Want an explanation for the mortgage crisis?

Here’s part of a triple-A mortgage backed security:

greenshot_2009-02-11_20-12-23

“When Wells Fargo sold Ms. Halterman’s loan to London-based HSBC, it got bundled with 4,050 other mortgages and used as collateral for a security issued in July 2007. More than 85% of the mortgages were, like Ms. Halterman’s, “subprime” loans to borrowers with blemished credit, according to Tom Atteberry of First Pacific Advisors LLC, a Los Angeles investment-management company.

Credit-ratings firms Standard & Poor’s and Moody’s Investors Service gave the new security their top “triple-A” ratings, which suggested investors were extremely likely to get their money back plus interest. S&P declined to explain its assessment. A Moody’s spokesman didn’t respond to requests for comment.”

Full article on WSJ: http://online.wsj.com/article/SB123093614987850083.html#project%3DSLIDESHOW08%26s%3DSB123014511801733279%26articleTabs%3Darticle