Investors who buy mortgage-backed securities shouldn't be shielded from lawsuits by homeowners who are placed in abusive or predatory loans, consumer groups told lawmakers this week. In the latest hearing on the troubled subprime mortgage lending industry, members of the House Financial Services Committee on Tuesday turned their attention to the securitization of mortgage loans for sale on Wall Street. Critics say the demand for mortgage-backed securities backed by subprime mortgage loans led originators to loosen their underwriting practices, with a resulting increase in delinquencies and foreclosures. But those engaged in the business of pooling and securitizing mortgage loans say that making investors liable for the practices of loan originators would chase investment capital out of th...
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