The Obama Administration slated billions to assist banks in hope for homeowners plan and did little to nothing depending on the bank to assist homeowners. The article posted in yesterdays Sunday RJ explains how some banks modified only 15% and most of the them ZERO that is right ZERO.
Read PDF article here
If you are not tweaked after reading this something is very wrong.
Monday, August 17, 2009
How are the banks using goverment money that was for hope for homeowners?
Read this article on yesterdays Sunday Review Journal about the % of homeowners some banks are helping and others haven't helped any but have taken the money.
Click Here for the PDF Link
If you are really ticked after reading this and many articles like it something is very wrong.
Click Here for the PDF Link
If you are really ticked after reading this and many articles like it something is very wrong.
Thursday, August 6, 2009
Ex-Countrywide Execs Throw it in our Faces
BOSTON (MarketWatch) -- Call it another sign that fear is out, greed is back, and we have entered the new post-crisis era. Subprime Stan is back on Wall Street, after less than three years away.
Stanford "Stan" Kurland, the Countrywide Finance executive who pocketed more than $140 million at the expense of outside investors at the height of the subprime mania, has raised about $300 million from fresh investors for his latest venture -- trying to profit from the crisis.
His PennyMac Mortgage Investment Trust (PMT) made its stock-market debut last week.
True, the IPO only raised about half the $750 million originally planned. But it's still plenty. Add it to the $584 million that Kurland has raised from other investors, including BlackRock and Highfield Capital Management, and it gives him a war chest of around $900 million.
The name of the game: Distressed mortgages, particularly the kind of troubled subprime loans that Countrywide used to make.
Buy 'em cheap. Cut a deal with the homeowner. Make a mint.
Kurland knows the business well.
For many years, he was the No. 2 at Countrywide Financial, the nation's biggest mortgage provider. Unlike perma-tanned Chief Executive Angelo Mozilo, Kurland stayed out of the spotlight and under the radar.
Smart move.
Countrywide has since been revealed as ground zero for the subprime scandal. The company, now part of Bank of America, has been widely accused of controversial and reckless lending during the boom.
It has since struck settlements with 40 states to modify controversial loans. The settlements may be valued as high as $8.6 billion. The SEC has charged Mozilo with securities fraud and insider trading in a civil suit. There is a running scandal about friendly mortgages he provided to politicians. (Mozilo, through his attorney, has denied any wrongdoing).
At the height of the boom, the company was valued at $25 billion and was making pre-tax profits of more than $4 billion.
When the crisis brought about its collapse, it was sold to Bank of America /quotes/comstock/13*!bac/quotes/nls/bac (BAC 16.78, +0.08, +0.48%) for scrap.
How did Kurland make out?
Pretty well. A review of all 173 of the company's Form 4 SEC filings shows that from 2003 through 2006 he sold stock to outsiders valued at $203 million, according to my calculations. After deducting stock-option costs, he netted a personal gain of $141 million, again by my calculations. Then he resigned quietly in October 2006 -- just before the roof fell in.
Those outside investors lost nearly all their money when the firm plunged into crisis.
Kurland has since said he was unaware of the scale of the problems at Countrywide while he was there. He declined to be interviewed for this article -- PennyMac is in its regulatory "quiet period" following the IPO. But in March, he and his pals persuaded the New York Times that he had tried to maintain decent lending standards at the mortgage giant. Indeed it was suggested that a dispute over this with Mozilo have been the reason he quit.
Stanford "Stan" Kurland, the Countrywide Finance executive who pocketed more than $140 million at the expense of outside investors at the height of the subprime mania, has raised about $300 million from fresh investors for his latest venture -- trying to profit from the crisis.
His PennyMac Mortgage Investment Trust (PMT) made its stock-market debut last week.
True, the IPO only raised about half the $750 million originally planned. But it's still plenty. Add it to the $584 million that Kurland has raised from other investors, including BlackRock and Highfield Capital Management, and it gives him a war chest of around $900 million.
The name of the game: Distressed mortgages, particularly the kind of troubled subprime loans that Countrywide used to make.
Buy 'em cheap. Cut a deal with the homeowner. Make a mint.
Kurland knows the business well.
For many years, he was the No. 2 at Countrywide Financial, the nation's biggest mortgage provider. Unlike perma-tanned Chief Executive Angelo Mozilo, Kurland stayed out of the spotlight and under the radar.
