The subprime mortgage mess started it, but now we’re full blown into another problem with a catchy new name: Mortgagegate. And it’s a lot bigger than people think. The paperwork on the mortgages was bad in the beginning, but it’s not just the mortgages. It’s also the tax consequences and title problems.
Many of those mortgages were bundled together and sold as mortgage-backed securities, most of which did very poorly after 2008. If the properties were never properly titled and assigned then the original sale of the securities could be invalid, which could lead to trillions of dollars of securities being forced back on the original seller, what Janet Takavoli calls “the biggest fraud in the history of the capital markets.”
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