enjoy a title insurance blog - what? are you crazy? ;)

Diane,

This might strike you as a bit strange, but I enjoyed visiting your blog.

Who would have thought I would visit a blog about title insurance?

I stumbled on your blog when I was researching the term "successors and assigns". I was interested in the term because I was sort of skimming through the United States Code. Right from the get go, the USC defines terms, one of which is "company". This makes a lot of sense to me as a lot of arguments have to do with definitions. Here is the page where I ran across the term "successors and assigns": http://www.law.cornell.edu/uscode/html/uscode01/usc_sec_01_00000005----000-.html

When I read that, I thought, what does that mean? I googled the term and found your very clear discussion of the term.

While I was at it, I read some of your observations about how big banks are in trouble with their bad loans, which in turn appears to be based on taking some shortcuts in making loans. You seem to cite the failure to do simple lien searches as contributing to the overall problem.

Of course, the financial crisis was caused by lots of specific actions, but all have one thing in common: greed blinding everyone to the risk. The perfect loan would have no risk. Sad to say, life is all about risks. So when the bankers and others in financing came up with things like credit default swaps and collaterallized debt obligations, they were just fooling themselves. A piece of paper protecting you from something bad happening is only as good as the person or company backing it. There is always a counterparty to every financial derivative. If the counterparty is corrupt or broke, so is your financial derivative.

Anyway, I enjoy your very informal and chatty way of expressing yourself.

Regards,

Jack 

Hi, Jack and thanks for reading and taking the time to comment.  You are correct that life is all about risks.  When the traunching of mortgage backed securities was developed, we had in place good systems of checks and balances in risk analysis and due diligence.  The representations and warranties on which the system was built should have worked.  It's a bit like construction.  The engineering can be right but if the contractor doesn't follow the plan, cutting corners and using less than adequate materials, well then you have a disaster in the making.  Good quality control programs would have stopped it all early on.  Such programs were developed and mandated by FNMA, FHLMC, FHA & VA but the implementation was flawed and that was the ultimate weak link. 

The industry is recovering and rediscovering good practices. It's an honorable field again.  ;)

Diane