“A growing family with a lot of debt.
A young couple with no down payment.
A business owner whose income was hard to document.
Every one of them was turned down for a home loan by three different lenders. I’m with Countrywide and I got them all approved.”
“No one can do what Countrywide can!”
(h/t Whitney Tilson)
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After Countrywide sold the loan once they were sometimes able to sell it twice.
Stanford L. Kurland, Countrywide's former president and 27 year veteran, acknowledges pushing Countrywide into the type of higher-risk loans - loans that came with low "teaser" interest rates. Stanford L. Kurland, a peon in the syndicate of the soulless, was at the center of that culture shift at Countrywide which started in 2003.
Now through a sweetheart deal with federal banking officials Stanford L. Kurland is able to purchase deliquent mortgages - in January PennyMac purchased $558 million of mortgages that the Federal Deposit Insurance Corp. acquired last year after First National Bank of Nevada failed - for his new company PennyMac for pennies on the dollar (thus the name PennyMac).
Stanford L. Kurland then renegotiates the mortgage with the mortgagee writing down the value of the mortgage and reducing the interest rate. According to Eric Lipton PennyMac stands to make a profit of at least 50 percent on mortgage defaults. Others suggest PennyMac’s investments may return 15 percent to 25 percent a year.
"Kurland is seeking to capitalize on a situation that was a product of his own creation. It is tragic and ironic. But then again, greed is a growth industry." - Blair A. Nicholas
Stanford L. Kurland pushed loans to people who could not afford the reset mortgage payment and then, once the institutions that held those loans could not meet the newly imposed capital requirements of the Bank of International Settlements and were forced into bankruptcy, purchases the loans for pennies on the dollar from the federal government receiver. Then Stanford L. Kurland renegotiates the loans reaping a second profit from those original high-risk loans - the losses on the original high-risk loan are then paid by the lender with no resort - the taxpayer. Bankers, including the peon Stanford L. Kurland, saw in advance a way to profit on the predatory lending debacle twice.
#1 Posted by Lawrence Turner, CJR on Fri 23 Oct 2009 at 04:08 PM