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No Responses to “California Attorney General Jerry Brown Subpoenas Countrywide”

1. RN
   Dec 15th, 2007 at 10:20 pm

   JS,

   I may be able to offer some assitance, please e-mail me at info@cfsaionline.com so we could further discuss.

   RN

2. Stephen
   Dec 16th, 2007 at 1:38 am

   While he’s at it, he might want to investigate their appraisals. They used Landsafe exclusively. I interviewed with Landsafe and they pay appraisers half the normal fee and keep the rest.

3. Amaerg.Com » California Attorney General Jerry Brown Subpoenas Countrywide
   Dec 16th, 2007 at 3:07 am

   [...] wrote an interesting post today on California Attorney General Jerry Brown Subpoenas CountrywideHere’s a quick [...]

4. The Mortgage Guy
   Dec 16th, 2007 at 1:29 pm

   Yield spread premium is not a kick back, plain and simple. When brokers get paid yield spread premium, it’s disclosed at and before the closing. It’s up front while a kick back is a secretive payment.

   Not only that, but premium is a natural occurrence in the pricing and sale of ALL debt securities, including mortgages.

   If it’s a kickback for brokers, it’s a kickback for lenders as well, who by the way don’t have to disclose it.

   Further it would have to be a kickback for any bond buyer and seller as well. Prohibiting brokers from earning YSP would be discriminatory as bond buyers and sellers as well as lenders would still be able to sell debt instruments at a premium when economic conditions dictate so.

5. Stephen
   Dec 16th, 2007 at 2:27 pm

   It IS a kickback, It is NOT disclosed to the borrower and it is compensation for doing the opposite of what they purport to do.

6. dana joseph
   Dec 16th, 2007 at 2:56 pm

   I was a VP in the Subprime Wholesale Lending Division at Countrywide. I was recently laid off and am no longer employed with Countrywide so I have no real gain from defending them. I do so because it is the truth and I think everyone has forgotten it in this witch hunt!
   Yes, we used Landsafe exclusively. Guess what, most of our broker clients complained endlessly about how CONSERVATIVE our Landsafe appraisers were. They were very conservative. We did not push values nor did we allow our broker clients to do so.
   We turned loans down because they did not benefit the borrower. I did this myself many times. The message I was given from the top and that I filtered down was that loans had to make sense and they had to benefit the borrower. I was on the operations side and can’t speak for the entire sales management side but they could do nothing without our approval.
   In my 6 yrs experience with Countrywide Subprime Wholesale, Countrywide was the more conservative lender in the game. We lost business because of it. I have never been asked to do something unethical, nor have I seen anyone sales or otherwise ask it and not get fired for it. Angelo is no angel I’m sure, but many of the things he has been accused of in the media are simply not true! Many of the things his company has been accused of are also not true. I think he is an easy target.
   Dana Joseph

7. dana joseph
   Dec 16th, 2007 at 3:07 pm

   One other thing - we frequently asked our broker clients to lower the YSP they were requesting if it was too high or didn’t make sense. We capped the amount of money they could make on a loan. We charged very little but we didn’t make our money off the origination

8. ray r
   Dec 16th, 2007 at 7:03 pm

   I also worked there and now thier practices on appraisals. A matter of fact i had one borrower. Who was an appraiser, was told his house was less then the appraised amount by a land safe appraiser and a field reviewer. Just so countrywide could get a higher rate and charge more points. I was indicated in a lawsuit by the borrower. Matter of fact they unwound the deal after it funded. I also had to sell higher rates on 9/11 when all other banks lowered thiers. I have a lot to offer. I was pressured buy regional vice president Archie Green. On Selling higher rate loans. I quit because I felt I was in a hostile inviroment. please lets correspond.

   ray

9. dana joseph
   Dec 16th, 2007 at 8:01 pm

   okay Ray, let’s. I was a VP in the wholesale lending division and I was pretty close to the managing director - only having 2 managers between him and myself - and there was never, ever any mention of trying to get Landsafe to lower a value to make more money. Seriously, we lost loans and “credibility” with our brokers by cutting values. It happened a lot. I had to correspond with Landsafe frequently on behalf of the Brokers as a Production Manager and try to fight the values and they really were of the belief that the broker’s appraisers were pushing values. It turns out this was true. Wholesale did not make any “points”, we charged the same price no matter what the loan amount or ltv so I don’t see why this would benefit us. You can reach me at gibbdana@verizon.net if you would like. i am one of many that are now unemployed and unsure of what to do. I have some ideas of what we can all do in the future, however, and would be glad to give them to you as well. I just think it would be wrong for me to not step out and say that I knew people at the top of Landsafe and at the top of Wholesale and that I think all that they were interested in was the true value of the homes we were lending on, really!!!!

