Greenspan to testify to FCIC in April
Why wasn’t action taken earlier to tighten lending standards? Was Greenspan concerned about the “widespread” innovation in the mortgage industry (automated underwriting, reliance on FICO scores instead of the 3 Cs – creditworthiness, capacity, and collateral, agency issues with the widespread use of independent mortgage brokers, expanded securitization, non-traditional mortgage products, etc.)?
The hearing will focus on the explosion of subprime mortgages, and the complex securitizations that Wall Street engineered from those loans…
Citigroup Inc. officials also will testify. Citigroup was a big player at all levels of the subprime securitization chain, and the commission is expected to examine the company’s activities as a case study of what went wrong.
