Fast & Sleazy – Schumer is on Mozilo’s A$$ Big Time

By Moe

The honorable Senator Charles Schumer has a bone to pick with Angelo Mozilo and Countrywide Financial. It appears that he isn’t buying these BS press releases that have been coming out over the last couple months or so and he isn’t going to roll over and play Mr. nice senator–especially when this company was a HUGE contributor to the mortgage and housing crisis that we are seeing now.

What I am gathering based on the recent comments from the Senator is that he likens Countrywide to the mob and Mozilo as the crime lord. He might not be so far off.

Monday, Schumer was again on Mozilo’s a$$ for another shady deal involving the the Federal Home Loan Bank (FHLB) system for cash advances to stay afloat as other liquidity sources shun the company and the credit markets tank in general. Countrywide’s advances from the Atlanta-based FHLB bank had soared 81 percent, to a total of $51 billion. That represents nearly 40 percent of FHLB Atlanta’s total advances, according to the bank’s latest SEC filing—a potentially dangerous level of exposure considering Countrywide’s track record in poor underwriting and predatory lending practices in recent years.

To secure its advances from FHLB Atlanta, Countrywide has posted $62 billion worth of loans as collateral. Schumer pointed out that there is adequate reason for worry that Countrywide’s collateral poses a higher risk than other banks.

Wow! I didn’t know that you could use “crap” as collateral! $62 billion of seriously questionable loans and the bank bought it? The due diligence that I have seen on behalf of our entire banking system has been a joke so far, and the comedy routine continues as Mr. Mozilo plays “hide the peanut” with our entire country.

Apparently, Schumer plans to shine a spot light on that peanut and rightfully so. I think he may be reading my blog.

“Countrywide is treating the Federal Home Loan Bank system like its personal ATM,” Schumer said. “When Congress created these banks, it never intended for them to be used to prop up mortgage lenders that specialized in deceiving borrowers. At a time when Countrywide’s mortgage portfolio is deteriorating drastically, FHLB’s exposure to Countrywide poses an unreasonable risk.”

Last week I reported that Schumer sent a letter to Mozillo asking the CEO of the largest lender some serious questions about how they have operate. The response from my readers was great, and I wanted to highlight some of these comments here.

Submitted by Joe ex-Countrywide Employee :

The questions from Senator Schumer will most likely be met by broad stroke figures that do not accurately reflect what is happening on the front lines.

I am surprised that Congress cannot get their hands on the “real” story.

Everyone in the mortgage banking business knows what a Yield Spread Premium is versus an “Overage” on the Retail lending side. Having worked for Countrywide in the past, I too was paid a “commission” on increasing the rate to the borrower above and beyond what Countrywide told me I had to charge someone.

Loan Officers in Countrywide branches were paid 50% commission on any “overage” at that time. They were also paid another commission as a percentage of the loan amount commonly referred to as “basis points”. These basis points averaged about one-half to three-quarter percent of a loan amount.

As far as FHA, once again, EVERYONE in the mortgage business knows that FHA pays HUGE! The proof is right on evryone’s rate sheets. All Congress has to do is get some rate sheets and they can see this is true. The bottom line is that lenders such as Countrywide, Bank of America, Wells Fargo, Chase, Citi, etc. get to HIDE their revenue made from loans due to a loop hole in the system that essentially states that since they are FDIC labeled they need not disclose compensation earned.

As if that isn’t crazy enough, NO ONE HAS EVEN MENTIONED SERVICING RELEASED PREMIUMS! What’s this you may wonder? This is whereby lenders like Countrywide earn even more money on loans when they sell the loan in the secondary market known as Wall Street. This compensation can add up quick.

And finally, how about the servicing dollars earned each year on the overall portfolio? This tacks add even more profits. Ladies and Gentlemen, this industry is awash with nothing other than semantics and greed. Everyone is pretending they don’t know a thing when all they need to do is ask. You know why they don’t?

Here’s why – THEY CAN’T HANDLE THE TRUTH! Jack Nicholsan would be proud.

Tom ex-Countrywide employee:

Up until recently, a 4506 was not required by Countryfried retail. Nothing was required except borrowers proof of identy and a signed 1003.Every borrower with a 680 score got 95% financing with 1 day on the job and any “reasonable income” was accepted no questions asked.

As a Retail LO I took the app on Fri and we drew docs on monday and closed on Tuesday.Fast and Easy Pleasy..

and oh by the way FNMA’s famous line of “risk based pricing” became the biggest lie of all because I closed that loan at FNMA full doc pricing with no add ons for No Income Verrification…No Asset Verification..and a telephone verification that the borrower worked where he said he did.As long as Countrywide’s Clues UW system said OK the UW rubber stamps the deal,,wham bam thank you mam,easy pleasy fast and easy..with no add ons to full doc pricing..

