The victims

Even as we mock the greed and stupidity of housing speculators, lenders, and hedge funds, let's not forget that there are innocent victims of the housing bubble, mortgage fraud, and related fallout.

Last month I noted the collapse of Brookstreet Securities, a mortgage speculation firm. Today I see this from the Florida Sun-Sentinel on the real victims:

Dozens of South Florida senior citizens have lost millions of dollars of their savings because their brokers bet wrong on risky mortgage-backed securities after promising them a stable investment. ...

"We've had people in their 80s in here in tears," [investors' attorney Darren] Blum said. "These people are devastated."

The seniors invested in securities called collateralized mortgage obligations, or CMOs. Some independent brokers working in Brookstreet offices pitched the CMOs to wealthy seniors at dinner seminars and condominium meetings.

"They presented these as very safe, like a bond, paying 7 to 8 percent," Blum said. The CMOs the brokers invested in, however, were complex and highly speculative, he said. Investors also received inaccurate brokerage statements that overstated how much they had in their accounts, Blum said.