Smart move.
Countrywide has since been revealed as ground zero for the subprime scandal. The company, now part of Bank of America, has been widely accused of controversial and reckless lending during the boom.
It has since struck settlements with 40 states to modify controversial loans. The settlements may be valued as high as $8.6 billion. The SEC has charged Mozilo with securities fraud and insider trading in a civil suit. There is a running scandal about friendly mortgages he provided to politicians. (Mozilo, through his attorney, has denied any wrongdoing).
At the height of the boom, the company was valued at $25 billion and was making pre-tax profits of more than $4 billion.
When the crisis brought about its collapse, it was sold to Bank of America /quotes/comstock/13*!bac/quotes/nls/bac (BAC 16.78, +0.08, +0.48%) for scrap.
How did Kurland make out?
Pretty well. A review of all 173 of the company's Form 4 SEC filings shows that from 2003 through 2006 he sold stock to outsiders valued at $203 million, according to my calculations. After deducting stock-option costs, he netted a personal gain of $141 million, again by my calculations. Then he resigned quietly in October 2006 -- just before the roof fell in.
Those outside investors lost nearly all their money when the firm plunged into crisis.
Kurland has since said he was unaware of the scale of the problems at Countrywide while he was there. He declined to be interviewed for this article -- PennyMac is in its regulatory "quiet period" following the IPO. But in March, he and his pals persuaded the New York Times that he had tried to maintain decent lending standards at the mortgage giant. Indeed it was suggested that a dispute over this with Mozilo have been the reason he quit.
Must Read - Bad loans still make money - Jul 30, 2009 12:06 PM — Scott Jagow
Bad loans still make money - Jul 30, 2009 12:06 PM — Scott Jagow
A group of former Countrywide people launched an IPO today with their new company, PennyMac. Take one guess at what they’re doing. And while we’re at it, let’s talk about why the government’s loan modification program isn’t working.
PennyMac is based in Calabasas, California (sound familiar?), and it plans to make money by buying up failing home mortgages from failed banks and then restructuring the loans. From Forbes/Reuters:
PennyMac’s chief executive is Stanford Kurland, a former president and chief operating officer of Countrywide. At least 10 other top PennyMac officials are alumni of Countrywide, which was also based in Calabasas.
Countrywide was once the largest U.S. mortgage lender, but its aggressive lending practices are widely considered to be a major cause of the nation’s housing crisis.
PennyMac’s business has drawn the attention of critics who have accused Kurland and other Countrywide alumni of trying to profit from a housing crisis they helped create.
Do investors have faith in the crew the second time around? Well, in May, PennyMac predicted its IPO would raise $750 million. It netted $320 million. But the company has raised hundreds of millions from private investors as well, so some people believe PennyMac will find a way to profit.
And why not? What’s left of the mortgage business seems to be doing just fine. The New York Times reports that one reason the government’s loan mod program isn’t going very well is that mortgage companies collect tons of fees on delinquent mortgages:
“It frustrates me when I see the government looking to the servicer for the solution, because it will never ever happen,” said Margery Golant, a Florida lawyer who defends homeowners against foreclosure and who worked in the law department of a major mortgage company, Ocwen Financial. “I don’t think they’re motivated to do modifications at all. They keep hitting the loan all the way through for junk fees. It’s a license to do whatever they want.”
More from the article:
“If they do a loan modification, they get a few shekels from the government,” said David Dickey, who led a mortgage sales team at Countrywide and Bank of America, leaving in March to start his own mortgage advisory firm, National Home Loan Advocates. By contrast, he said, the road to foreclosure is lined with fees, especially if it is prolonged. “There’s all sorts of things behind the scenes,” he said…
“For many subprime servicers, late fees alone constitute a significant fraction of their total income and profit,” said Diane E. Thompson, a lawyer for the National Consumer Law Center, in testimony to the Senate Banking Committee this month. “Servicers thus have an incentive to push homeowners into late payments and keep them there: if the loan pays late, the servicer is more likely to profit.”
One more note on a semi-related subject. The Wall Street Journal reports that the Senate has subpoenaed Goldman Sachs, Deutsche and other banks to inquire about possible fraud in the mortgage market:
The congressional investigation appears to focus on whether internal communications, such as email, show bankers had private doubts about whether mortgage-related securities they were putting together were as financially sound as their public pronouncements suggested. Collapsing values for many of those securities played a big role in precipitating last year’s financial crisis.
