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Helping Law Catch Up to Markets: Applying Broker-Dealer Law to Subprime Mortgages
Macey, Jonathan Miller, Geoffrey O'Hara, Maureen Rosenberg, Gabriel
Macey, Jonathan
Miller, Geoffrey
O'Hara, Maureen
Rosenberg, Gabriel
Abstract
In this Article we make two claims. First, we argue that the current subprime mortgage and credit crisis would have been avoided, or at least greatly mitigated, if existing securities laws had been properly applied to subprime mortgage brokers and originators. Second, we argue that under any of what we regard as three reasonable interpretations of the securities laws, many of the problematic mortgage brokers are actually under the SEC's jurisdiction. This tantalizing possibility does not appear to have occurred to anybody in this crisis, at least to this point.