Countrywide’s headlong rush to write as many loans as possible was really an effort to extract as many fees as possible from those transactions. That’s how mortgage originators make their money. Countrywide’s brokers also systematically discriminated against minorities (about two-thirds Hispanic and one-third black); in over 200,000 cases, it jacked up interest rates and fees, and added less-favorable terms.
If you like your economic meltdown exposés with Canadian accents and ominous music, then Meltdown: The Secret History of the Global Financial Collapse is the documentary for you.
I’m still watching the first episode, but Meltdown looks like a good, easy-to-grasp summary of the economic meltdown, starting with Countrywide‘s reckless lending practices. It’s done by the CBC, but for the life of me, I can’t figure out how to watch it on the CBC website. All I get are back-to-back ads. Fortunately, Al Jazeera English makes it easier. Here are all the episodes: 1, 2, 3, and 4.
In not-surprising-but-still-enraging news, it turns out that Countrywide kept its mortgage fraud racket alive by silencing whistleblowers. Like I said, not surprising. What is (a little) surprising is that this “legacy of corruption” still goes on at Bank of America, which bought Countrywide after it collapsed.
The pair of articles by mortgage industry watchdog and investigative journalist, Michael Hudson, exposes the past and present fraud in the Countrywide-Bank of America mega lender.
“As many as 2 million loan applicants may have had their personal information stolen, the FBI says.” Mortgage firm Countrywide, in response to alleged data breach, offers free credit monitoring | LA Times
Today Show: “So, Countrywide employees were coaching them to lie?” Insider: “Yes.” Ex Countrywide Manager Exposes Its Lies | Consumerist
Countrywide Is About To Foreclose On Ed McMahon | Consumerist
I was amused to read Mark Ireland’s post saying he came under fire by members of a panel on foreclosures at the recent Equal Justice Conference in Minneapolis for suggesting that mortgage loan servicers are not acting in the best interest of either consumers or lenders. I thought that was common knowledge.
Servicers make money from the late fees, attorney fees, inspection fees, and other fees associated with foreclosure. Lenders do not. Obviously, neither do consumers.
In an odd sort of thank-you note, Bank of American will give two top Countrywide executives, CEO Angelo Mozilo (pictured) and President David Sambol, $19 million in stocks. Bank of America took over Countrywide, the company made famous by writing loans all but guaranteed to fail. Countrywide’s loose lending habits were a significant contribution to the current recession (or whatever you want to call it).
Lawmakers accused the executives of leaving homeowners at risk of losing their homes while fattening their own wallets.
. . .
Between 2002 and the close of 2006, the three executives were paid $460 million, according to a report issued by the House committee in March.
I wonder if this will come up at the upcoming Federal Reserve hearings on the Countrywide-Bank of America merger.