Subitted by Whizkid ex-Countrywide Employee:

Great points today made about YPS and overage. I worked as a PA/originator for a regional officer and branch manager in the past at CW retail division. The bottom line I believe is the politicians and the media do not want to ask or disclose banks profit (overage) on certain loan product because the consumer won’t trust the bank if they really knew the playing field.

I was hired by CW because I had a DRE license and off the hook computer skills. When CW came out with their “ADVANTAGE” origination system I was the first to crack the software program before it was mandatory for all retail loan officers to use. I’m sure some of you ex or existing employees can identify with the software origination system used today that shows the overage.

Quick story: Early in my employment phase I mentioned YSP and the branch manager pulled me to the side and said “please use the term overage or shortage because we do not want any loan officer knowing about YSP.” Keep in mind CW likes to higher inexperience loan officers to keep the power in their hands.

For the AE’s in the industry dealing with loan officers in wholesale! You know when you went to most of the brokers place of employment you pushed the most profitable products that paid you the most basis points. Only a true professional seen through this tactic and served the clients needs not your interest for aligning your pockets!

My point: From what I have seen in this industry it sickens me the problem is so bad a politician can’t fix it because the politician is just taken the temperature on this issue with their finger!

I have been to all areas at CW and most of the employees have never seen all levels of the corporation to know how it all works when a file is funded and closed, then sold…I have. Also, I knew what the branch made on the products all loan officers sold to consumer working with regional and the branch manager. If I told you what they made you’d realize not only that you are the small fish, but you’ve been pimped to the fullest with no vaseline!

Kidz be nice to each other.

So there you have it. It appears based on the comments above, that the fast and sleazy (Fast & Easy) was a key ingredient in Kernel Mozilo’s top not so secret toxic loan recipe. Don’t forget, you read it here Mr. Schumer.

Any other questions sir?


Posted in Scam & Fraud News | 24 Comments

24 Responses to “Fast & Sleazy – Schumer is on Mozilo’s A$$ Big Time”

  1. Glory says:

    Yield Spread Premium and rebate are not the same thing. The Yield spread premium is given to brokers as overage. When you work for a direct lender the term is overage . No one I know originates with underage. We all know Countrywide and their tanned leader are corrupt.
    Their Loan officers are the worst paid in the industry but quite willing to put up with the compensation for the name recognition.
    In a Street Corner business these people are known as Prostitutes and in the loan business it is a loan ho,you know what I mean.
    Good Luck to all the employees that think the ship is not sinking no one can be bailed out forever. The rest of you prepare for the TSUNAMI,The impact will be felt in all the financial markets.

  2. watchdog says:

    The wholesale side of Countrywide has known about loop holes on the Fast and Easy for quite some time. They would tell the brokers leave the time on the job blank when they ran CLOUT. IT would not work, but then Wholesale would tell the broker to submit the file and they would “fix” it. They manipulate the system so that SISA loans could go through with out hardly any time on the job or less than one year self employed.

  3. david says:

    I do business with Countrwide Correspondent. It is amazing to me that we have been told ….”you can’t count on your CLOUT approval”. They still push buy-backs to the Correspondent lender even with a CLOUT approval. Man they are messed up!!!

  4. Socaln8ive says:

    Exposing the likes of Mozillo is great. But there are several others that need to to accountable as well. It would be far better if this investigation was being done by a Senator with a brain. Shurmer is an idiot.

  5. If banks and mortgage bankers had to disclose what mortgage brokers do on the HUD, people would be shocked at what is made on their loans, and the stigma of using a mortgage broker to avoid the middle-man would go away.
    There are thousands of small independent brokers who run an honest and low cost origination office. Much more efficient that the Countrywides and B of A’s can. I can beat the pants off the B of A conf. rates on any given day and still have no problem disclosing my fees.
    We are already so over-regulated, it’s stupid. The loan documents are so thick, nobody bothers to read what they are signing. Why not try streamlining the paperwork so people will read their docs and know what they have signed?

    Here’s another pet peeve of mine…When you buy or lease a car… try to get an APR on a lease. When have you EVER had to show income documentation to finance a car? Do the dealerships have to disclose how much money THEY are making on the auto financing? Why not?

  6. doubled says:

    The Senator is a day late and a dollar short. Where was he years ago in trying to prevent this damage? Sorry, but once again Schumer is just reacting to problems with little foresight to the future… except as it may pertain to his re-election. It’s a popular thing now to beat up on Mr. Pump-’n-Dump Mozilo.

