[Rhodes22-list] Rep. Henry Waxman, D-Calif/Let the games begin.

[DCLewis1 at aol.com]

Robert,
 
You and Hank may be right, but it's my sense that most of those mortgage  
loans are not held by banks, they've been scrutinized and sold to "mom and  pop" 
investors as CMOs.  The banks aren't holding the bag, you or  people like you 
are.  And if you don't think you own any CMOs check your  mutual fund 
holdings, somebody has bought a lot of CMOs (I think  there's more than a trillion $ 
worth outstanding, I could be wrong about that  number).  As you may know, CMOs 
(Collateralized Mortgage Obligations)  are basically packages of mortgages 
that have been sliced and diced and sold  almost like bonds on the debt market - 
the guy left holding the bag when  mortgages default is the guy/gal/mutual 
fund that bought the CMO, not  the bank.  I think most banks and mortgage 
companies make their $  via loan origination fees etc.  I could be wrong, and it may 
vary in  different regions of the country.
 
Banks have risk control officers, they should do fine.  I worry  about mom 
and pop investors.  Dot.com redux?
 
Dave