If they can’t prove fraud, how about absolute and utter negligence?
A group of former Countrywide people launched an IPO today with their new company, PennyMac. Take one guess at what they’re doing. And while we’re at it, let’s talk about why the government’s loan modification program isn’t working.
PennyMac is based in Calabasas, California (sound familiar?), and it plans to make money by buying up failing home mortgages from failed banks and then restructuring the loans. From Forbes/Reuters:
PennyMac’s chief executive is Stanford Kurland, a former president and chief operating officer of Countrywide. At least 10 other top PennyMac officials are alumni of Countrywide, which was also based in Calabasas.
Countrywide was once the largest U.S. mortgage lender, but its aggressive lending practices are widely considered to be a major cause of the nation’s housing crisis.
PennyMac’s business has drawn the attention of critics who have accused Kurland and other Countrywide alumni of trying to profit from a housing crisis they helped create.
Do investors have faith in the crew the second time around? Well, in May, PennyMac predicted its IPO would raise $750 million. It netted $320 million. But the company has raised hundreds of millions from private investors as well, so some people believe PennyMac will find a way to profit.
And why not? What’s left of the mortgage business seems to be doing just fine. The New York Times reports that one reason the government’s loan mod program isn’t going very well is that mortgage companies collect tons of fees on delinquent mortgages:
“It frustrates me when I see the government looking to the servicer for the solution, because it will never ever happen,” said Margery Golant, a Florida lawyer who defends homeowners against foreclosure and who worked in the law department of a major mortgage company, Ocwen Financial. “I don’t think they’re motivated to do modifications at all. They keep hitting the loan all the way through for junk fees. It’s a license to do whatever they want.”
More from the article:
“If they do a loan modification, they get a few shekels from the government,” said David Dickey, who led a mortgage sales team at Countrywide and Bank of America, leaving in March to start his own mortgage advisory firm, National Home Loan Advocates. By contrast, he said, the road to foreclosure is lined with fees, especially if it is prolonged. “There’s all sorts of things behind the scenes,” he said…
“For many subprime servicers, late fees alone constitute a significant fraction of their total income and profit,” said Diane E. Thompson, a lawyer for the National Consumer Law Center, in testimony to the Senate Banking Committee this month. “Servicers thus have an incentive to push homeowners into late payments and keep them there: if the loan pays late, the servicer is more likely to profit.”
One more note on a semi-related subject. The Wall Street Journal reports that the Senate has subpoenaed Goldman Sachs, Deutsche and other banks to inquire about possible fraud in the mortgage market:
The congressional investigation appears to focus on whether internal communications, such as email, show bankers had private doubts about whether mortgage-related securities they were putting together were as financially sound as their public pronouncements suggested. Collapsing values for many of those securities played a big role in precipitating last year’s financial crisis.
If they can’t prove fraud, how about absolute and utter negligence?
Must Read - Bad loans still make money - Jul 30, 2009 12:06 PM — Scott Jagow
Bad loans still make money - Jul 30, 2009 12:06 PM — Scott Jagow
A group of former Countrywide people launched an IPO today with their new company, PennyMac. Take one guess at what they’re doing. And while we’re at it, let’s talk about why the government’s loan modification program isn’t working.
PennyMac is based in Calabasas, California (sound familiar?), and it plans to make money by buying up failing home mortgages from failed banks and then restructuring the loans. From Forbes/Reuters:
PennyMac’s chief executive is Stanford Kurland, a former president and chief operating officer of Countrywide. At least 10 other top PennyMac officials are alumni of Countrywide, which was also based in Calabasas.
Countrywide was once the largest U.S. mortgage lender, but its aggressive lending practices are widely considered to be a major cause of the nation’s housing crisis.
PennyMac’s business has drawn the attention of critics who have accused Kurland and other Countrywide alumni of trying to profit from a housing crisis they helped create.
Do investors have faith in the crew the second time around? Well, in May, PennyMac predicted its IPO would raise $750 million. It netted $320 million. But the company has raised hundreds of millions from private investors as well, so some people believe PennyMac will find a way to profit.
