While millions of Americans lost their homes, mega-bank Wells-Fargo walked away with a pittance of a fine.

Paying $6.5 million to appease the Securities & Exchange Commission, Wells-Fargo turned to the same retort as a 5-year-old when asked, “Why did you do that?” The bank’s response was one tiny step away from, “I don’t know.”

Wells-Fargo dipped into its small change purse and claimed it didn’t know the risky mortgage-backed securities were dangerous.

In announcing the settlement, the SEC said WF didn’t have enough information to comprehend the high-risk securities it sold to nonprofits, cities and other investors in 2007.

The bank, founded in 1852, depended on the credit ratings of financial products without doing due diligence. Following the (housing) bubble burst,  securities investigators found mortgage-backed securities were inflated and didn’t represent the real risk.

The bank “abdicated its fundamental responsibility” according to an SEC official, and failed to do adequate research.

Former Wells Fargo Vice President Shawn McMurty handed over $25,000 for his role and was barred for six months from working in the industry.

In 2008, America was on the cusp of economic disaster. Unemployed faced its highest level in twenty-years and homeowners defaulted on their loads in numbers not seen since The Great Depression. Investment banks which had been in business for over 100-ears almost collapsed.

The economy had been flushed and was circling the drain.

Every single bit of the disaster was caused by mortgage-backed securities, (MBS).

MBS are shares of a home loan which is peddled to investors. Here’s how this works.

A bank lends borrower money to buy a home and gets the monthly payments. Banks often employed shady tactics to include subprime borrowers. This loan — and others, often hundreds — are sold to a more massive financial agency which packages the loans into MBS which issues shares, known as ‘tranches.

Investors buy them and collect dividends as monthly mortgage payments. The tranches are further repackaged and sold again.

The home loans in 2008 were sliced and diced so much it was possible a confident homeowner could, unknowingly, own shares in their own mortgage.

It’s a harmless and safe way to make money when the housing market is growing as it was in the early years of the 21st century.

And then 2008 hit.