by Brian Brady
Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL
We interviewed Matt Padilla, author of Chain of Blame- How Wall Street Caused the Mortgage and Credit Crisis. This book, released in May, 2008, details a history of non-prime lending, the S&L crisis, securitization of mortgages, and what went wrong.
Download and Listen to the 45 minute interview here
An excerpt from the book, by co-author Paul Muolo:
He had made this argument before subprime lending began to boom in 2003. He believed it down to his toes — that Wall Street (despite his contempt for it) would keep the housing market honest because the Street controlled the mortgage bond business, where most of the money for home lending came. It was in the Street’s best interests. I wasn’t so sure. I became even less sure when the losses (the nice word being write-downs ) at banks and Wall Street firms topped $300 billion in the spring of 2008. To me and my co – author, Mathew Padilla, something had gone awry. A million or so people had lost their homes to foreclosure. Two or three million would follow in their path by the end of the decade. It wasn’t just housing and mortgages that were ailing. It seemed as though the nation was getting hit from all different directions: rising energy and commodities prices, falling home values, banks pulling credit lines of all sorts including commercial and student loans. The mortgage virus had spread, infecting the entire body. It was as though the U.S. economy, which had burned so brightly during the Bush years, was a mirage. Angelo had been wrong. The capital markets — Wall Street — had failed us. This is the story of how it happened.
Matt is also a business and finance columnist at the Orange County Register, in Southern California and hosts Mortgage Insider Blog.
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