And why not? What’s left of the mortgage business seems to be doing just fine. The New York Times reports that one reason the government’s loan mod program isn’t going very well is that mortgage companies collect tons of fees on delinquent mortgages:
“It frustrates me when I see the government looking to the servicer for the solution, because it will never ever happen,” said Margery Golant, a Florida lawyer who defends homeowners against foreclosure and who worked in the law department of a major mortgage company, Ocwen Financial. “I don’t think they’re motivated to do modifications at all. They keep hitting the loan all the way through for junk fees. It’s a license to do whatever they want.”
More from the article:
“If they do a loan modification, they get a few shekels from the government,” said David Dickey, who led a mortgage sales team at Countrywide and Bank of America, leaving in March to start his own mortgage advisory firm, National Home Loan Advocates. By contrast, he said, the road to foreclosure is lined with fees, especially if it is prolonged. “There’s all sorts of things behind the scenes,” he said…
“For many subprime servicers, late fees alone constitute a significant fraction of their total income and profit,” said Diane E. Thompson, a lawyer for the National Consumer Law Center, in testimony to the Senate Banking Committee this month. “Servicers thus have an incentive to push homeowners into late payments and keep them there: if the loan pays late, the servicer is more likely to profit.”
One more note on a semi-related subject. The Wall Street Journal reports that the Senate has subpoenaed Goldman Sachs, Deutsche and other banks to inquire about possible fraud in the mortgage market:
The congressional investigation appears to focus on whether internal communications, such as email, show bankers had private doubts about whether mortgage-related securities they were putting together were as financially sound as their public pronouncements suggested. Collapsing values for many of those securities played a big role in precipitating last year’s financial crisis.
If they can’t prove fraud, how about absolute and utter negligence?
A group of former Countrywide people launched an IPO today with their new company, PennyMac. Take one guess at what they’re doing. And while we’re at it, let’s talk about why the government’s loan modification program isn’t working.
PennyMac is based in Calabasas, California (sound familiar?), and it plans to make money by buying up failing home mortgages from failed banks and then restructuring the loans. From Forbes/Reuters:
PennyMac’s chief executive is Stanford Kurland, a former president and chief operating officer of Countrywide. At least 10 other top PennyMac officials are alumni of Countrywide, which was also based in Calabasas.
Countrywide was once the largest U.S. mortgage lender, but its aggressive lending practices are widely considered to be a major cause of the nation’s housing crisis.
PennyMac’s business has drawn the attention of critics who have accused Kurland and other Countrywide alumni of trying to profit from a housing crisis they helped create.
Do investors have faith in the crew the second time around? Well, in May, PennyMac predicted its IPO would raise $750 million. It netted $320 million. But the company has raised hundreds of millions from private investors as well, so some people believe PennyMac will find a way to profit.
And why not? What’s left of the mortgage business seems to be doing just fine. The New York Times reports that one reason the government’s loan mod program isn’t going very well is that mortgage companies collect tons of fees on delinquent mortgages:
“It frustrates me when I see the government looking to the servicer for the solution, because it will never ever happen,” said Margery Golant, a Florida lawyer who defends homeowners against foreclosure and who worked in the law department of a major mortgage company, Ocwen Financial. “I don’t think they’re motivated to do modifications at all. They keep hitting the loan all the way through for junk fees. It’s a license to do whatever they want.”
More from the article:
“If they do a loan modification, they get a few shekels from the government,” said David Dickey, who led a mortgage sales team at Countrywide and Bank of America, leaving in March to start his own mortgage advisory firm, National Home Loan Advocates. By contrast, he said, the road to foreclosure is lined with fees, especially if it is prolonged. “There’s all sorts of things behind the scenes,” he said…
“For many subprime servicers, late fees alone constitute a significant fraction of their total income and profit,” said Diane E. Thompson, a lawyer for the National Consumer Law Center, in testimony to the Senate Banking Committee this month. “Servicers thus have an incentive to push homeowners into late payments and keep them there: if the loan pays late, the servicer is more likely to profit.”
One more note on a semi-related subject. The Wall Street Journal reports that the Senate has subpoenaed Goldman Sachs, Deutsche and other banks to inquire about possible fraud in the mortgage market:
The congressional investigation appears to focus on whether internal communications, such as email, show bankers had private doubts about whether mortgage-related securities they were putting together were as financially sound as their public pronouncements suggested. Collapsing values for many of those securities played a big role in precipitating last year’s financial crisis.
If they can’t prove fraud, how about absolute and utter negligence?
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