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Felix Salmon has a fascinating post today on the ever expanding mortgage foreclosure scandal. His take goes beyond the foreclosure problems themselves, though. The background is this: back in the glory days, when banks bought up mortgages by the millions to repackage into MBS and CDOs, they’d hire a firm (usually Clayton Holdings) to do a spot check of the quality of the mortgages. Typically, Felix says, the spot check would show that upwards of half the mortgages had underwriting problems, but instead of rejecting the entire pool the bank would just reject the mortgages that had been spot checked and then negotiate a lower price for all the rest of them:

This is where things get positively evil. The investment banks didn’t mind buying up loans they knew were bad, because they considered themselves to be in the moving business rather than the storage business. They weren’t going to hold on to the loans: they were just going to package them up and sell them on to some buy-side sucker.

….Now here’s the scandal: the investors were never informed of the results of Clayton’s test. The investment banks were perfectly happy to ask for a discount on the loans when they found out how badly-underwritten the loan pool was. But they didn’t pass that discount on to investors, who were kept in the dark about that fact.

So in addition to investment banks being at risk because they screwed the pooch on title transfer paperwork, which might mean that bondholders can force them to repurchase the mortgages, they might also be at risk because they knew the mortgages were crappy and failed to disclose that to the bondholders. Result: lots of lawsuits and, potentially, lots more crappy mortgages on the books of our biggest banks. Stay tuned.

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Minority rule, corruption, disinformation, attacks on those who dare tell the truth: There is a direct line from what's happening in Russia and Ukraine to what's happening here at home. And that's what MoJo's Monika Bauerlein writes about in "Their Fight Is Our Fight" to unpack the information war we find ourselves in and share a few examples to show why the power of independent, reader-supported journalism is such a threat to authoritarians.

Corrupt leaders the world over can (and will) try to shut down the truth, but when the truth has millions of people on its side, you can't keep it down for good. And there's no more powerful or urgent argument for your support of Mother Jones' journalism right now than that. We need to raise about $450,000 to hit our online fundraising budget in these next few months, so please read more from Monika and pitch in if you can.

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