Former Countrywide Leaders Start Firm to Buy Bad Loans

[JohnWxy]

I was alerted to this by the Huffington POst:


http://www.nytimes.com/2009/03/04/business/04penny.html?_r=1&hp


Stanford L. Kurland, Countrywide’s former president, and his team of former company executives have been buying up delinquent home mortgages that the government took over from other failed banks, sometimes for pennies on the dollar. They get a piece of what they can collect.

“It has been very successful — very strong,” John Lawrence, the company’s head of loan servicing, told Mr. Kurland one morning last week in a glass-walled boardroom here at PennyMac’s spacious headquarters, opened last year in the same Los Angeles suburb where Countrywide once flourished.

“In fact, it’s off-the-charts good,” he told Mr. Kurland, who was leaning back comfortably in his white leather boardroom chair, even as the financial markets in New York were plunging.

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Mr. Kurland acknowledges pushing Countrywide into the type of higher-risk loans that have since, in large numbers, gone into default. But he said that during his tenure, he always insisted that the loans went only to borrowers who could afford to repay them. He also said that Countrywide’s riskiest lending took place after he left the company, in late 2006, after what he said was an internal conflict with Mr. Mozilo and other executives, whom he blames for loosening loan standards.

(more)

[HowHasItComeToThis]

1. THEY SHOULD BE IN PRISON

REC THIS SO OTHERS WILL MAKE IT TO THE GREATEST

[indepat]

2. Making a killing on making bad loans so they can buy them back for pennies on the

dollar? :P

[daninthemoon]

3. they can never really fail. they truly hold all the cards.

[Baby Snooks]

4. What they intended to do all along...

They knew most of these loans would be defaulted on and thought they could actually end up with profit by flipping them as foreclosures since the market value of real estate kept increasing each year.

It never occurred to them they might cause an economic collapse but what the hell - someone has to profit from the collapese so why not the same crooks who caused it? Even in a devaluedd market, they will still make a profit. They shouldn't be allowed to. They should have been prosecuted for mortgage fraud and barred from every working in the mortgage industry. But this is America. Land of the free and home of the crooks.

Just another example of how vulture capitalism works.

[Mnemosyne]

5. KnR for greater visibility. n/t