Allstate said that starting in 2003, Countrywide quietly decided to boost market share and ignore its own underwriting standards by approving any mortgage product that a competitor was willing to offer, in a "proverbial race to the bottom."
Countrywide then passed on the added risks to investors who bought debt backed by the mortgages, Allstate said.
Read more in Reuters.
1 comment:
On the other hand you'd think the underwriters of the securities would have done due diligence and looked more closely beyond the reps and warranties. Isn't the security business kinda like "trust but verify"?
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