Moody’s Investors Service and Standard & Poor’s were too influenced by Wall Street, had insufficient resources and used outdated models to grade mortgage securities that blew up when the U.S. housing market collapsed in 2007, Senate investigators said in a report. The Senate Permanent Subcommittee on Investigations concluded after an 18-month probe that the credit-rating firms had conflicts of interest and ignored signs that fraud and lax lending had infected the housing market. The findings may undermine lobbying efforts aimed at defeating legislation that would make it easier for investors to sue the companies. “Credit-rating agencies allowed Wall Street to impact their analysis, their independence and their reputation for reliability,” Senator Carl Levin, the Michigan Democrat who leads the investigative panel, said at a hearing in Washington today. “They did it for the money.”
Diana Golobay was a reporter with HousingWire through mid-2010, providing wide-ranging coverage of the U.S. financial crisis. She has since moved onto other roles as a writer and editor.see full bio
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Diana Golobay was a reporter with HousingWire through mid-2010, providing wide-ranging coverage of the U.S. financial crisis. She has since moved onto other roles as a writer and editor.see full bio