Father of Mortgage Backed Securites Lewis Ranieri: Securitization is Not the Villain

Ahhh but I say yes it is.

He claims that the abuse of securitization is to blame. Well, I say if it is abusable, then securitzation IS to blame.

“Securitization is not the villain. Abuses in securitization are to blame,” Mr. Ranieri wrote.

In Mr. Ranieri’s view, the practice he invented wasn’t the culprit in the subprime mess.

They were the homeowners who treated their homes like ATMs; the unscrupulous lenders who sold mortgage loans that weren’t designed to be repaid; the speculators; and the Wall Street firms and Fannie Mae and Freddie Mac, who gobbled up bad loans.

Check out the letter to sent to our “administration” below…




Ranieri Letter to Obama Administration – Securitization is not the Villain
[scribd id=34895046 key=key-fqilzd9bukgcqyf9v9c mode=list]

4 Responses to “Father of Mortgage Backed Securites Lewis Ranieri: Securitization is Not the Villain”
  1. Virginia @ Ferrer says:

    Michael – Just to make sure it gets to the White House, here’s the site:


  2. Michael says:

    “I’ll tell you a fact,” says Ranieri. “The Bank of America (MBO) deal was a legal investment in only three states. I had a team of lawyers trying to change the law on a state-by-state basis. It would have taken two thousand years. That’s why I went to Washington. To go over the heads of the states.” Liars Poker.

    “‘If Lewis (Ranieri) didn’t like a law, he’d just have it changed,’ explains one of the traders. Liars Poker.

    President Obama: If you take any advice from this man at all it should be to roll back the laws to exactly what they were before he “went to Washington.” While you’re looking back in that era check out then Fannie Board of Directors member and now lobbyists — and name partner in the firm that defended and is again defending Florida’s highest volume foreclosure filer — Republican mega-lobbyist Albert Cardenas.

    Since Raneiri specifically addresses these two institutions let’s see what the book has to say about his involvement:

    “Raniero & Co. intended to transform the “whole loans” (regular mortgages) into bonds as soon as possible by taking them for stamping to the U.S. government. Then they could sell the bonds to Salomon’s institutional investors as, in effect, U.S. government bonds. For that purpose, partly as the result of Ranieri’s persistent lobbying, two new facilities had sprung up in the federal government alongside Ginnie Mae. they guaranteed mortgages that did not qualify for the Ginnie Mae stamp. the Federal Home Loan Mortgage Corporation (called Freddie Mac) and the Federal National Mortgage Association (called Fannie Mae) between them, by giving their guarantees, were able to transform most home mortgages into government-backed bonds. The thrifts paid a fee to have their mortgages guaranteed. The shakier the loans, the larger the fee a thrift had to pay to get its mortgages stamped by one of the agencies. Once they were stamped, however, nobody cared about the quality of the loans. Defaulting homeowners became the government’s problem.

    It wasn’t written for this purpose, and when released people focused more on junk bonds, but anybody who wants to know how the mortgage mess we have today needs to read Lewis’ Liars Poker.

    As for accountability, how about taking some yourself for a change Ranieri?.

  3. Virginia @ Ferrer says:

    30 years ago you couldn’t sell securitized mortgages to Russia, China and Saudi Arabia. 30 years ago the SEC would have had tighter controls on investment bankers. 30 years ago banks would not have bifurcated or lost the promissory notes. Yes, you can blame securitization and deregulation of starting in 1982, 1994 and 1999. How dare you blame homeowners when they were solicited by phone, television, radio, US mail and Internet to refinance, add equity lines and “maintain” their credit for the purpose of carrying more credit. It was heavily promoted that “to spend” was good for the economy. Where were you every Christmas when the news focused on the retail shopping figures?!

    Wall Street greed and lack of competent SEC oversight, examination, enforcement and lack of a sense of consequence along with the creation of a financial anti-trust monopoly merger called MERS is at the crux of the blame game.

    Mr. Ranieri – let’s ask America if they want foreign (international) investment in their mortgage system. With the potential for 60 + million American securitized properties to be controlled by Russia, China or Saudi Arabia – you may find that Americans do not want their mortgage loans to be deregulated any longer. Americans are sick of the foreclosures and bankruptcies caused by the financial fat cats – that feed the inhumane MERS and Wall Street machine.

    H.R. 4173: Restoring American Financial Stability Act of 2010 aka “Wall Street Reform Bill.” Section 9306 – Directs the HUD Secretary to study and report to Congress on: (1) the root causes of home loan defaults and foreclosures, including the role of escrow accounts in helping prime and nonprime borrowers to avoid defaults and foreclosures; and (2) the role of computer registries of mortgages, including those used for trading mortgage loans.

    Congress needs to immediately place a moratorium on foreclosures – by this Sec. 9306 alone… somebody understands MERS … no one else other than MERS is doing more than 60 million computer registries of mortgages.

    Congress needs to immediately:
    2. APPOINT A RECEIVERSHIP ON MERS & MERScorp (there are enough lawsuits to justify this now);

    GOALS – due to the bank fraud and predatory lending – the following penalties in lieu of being sued for anti-trust, fraud and collusion:

    1. All primary loans made between 1996 – 2010 are mandated to be reduced to 2% for 30 years;
    2. Loans must be of market value – or reduced to meet market value:
    a) Government financed and approved appraiser value based on current market sales, and
    b) judicial review and approval of appraised value;
    3. All 2nd mortgages stripped (removed – we do this in bankruptcy for Ch. 13);
    4. All back payments and penalties, attorneys’ fees and costs forgiven / removed;
    5. No “non-judicial foreclosures” for MERS or MERS members.

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