10. Jose
    Dec 16th, 2007 at 9:14 pm

    I have a client who owned his house for 20 years. Countrywide loan office convinced him to refinance his house and take out all the equity. He then convinced him to purchase three other homes with the equity. All four homes were financed as owner occupied at the same time with the pick a pay program. How is it possible that you so called managers, vice presidents and so on did not catch this. My customer will now loose his current home. All the rpoperties will go to foreclosure. I am sure countrywide and the countryide loan officer involved made a lot of money. You should see what these guys got in the back end. Where were you Mr. Vice-president. Mr. Jerry Brown would love to see the set of loan documents I have. The original loan officer, selling agent and the vice president of this particular sub-prime unit should all go to jail. By the way, all four loans were sub-prime loans.

11. dana joseph
    Dec 17th, 2007 at 1:34 am

    my name could be ms. or mr. but I am actually a ms. Mrs. Joseph to be exact. You know, I can’t speak for every employee of Countrywide. Had I known of that particular scenario I would have worked to get the loan officer fired and would have fired the operations staff if they were in on it. A lot of the tale of the mortgage meltdown is greed and fraud. It sounds as if what you have described encompasses both. It’s sad and it’s human nature. All I am trying to say is that we did our best to fight it and it was not what we were about. I do believe that there were lenders out there trying to just make a buck. Countrywide was not one of them. They had a business, a real business that they wanted to run. A real business operates with ethics and with vision and understands that short term profits and the ethical shortcuts required to make them do not make a “real” business nor do they benefit anyone in the long run. I’m sure we had some crooked people amongst us - we were human, it happens. I know for a fact that my own supervisors would share my sentiment that the individuals in the scenario you provided should not have been allowed into Countrywide in the first place.
    This meltdown benefits noone. We were smart enough to know that greed and fraud like that would have led us down this path. I know we would have wanted no part of it. I have found that doing the right thing lands you exactly where you want to be - in a free society we can strive for that all we want but will always trip up along the way.

12. dana joseph
    Dec 17th, 2007 at 1:46 am

    I’m new to this blog thing so I apologize about my add ons. It sounds like what happened to your borrower was terrible and I hope that he is able to keep his home somehow. I was a borrower once myself - long before I was in the business. It is easy to understand why a borrower can sit in front of a loan officer and not really understand what he is getting into. I hope that changes. If nothing else comes of this, I hope that that changes! I know of a special division within Countrywide that is dedicated to keeping borrower’s out of foreclosure. It is real, not just a press thing. I will have to get the number for you but if you email me at my personal email I will be happy to send it back to you and hopefully it can help your borrower. I have a friend that works in this division…..

13. bigcityloans
    Dec 17th, 2007 at 11:15 am

    Jose — so what you are saying is that your “client” had no responsibiltiy for his actions … no responsiblity for “over extending” his financial capacity … no responsibility for “executing” three purchase agreements … no responsibility for “applying” for four different loans … no responsibility for “ensuring” that his information that was presented to the lender on the loan applications was accurate because if it was accurate then he would be able to make the payments on the four homes for which he borrowed money. You are right that the CW LO shared in the conspiracy … however … it was your client who closed the deals and … ultimatley … should share the pain of the responsibility of his irresponsible (and perhaps fraudulent) actions.

14. Jose
    Dec 17th, 2007 at 8:42 pm

    bigcityloans. I completely agree with you. However, my client, does not speak or write English. He should have had some else look at the docs. He did not. The Countrywide loan officer should have never put him in that postion to begin with. The client makes 10.50 and hour. His 1003 states that he makes 14,000. per month. Lets just say for argument sake that the client spoke English and was able to understand what he was signing and he was greedy and so on. At what point does a Countrywide processor, underwriter, manager or whoever stops and says “wait there is something wrong here” lets stop this from happening. No one from Countrywide took the time to stop this. I called Countrywide. They transfered me to their fraud department. I was told that they could not take the complaint since they believe no fraud occured. WHAT??? The whole thing is a mess.

15. JacMac
    Dec 18th, 2007 at 12:40 am

    I’d like to ask Dana Joseph, since she believes in Countrywide’s integrity, what she is personally doing, as an employee of theirs in a position to help, to come to the aid of the many countrywide homeowners going through the mysterious process of loan modification and who are facing foreclosure?

16. alan
    Dec 18th, 2007 at 1:12 am

    So Jose, that client of yours, where did he live 20 years ? Is it good old USA ? BTW, how did he get his first mortgage, one that used to buy the house 20 years ago ? Did he have documents in Spanish then ?

