Where did all the mortgage-backed securities packaged by financial institutions and sold to community banks during the housing boom go? They are spilling out of drawers, filing cabinets, cupboards, and closets at the Federal Deposit Insurance Corporation, which now holds approximately $400 million of the essentially worthless securities. “They are a headache for the agency as it grapples with the toxic assets flowing from many banks around the country. ‘We’re getting more of [the CDOs] all the time,’ said Miguel Browne, an assistant director in the FDIC’s division of resolutions and receiverships.” [WSJ]
