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Chain of Blame: How Wall Street Caused the Mortgage and Credit Crisis

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Authors: Paul Muolo, Mathew Padilla
Publisher: Wiley
Category: Book

List Price: ~~$27.95~~
Buy New: $13.97
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Avg. Customer Rating: 4.5 out of 5 stars

17 reviews
Sales Rank: 4665

Media: Hardcover
Number Of Items: 1
Pages: 338
Shipping Weight (lbs): 1.2
Dimensions (in): 9.1 x 6.3 x 1.2

ISBN: 0470292776
Dewey Decimal Number: 332.720973
EAN: 9780470292778
ASIN: 0470292776

Publication Date: July 8, 2008
Availability: Usually ships in 1-2 business days
Shipping: Expedited shipping available
Shipping: International shipping available
Condition: Brand New. 100% money back guarantee. All books shipped from Strand Bookstore, New York City, USA.

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Editorial Reviews:

Product Description
In the summer of 2007, the subprime empire that Wall Street had built all came crashing down. On average, fifty lenders a month were going bust-and the people responsible for the crisis included not just unregulated loan brokers andcon artists, but also investment bankers and home loan institutions traditionally perceived as completely trustworthy.

Chain of Blame chronicles this incredible disaster, with a specific focus on the players who participated in such a fundamentally flawed fiasco. Authors Paul Muolo and Mathew Padilla, well-regarded journalists for National Mortgage News and the Orange County Register respectively, reveal the truth behind how this crisis occurred, what individuals and institutions-from lenders and brokers to some of the biggest investment banks in the world-were doing during this critical time, and who is ultimately responsible for what happened.

Customer Reviews: Read 12 more reviews...

4 out of 5 stars

B-School Professors Should Use It September 1, 2008
Excellent book and worth reading. Beware that it might make you angry just like the energy scandals did a few years ago. Offers considerable insight and information that would be very useful to business schools for their students. Recommended reading for professors to include in their markets and business ethics courses. Kudos to the authors for a well researched and written book.

4 out of 5 stars

Well written story of the mortgage crisis August 25, 2008
10 out of 11 found this review helpful

Do your eyes glaze over when commentators try to describe the financial products that were at the heart of the recent real estate boom? The mortgage boom? This book described the instruments clearly--and gives the reader a great sense of what was fundamentally wrong with the whole process. The title is "Chain of Blame," but there is plenty of blame to go around.

The book is well written and lucid. Nonspecialists can understand it well. I heard talking heads on TV and radio described tranches, REITs, "liar loans," "warehouse line of credit," and so on. The authors describe these terms--and others--clearly and in such a way that the reader can begin to see what had happened--and why the meltdown in the mortgage world should not be seen as so surprising.

It is also the story of clever businessmen and women, who could develop new tools for investment from subprime loans. Subprime loans, simply, are (Page 325): "A loan originated by a lender that is A- to D in quality. Consumers with the best credit ratings. . .are considered 'A' credit quality." In short, loans are being made to purchasers who carry some to a lot of risk. If they can't keep paying their mortgages, the house of cards can fall down. And that is, in short, what happened (although the story is quite a bit more complex than that).

Among the innovators were pioneers such as Roland Arnall (of Ameriquest and Argent) and Bill Dallas (of Ownit Mortgage Solutions). Then, those who adopted practices of the innovators, such as Angelo Mozilo of Countrywide.

The book makes pretty clear that a number of factors contributed to the mortgage problem. Regulators didn't get involved; Wall Street firms ignored the volatile nature of subprime loans in a desire to realize enormous profits; banks bought into the profitable business.

Anyway, if the reader wants a well written, if not overly deep, analysis of the mortgage crisis, this is not a bad place to start.

5 out of 5 stars

Money Crisis August 20, 2008
An easy & engaging read. It connected most, if not all, of
the financial dots for me.

4 out of 5 stars

There is a missing link in this chain August 18, 2008
I really liked this book - it is well written and describes the main actors of the mortgage market meltdown in a very engaging way. Back in the mid-90s I was working as an analyst for a bank that participated in syndicates that underwrote warehousing lines of credit for - among others, for Countrywide - and provided other services for mortgage companies. The authors explain very well how the how the mortgage markets work: from the homebuyer to the (far removed) overseas investor. They point out where the system may (and did) brake and how the unrealistic assumption about ever appreciating real estate market made many quite smart people lose their wits.

So, what we see in the course of the book are a lot of "greedy" business people. However, they did not operate in a vacuum and what is missing in the book is the "greedy" consumer. I'm not taking away any responsibility from unscrupulous mortgage brokers, but they dealt with the consumer that threw caution through the window, too. The "ticking bomb", i.e. ARM resets were described in the loan documents - many just chose to ignore them, basing their "hopes" on the same assumptions as the "savvy" business executives - growing real estate values and low interest rates...Ultimately, shouldn't we all be responsible for prudently managing our finances?

The authors bring an example of foreclosure raved Slavic Village in Cleveland. It is a sad part of the book - but the question comes to mind: why do we need to approach mortgage borrowers like we would easily deceived children?

I think, the book would be more valuable if it addressed this link of the chain, as well.

5 out of 5 stars

"Because thats where the money is" - why crooks rob banks August 6, 2008
3 out of 4 found this review helpful

Well written, well researched and has the juicy stuff too. A broker standing on his desk yelling at the loan reviewers to go faster, faster, faster in approving loans (so he can get his commission). Great background on Angelo Mozila, the king of subprime, and a fun story about Lewie Ranieri, whose Texas employees thought they were getting a mob boss instead of a banker.

It will make you laugh, and make you cry because government has given away the bank to the crooks again. These crooks are in suits and rob all of us with a pen. U.S. taxpayers, investors, and pension funds will be trying to choke down these bad loans and ABSs for a long time.

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