Bankers sold oregano as weed

They don’t care that these mortgages wouldn’t have been available in the first place if the banks hadn’t found a way to sell oregano as weed to pension funds and insurance companies.

Matt Taibbi just made me snort laugh. I know someone who actually did cut his weed inventory with oregano to boost profits. The comparison is apt. That’s also why I never started smoking weed; you never knew what was in it.

Taibbi’s latest Rolling Stone piece Courts Helping Banks Screw Over Homeowners is a nice introduction to how this foreclosure crisis is playing out in Florida. He also gives some background about how we got here. Hint: it involved lots and lots of fraud on the part of mortgage lenders and ratings agencies.

We can slam borrowers all we want, but when most people buy a house, they are not considering the entirety of the marketplace. Few people outside of the finance and real estate industries actually pay attention to what happens in them. I probably pay more attention than your average low-wealth American not employed by the industry, and still had no idea just how f*cked the marketplace was. So imagine just how little most people knew when they bought. And that’s what’s particularly disappointing about the lack of a public outcry. As Taibbi put it:

They don’t care that the Countrywides of the world pushed borrowers who qualified for safer fixed-­income loans into far more dangerous adjustable-rate loans, because their brokers got bigger commissions for doing so. They don’t care that in the rush to produce loans, people were sold houses that turned out to have flood damage or worse, and they certainly don’t care that people were sold houses with inflated appraisals, which left them almost immediately underwater once housing prices started falling.