Monday February 11, 2013

In reference to the Feb. 7 editorial, "Poor job, S&P," please allow me to share some perspective on the mortgage ratings scandal as someone who worked as a credit review officer for several banks over the course of a couple of decades. Your readers should understand that this was not a judgment call and that S&P analysts were merely incompetent.

It doesn’t take more than a high school education to realize that a loan where someone puts down 20 percent is less risky than a loan where someone puts nothing or less than nothing down. And lending 100 percent against appraised value in states like California, where there was and is no legal recourse to the borrower on a mortgage, was nothing short of folly.

The continuing sad part in all of this is that the true criminals, the executives who profited from this chicanery though exorbitant salaries and bonuses, will suffer no pain from these suits. That will fall upon the hapless shareholders in these companies, you and I, who own shares through our mutual funds and pension funds.

We just witnessed a similar result with the U.S. government settling of a suit with HSBC over a decade of money laundering for murderous drug cartels of Mexico and Columbia. No one was criminally prosecuted. Only shareholders in HSBC suffered. Same old same old and until the guilty get prosecuted and are sent to prison nothing is going to change.

ARMIN STERNBERG

Lenox Dale