As part of their conversion to agency status, Fannie and Freddie should auction off their portfolios of duff mortgages and dodgy mortgage-backed securities, with no guarantees for the bidders.
Liebowitz emphasizes that because these ratings agencies were protected from free market competition, and so granted a government favored status by regulation, they naturally did not want to create controversial political waves by rocking the subprime mortgage boat, which would endanger their regulation protected profits.
American Capital Mortgage Investment Corp. ( NASD: MTGE) is a member of the Russell 3000, giving it special status as one of the largest 3000 companies on the U.S. stock markets.
Other cases will seek to achieve class action status, and if even one succeeds then banks and defendants in the innumerable pending cases spawned by the mortgage market meltdown are likely to take it on the chin.