obvious that better practices, as required by tax law and enforced through IRS audit, would have prevented or mitigated those losses.

Mortgage-backed securities are a vital part…

View original post 117 more words

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s