The History of a Countrywide Mortgage

Dan McCrum of FT Alphaville looks at the history of a Countrywide mortgage - read "looks at the sordid history of a crap mortgage bundled by Countrywide into a CDS, and then flushed through the sewer pipes of the collaterization industry).
Its pretty short, but fairly horrific anyhow, replete with fun stuff like

Countrywide spends 2007 struggling to raise funding, and ends up in the hands of Bank of America for $4bn in stock. Two weeks before Lehman Bothers files for bankruptcy in September 2008, Mr & Mrs Nadeau miss their first mortgage payment.

On October 9, 2008, with due sense of timing, Moody’s downgrades 717 securities related to 71 bundles of subprime mortgages issued by Countrywide. Among them is CWABS 06-6 2-A-3, which drops a notch.

A month later the Fed creates Maiden Lane II, which buys a portfolio of mortgage backed securities as part of the bail out of failing insurer AIG for $19.5bn, a little over half of their notional face value.

Moody’s isn’t done yet though. On March 25, 2009, it downgrades CWABS 06-6 2A3 another 14 notches, to junk.

Meanwhile, back in Clay County, Florida the wheels of litigation slowly turn. Bank of America, acting as servicer for all of CWABS 2006-06 gets around to filing a foreclosure suit against the Nadeaus on the last day of 2009.

By April 2010, Moody’s has really got the measure of this stuff. CWABS 06-6 2-A-3 goes all the way down to  Ca, or “highly speculative”, the second lowest of its 21 ratings.

Its pretty bad really, of all the Bad Actors in the story, the ratings agencies have got to be at the top (then again, maybe Countrywide.  Hard to tell the difference - shades of crap y'know?)

Anyhow, go read it...