  7. tk says:

    I can appreciate that everyone thus far is slightly “bitter”. Careers and families have been dishevled for those working in this industry and for those drawn into some of these “Fast and Sleazy” loan programs. The problems and issues just seem to keep surfacing. Corruption, fraud, deceit….hey, wait, are talking about corporate America and politics, or just the mortgage industry? Sometimes it’s hard to tell.

    Unfortunately, for those of us who actually still work in the biz and feel compelled to stay in it, the black and blue marks don’t help. Not all lenders and brokers are “bad”. Yes, we do often times make our commission on things like “YSP” and/or “overage”. And the banks with the FDIC seal of approval don’t have to disclose this to the borrower. But we all still compete in an environment of “free will” and capitalism. I wonder if we took an in depth look at, let’s say, the Pharmaceutical Companies with their drug peddling reps with the incentives for the healthcare professionals to use or prescribe their product…trips to locations with warm temperatures and sandy beachs, ect. Or the Health Insurance Industry as related to our Health Care system….what is covered, or maybe not, due to someone’s idea of “medical necessity” or customary and reasonable? I’ll bet we could poke a hot iron in nearly any industry (how about the petroleum industry?) and find more of the same.

    It’s not to say that bad things haven’t happened, and it’s finally gotten to the point the government is getting “more” involved……that is almost an oxy moron, isn’t it. We need someone to blame, an escape clause. What is happening to some of the industry is good. Not for the families who weren’t savvy to their loan program features or were hoodwinked during the mortgage process. No way, that is never a good thing. But the “bad” guys, so to speak, are slowly either exiting the business or having to cross back over from the “dark” side. It’s a correction. And it’s time. All the “billions” in write offs….don’t mean much, really. It’s all paper. It’s not real. What happened to our society….years ago, you couldn’t even consider going to a bank to take out a mortgage unless you had 20% of your own money to put into the transaction and still ample money left in your account at the bank. Maybe it’s time we as a society take a little responsibility for our own actions. Marketing, buy now, pay later, “What’s in your Wallet?”….that crap makes me want to vomit. Maybe we’ve overall gone a bit too far with everything. Credit, credit, eat fast food, your kid is unhealthy because we don’t take the time to spend 30 minutes at the dinner table for a meal at home, to discuss the day and commune as a family. Sorry, I’ve rambled on and gone off topic, maybe. This really sucks, albeit, but let’s all buck up and take some of the responsibility, the consumer needs to have some accountability. No one is holding a gun to make you sign the docs. Do the right thing. The question is do we as a society know what the right thing is? It’s happening, not any one person or companies fault. But it will correct, and things will come back. The pain is here. Take your pill, and those who know and believe in the right thing will get it back on track. Industry professionals, politicians, consumers. Let’s work it out together and quit talking about all the bad CEO’s and Loan Officers, companies. Like it or not, we’re all in it together.

  8. THEWATCHER says:

    GLORY ………..OR GLORIA???
    YOU ARE SERIOUSLY CONFUSED YSP /REBATE/ OVERAGE ALL THE SAME !……………DIRECT LENDER HAH!
    The fact is the floor rate is the rate that your employer is willing to take in the least for possibly a fee if not at (PAR) meaning no rebate. It is is the determined margin for profit predetermined by the companies CFO or who ever crunches the numbers. All the programs used to qualify and underwrite are and were decent tools yes where influenced by faulty and skewed numbers by Lawyers Title or whatever other name they assumed “All being owned by CW.” The abuse came from those internally and externally who expolited those weaknesses to make a dollar Unfortunately as in Broker world there is and was no accountablity or vested risk by those originating and processing the applications.

  9. partysover says:

    I worked for Countrywide Wholesale as an UW until recently. The UWs were told that a CLUES Accept on a Fast & Easy Loan was what you needed to close the deal with the caveat that the UW could indicated that the income indicated for the borrowers on the 1003 was ‘deemed reasonable’. We were then instructed to cite why the income was deemed reasonable BUT WE COULD NOT NOTE WHERE WE FOUND THE SUPPORTING DATA TO DEEM THE INCOME REASONABLE IN THE LOAN FILE. Some UWs were pulling job sites such as Salary.com and putting the documentation in the loan files – we were all told to stop documenting the file. This makes absolutely NO SENSE! We were essentially told to rubber stamp everything and agree that the income made sense when we really had no idea whether it did or not.

