The last financial crisis can be blamed in large part on runaway securitization. Wall Street giants sliced and diced mortgage loans into bonds that they sold around the world. They claimed that they diversified the mortgage pools so that even a few defaults would not undermine the value of the securities, and they offered tranches of the bonds at a decent yield. As global demand increased for the securities, Wall Street pressured originators to close more and more loans, regardless of creditworthiness. This caused a bubble in prices. Moreover, financial innovators took the lower-tranche loans and cut them up into once-removed securities, making bets on bets on the housing market that were allegedly “safe”. We all know how this ended, and how the securitization bubble took a crash in housing prices and made it exponentially worse.

So now we’re poised to do that all over again.

CNN passes along a “no, really this time, seriously” promise that the RMBS (Residential Mortgage-Backed Securities) working group, tasked with looking into securitization fraud, will soon make a major announcement.

Though this proposal to use eminent domain to buy up underwater homes and refinance them has been getting a lot of publicity in intellectual circles, the unorthodox fix for the housing market is already happening. That would be the REO-to-rental revolution, where investment firms buy up foreclosed properties in mass quantities after repossession, and flip them into the rental market. Entire firms are being built with this business model. We know that over 40% of the city of Oakland’s foreclosed homes have been purchased by investors. This isn’t prospective, it’s already happening.

For a separate story (stay tuned!), I spoke yesterday with Rep. Brad Miller (D-NC), a member of the House Financial Services Committee. And while I had him, I asked him about that assembly of housing groups yesterday, all of whom pointed to the Justice Department as the culprit for the lack of progress on investigations from the RMBS working group, the task force supposed to be probing securitization abuses during the housing bubble.

A ruling in a long-awaited foreclosure case in Massachusetts had an ambiguous result.

Persistent criticism of the sluggish securitization fraud task force formed early this year to investigate Wall Street has led to more PR. Now one of the co-chairs of the Residential Mortgage Backed Securities (RMBS) working group, New York Attorney General Eric Schneiderman, has decided to act like he needs more help, after months of official statements that the investigation was proceeding at an acceptable pace.

Over the last several months, analysts have become invested in the narrative of a recovery in housing, hyping positive data and downplaying either negative data or the explanations that temper the good news (the large amounts of uncounted shadow inventory, for example). This pervasive talk feels a lot like the bubble years, only we’re now talking about how the bottom for housing has been reached instead of marveling that prices will never go down again. And it’s led to a pernicious outcome – the selling off of housing stock to large investment groups who plan to rent it out.

There’s nothing inherently wrong with that, nor is it surprising. Rich investors were always going to buy up low-end housing stock if they felt it was undervalued.

Darren Samuelsohn takes a look at the much-maligned securitization fraud task force, which has come under criticism for, well, not doing much of anything since coming into existence. Let’s see how the leaders of the effort have responded to all that criticism.

Rep. Maxine Waters (D-CA), who is in line to take over as the lead Democrat on the Committee, actually referenced the interview I did with Elizabeth Warren yesterday, in questioning of Robert Khuzami, who is both the head of enforcement at the SEC and a co-chair of the RMBS working group, the panel that is supposed to be investigating fraudulent actions in the securitization of mortgages. Waters used the fact that Warren expressed no confidence in the working group or any other measures from the regulatory and law enforcement communities to hold banks accountable to launch into a series of questions about the RMBS working group and its progress.

One of the items Eric Schneiderman has been using to push back on claims that the Residential Mortage Backed Securities (RMBS) working group is being slow-walked and made ineffectual is that they have a funding stream earmarked for it that testifies to the seriousness of effort with respect to resources. But yesterday, House GOP members refused to add these funds to their budget.