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Problems And Reforms In Mortgage-Backed Securities: Handicapping The Credit Rating Agencies, Franz P. Hosp

Franz P Hosp V

Here we go again - another financial mess with credit rating agencies in the cross hairs. This is nothing new. Over the last four decades, credit rating agencies have been associated with several major financial disasters: the bankruptcy of Penn Central Transportation Company in 1970, the bankruptcy of Orange County in 1994, the Asian financial crisis in the late 1990's, the bankruptcy of Enron in 2001, and the bankruptcy of WorldCom in 2002.

Currently, the United States is suffering from an economic crisis precipitated largely by the deterioration of mortgage-backed securities. The process of securitizing mortgages is complex and involves …