  10. Cecily Hooks says:

    Boy, it is nice to hear that other people have noticed the sleazy practices over at Countrywide. When I left them on a good term for a new job offer I had just closed a million…mostly FHA , 2 Fast and Easys . When I got no final paycheck , it took 2 months for someone to let me know that it was because I owed them money. It seems I priced 2 of my loans, fast and easy , with a hit to me of 3 to 4 points. ( Yeah, right) It seems they re-pulled the credit on both , although they were less than a month old and got lucky. Since it was 2 days before close, and the folks had recent inquiries and opened up new credit , the scores were between 3 and 8 points below what was needed for the pricing. So, they put them on a NINA with the same low rate, never called the folks to ask if they had the docs that would be needed for full doc ( the customers did) and closed them charging me. Funny thing is , one closed before I left ( but I had told the processor I was going ) and the other 2 days later. I took them to litigation and they swore they called me on both of them to let me know. And , I guess i am so stupid I would say ” oh yeah, go ahead and charge me for it. Even though they have the docs and truly only wanted a painless quick close.” The regional manager, Regional Vice President , Operations Manager and the branch manager all lied under oath. I won…they paid…but , damn , that was dirty. Nice tactics , huh.

  11. DMONEY says:

    You people are idiots. Without YSP, there is no reason for brokers to do loans that are not charged on the front. This will cause higher APR’s and higher lending costs across the board.

    Lenders need not show this because they are not guaranteed it unless the loan is bought on the secondary market. So to show a potential compensation when it is not guaranteed recieved would not be true. There are also loans that are sold at scratch and dent for 5-40pt losses. Yes so that means the lender had a $100k loan that they only get paid anywhere from 60-95k for. These are called. Does the borrower care??? Of course not, they are not going to step in w/ the difference. This is capitalism and there is risk and return. You take the risk, you deserve the return. The fact that LO’s and banks and brokers charge fees and points and make rebate is not wrong. Unlike many other professions such as being a lawyer, or doctor , or accountant, or house cleaner, or psychologist, or even working at McDonalds, these clients do not pay yu an hourly fee to work on their loan. In fact they have 3 brokers all spend there time money and energy work on the loan, and go with whom they choose. Seems pretty fair to me, yeah right. So at the end of the day everyone is worng and the system is screwed. Sounds like many other industrys out there, the only difference is that many other industrys didnt give homes to people who didn’t deserve them. As for the CLOUT approval, you should check out CLD Plus instead of Platinum, this puts is all on CW and minimizes the risk of buyback.

  12. John Q says:

    You all have not a clue what you are talking about. Sounds like you don’t know how to originate a loan and are blaming CW. Next year when CW is on top once again you will crawl back. Write something factual and positive for a change. Do you know how?

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  14. re says:

    Listen to all this whining from all these 2 faces @ssclowns, It was ok when you were employed by CW but now WOW, LOOK OUT

  15. Kev says:

    Come to the midwest and I’ll tell you a sad story about how an American Home Mortgage branch that specialized in fraud ended up renaming itself as a Countrywide retail branch. To add fuel to the fire, the branch managers re-hired disgraced LO’s and processors that they once fired at American Home because of fraudulent activity. Talk about addicted to money!

  16. John Q says:

    Here is the challenge: say something positive about anything………..

  17. Jeannie Shye says:

    Have a hearing with U/I in Oregon. Need advise regarding the Fast and Easy Program and how it promoted to business partners on the wholesale side. If you are a loan officer or other interested party how were you addressed when structuring a loan on this product? Please reply.
    Kind Regards,
    JS

  18. Cookie says:

    Say something nice… okay. They have had some great programs and talk a good talk. The commercials are very good in most cases. But sometimes , as I look through the levels of management and how they are paid, it looks almost like a Ponzi scheme. I know for a fact that our regional management here are ambitious to a fault. But, this can be true with any company. There are some good leaders and some questionable leaders. I remember that at Countrywide , it used to be that we only needed to use 1 credit score. So some of our group would FICA fish. Some managers encouraged it, some turned their backs and others followed company policy of taking only one pull of credit and using what ever you got. We soon learned that in most cases, one particular reporting agency was consistantly higher and did not show many of the collections and student loans. We all know that the local acceptable CRA usually had it all so we avoided it like the plague. Then, we had to use at least 2. Still worked in our favor. Countrywide stood firm on the CR issue and blamed any repercussions on the FICA fishing LC’s. However, an idiot can see that that system would be abused so it is the developer trying to get a greater market share that is the one responsible for any losses or fraud attached to it.

  19. Lisa Roberts says:

    Jeannie,

    What hearing? What the heck is going on? CALL ME.

    Lisa

  20. Jackie says:

    Do you have a number for First Federal of CA?

  21. cayce says:

    Do you hapen to have a number for First Franklin?

  22. terry rudman says:

    Do you have the phone numbers for bank of America and United Banks?

    Thanks,

    Terry

  23. paul lee says:

    Do you have the phone number for bank of America? The number on your list for bank of America is blocked out so it cannot be read.

  24. paul lee says:

    already done so.