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Throw together the Talking Heads, Standard & Poor’s, Attorney General Eric Holder and what do you get? A lawsuit, of course. Today Holder announced the Justice Department is suing S&P over its rosy ratings of dubious investments. Holder says those ratings were at the “very heart” of the financial crisis.

The Justice Department says S&P knew its ratings of investments made up of shaky mortgages were misleading. As proof, it points to a video of an analyst singing a song he wrote about the tanking housing market -- set to the Talking Heads song, “Burning Down the House.” The Justice Department wouldn’t share the video with us. So one of Marketplace's engineers, Bill Lancz, grabbed a mic and the doctored lyrics: "Housing market went softer/Cooling down/Strong market is now much weaker/Subprime is boi-ling o-ver/Bringing down the house.”

Could any ripple effects from this lawsuit reach your house? Bill Chambers says, possibly. He used to work at S&P and now teaches finance at Boston University. He says if S&P lost and went under, the other two major rating agencies could decide to get out of the business. Chambers says without them, you’d have fewer bond funds to choose from in your 401(k) plan, because fund managers would shy away from unrated bonds.

“I think there would be some fewer funds and the ones that existed wouldn’t have the same variety to choose from as well,” Chambers says.

David Wyss used to be S&P’s chief economist; he now teaches at Brown University. He says the cost of borrowing would go up if rating agencies weren’t around to give a borrower a stamp of approval. Banks would have to pay more to borrow the money they lend to consumers. And, Wyss says, that would trickle down to you and me.

“It’s going to be harder for folks to get a mortgage and it could even affect things like credit cards, car loans,” say Wyss.

Mike Tae is an investment advisor with Millstein and Co. He says consumers needing jumbo loans to buy a house would have to pay much higher interest rates.

He explains, “It would ultimately ultimately flow down to jumbo borrowers as well as normal, mom and pop consumers of mortgages as well.”

So, it might be worth paying attention to the S&P lawsuit. Even if you’re a Talking Heads fan.

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