What credibility can we give to S&P after they rated sub prime credt dflt swaps AAA?!

[52ndStreet]

I would think after Standard & Poors rated the recent sub prime mortgage derivative
swaps as being AAA!, and then to have these same swaps be worthless,how can they now
rate the United States government as being AA?!

I would think many of these "Financial ratings" companies ,Moodys, and Standard & Poors
ratings can not be taken seriously , after the recent sub prime mortgage derivative ratings fiasco.!!??

If any thing the United States should have been downgraded a long time ago.!!?$
But who can accept Moodys and Standard & Poors ratings as legitimate, after the Sub prime mortgage derivatives disaster!!??

I am sorry but both companies have lost all credibility. And should be rating any countries , or anything as far as I am concerned.!!
These ratings companies are one of the reason why the U.S. is in this economic mess.!!?
Your opinions.

 

[waltky]

Mortgage scandal goes back further to late `90's...

Robo-signed mortgage docs date back to late 1990s
Sep 1,`11 - Counties across the United States are discovering that illegal or questionable mortgage paperwork is far more widespread than thought, tainting the deeds of tens of thousands of homes dating to the late 1990s.

The suspect documents could create legal trouble for homeowners for years. Already, mortgage papers are being invalidated by courts, insurers are hesitant to write policies, and judges are blocking banks from foreclosing on homes. The findings by various county registers of deeds have also hindered a settlement between the 50 state attorneys general who are investigating big banks and other mortgage lenders over controversial mortgage practices. The problem of shoddy mortgage paperwork, which comprises several shortcuts known collectively as "robo-signing," led the nation's largest banks, including Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., and other lenders to temporarily halt foreclosures nationwide last fall.

At the time, "robo-signing" was thought to be contained to the affidavits that banks file when a mortgage is issued and somebody buys a house. The documents are used to prove they have the right foreclosure if the homeowner isn't making mortgage payments. Companies that process mortgages said they were so overwhelmed with paperwork that they cut corners. But now, as county officials review years' worth of mortgage paperwork, in some cases combing through one page at a time, they are finding suspect signatures - either signed with the same name by dozens of different people, improperly notarized or signed without a review of the facts in the paperwork - on all sorts of mortgage documents, dating as far back as 1998, The Associated Press has found.

"Because of these bad titles, property owners can't prove they own the properties they think they bought, and banks can't prove they had the right to sell them," says Jeff Thigpen, the registrar of deeds in Guilford County, N.C. In Guilford County, where Greensboro is located, a sample of 6,100 mortgage documents filed since 2006 turned up 74 percent with questionable signatures. Thigpen says his office received 456 more documents with suspect signatures from Oct. 1 through June 30. The suspect signatures found by Thigpen and other registrars around the country were on documents from the banks involved in the temporary foreclosure halt and others.

Widespread robo-signing that stretches back a decade or more could create problems for homeowners. Regulators have so far not asked lenders to clean up the potentially millions of suspect documents filed in the past decade or earlier. That troubles some banking experts, including Sheila Bair, who until early July was chairwoman of the Federal Deposit Insurance Corp. "We do not yet really know the full extent of the problem," Bair said in written remarks to the Senate Banking Committee. She and others have called for a comprehensive study on the extent of the fraudulent signatures in mortgage documents. If documents with robo-signed signatures are challenged in court, judges could question the ownership of the properties, says Katherine Porter, a professor at University of California Irvine School of Law and an expert on consumer credit law. The consequences extend to homeowners in good standing when they try to sell.

MORE

See also:

US 'to sue a dozen banks over housing bubble mortgages'
2 September 2011 - Goldman Sachs is expected to be one of the banks facing legal action

The US is planning to sue more than a dozen major banks for misrepresenting the quality of mortgages they sold during the housing bubble, the New York Times reports. The Federal Housing Finance Agency will argue that the banks should have known the securities were not sound. Bank of America, JPMorgan Chase, and Goldman Sachs are to face action, the newspaper quotes sources as saying. The suits could be filed as early as Friday, it adds.

The Federal Housing Finance Agency - which oversees mortgage giants Fannie Mae and Freddie Mac - blames the banks for failing to perform adequate checks on the quality of mortgage securities they sold on to investors before the financial crisis in 2008. Fannie Mae and Freddie Mac lost more than $30bn (£18.5bn), partly because of the deals, and had to be bailed out by the government. The suits follow subpoenas the finance agency issued to banks last year, according to the newspaper.

The BBC's Marcus George in Washington says this is the latest of a number of lawsuits against financial institutions who were involved in the practice of issuing mortgage-backed securities. However, some executives say the losses were made because of the wider economic downturn. Others fear further litigation against banks could damage America's fragile recovery, our correspondent adds.

http://www.bbc.co.uk/news/world-us-canada-14758677