White Collar Crime - The Bank Part 5
Part 1, Part 2, Part 3, Part 4
The ratings Agency get paid well by the banks for giving their Mortgage Backed Securities, MBS's a high rating.
AAA, AA, A, BBB, BB, B from left to right.
Right being more risky than left.
If a ratings agency doesnt give the best rating AAA the bank goes to the next agency.. Moodys, Standard and Poor, Fitch.
Take your pick, if you want to get the ratings business give the Bank a AAA.
So the next point we are at is what happens when people start to default on mortgages as interest rates rise and house prices are high also lending is high?
Also what if the properties are not valued correctly in the first place?
If there is negative equity through over valuation?