17. bigcityloans
    Dec 18th, 2007 at 11:49 am

    Jose … I concur with you that Countrywide’s LO was a part of the conspiracy to commit fraud … however … your client was a co-conspirator. The “no speak / read english” defense is hard to believe since you stated that your client owned a home in the US for 20 years. However, even if your client cannot speak or read english … he is certain to know what the numbers mean. Let’s see … he earns about $420.00 a week … about $344.00 after taxes (he does pay these, correct?) This income supports a monthly payment of about $670. or a loan of about $70K @ a 45% debt ratio, factoring in some money for real estate taxes, insurance, utilities & maintenance and assuming that he has no other debt. Yet, your client cashed-out of his home … borrowed money to purchase three other homes … and we should believe that your client had no knowledge of what he was doing. Yes, CW’s LO and operations staff were a part of the fraud … you could make a case against the realtor and builder, if it was new construction … as well as the attorney present at the closing(s) … but your client is not absolved from his actions … after all … he was the one who acknowledged by his signature that he earned $14,000.00 per month on not one but 4 loan applications … knowing that he earned only $10.50 per hour or a little less than $22,000.00 per year. If you choose to pursue that there was a “fraud” committed, try contacting the DA’s office … however … you should be thoroughly prepared to defend your client as well.

18. JacMac
    Dec 18th, 2007 at 6:11 pm

    I found this speech interesting as well. Much to do has been made about the CAUSE of the subprime crisis. Governor Randall S. Kroszner of the Board of Governors of the Federal Reserve System testified before the Committee on Financial Services, U.S. House of Representatives on December 6, 2007 and had much to say on the subject:

    HERE ARE SOME OF THE HIGHLIGHTS:

    “In recent years, the subprime market has grown dramatically, enabling more and more borrowers to obtain credit who traditionally would have been unable to access it.

    “The growth of this market is well recognized. Also well recognized are the problems that have arisen with these changes. The Board believes that responsible subprime lending has an important role to play in expanding credit to traditionally underserved borrowers. IT ALSO RECOGNIZED, HOWEVER, THAT SOME OF THE LENDING UNDERTAKEN IN RECENT YEARS WAS NEITHER RESPONSIBLE OR PRUDENT.

    “. . . . some borrowers whose mortgage balances exceed their house values may be tempted to walk away from their loans. Borrowers who purchased properties solely for investment purposes may be more likely to default in this situation; INDEED, THE MORTGAGE BANKER’S ASSOCIATION HAS FOUND A DISPROPORTIANTE SHARE OF SERIOUS DELINQUENCIES ARE ASSOCIATED WITH NON-OWNER OCCURPIED PROPERTIES IN SOME OF THE STATES WITH THE HIGHEST INCREASES IN DELINQUENCIES.

    “A recently released study by the Federal Reserve Bank of Boston attributes most of the recent rise in foreclosures in Massachusetts to declining house prices.2

    “Over a quarter of homeowners report that their houses decreased in value over the past year, just a bit above the level last seen in the early 1990s.1 These price changes will affect homeowners’ abilities to resolve financial troubles by refinancing their mortgages or pulling equity out of their homes, and may lead to increased defaults.

    “Borrowers who have lost their jobs, not surprisingly, may have difficulty meeting their mortgage payments. Thus, increases in unemployment in certain areas, such as states in the Midwest struggling with job cuts in the auto industry, are another major factor contributing to higher delinquency rates.

    “The final major factor explaining the current increase in delinquency rates is the APPARENT DETERIORATION IN UNDERWRITING STANDARDS beginning in late 2005. An increasing number of subprime loans were made with layers of additional risk factors, such as a lack of full documentation or very high loan-to-value ratios. Much of this weakening in underwriting standards happened outside of institutions regulated by the federal banking agencies. In addition, prior to late 2005, high demand for housing and rising house prices allowed borrowers to recover from these risks through profitable home sales and refinancings, HIDING THE WEAKENED UNDERWRITING STANDARDS FROM VIEW.

    “The slowdown in house prices, coupled with shifts in underwriting standards, are the most likely explanation for the pronounced rise we have seen in defaults occurring within a few months of origination, before most borrowers would have experienced significant changes in their payment obligations or in their financial situations.

    “Looking forward, we expect the substantial payment increases often experienced at the first interest-rate reset to result in higher delinquencies.

    “If the benefits of homeownership are to be realized, we believe that homeownership must be sustainable and that access to responsible lending be available for consumers. To achieve this, the Board believes that there must be appropriate consumer protection and responsible lending to traditionally underserved borrowers.

    “. . . enforcement of consumer protection laws and regulations is critical

    “As I will discuss further in a moment, we support these efforts (LOAN MODIFICATION) because foreclosure is generally the worst possible option for CONSUMERS, INVESTORS AND COMMUNITIES AND SHOULD BE AVOIDED WHENEVER OTHER VIABLE OPTIONS EXIST.

    “Changes to existing terms, however, should not be made lightly, should be consistent with safe and sound lending practices, and should not be made when they are only delaying losses to investors and consumers. In short, we should pursue sustainable solutions.

    “The Board recognizes, however, that improved disclosures are necessary BUT NOT SUFFICIENT to address the problems. In addition to these actions, therefore, the Federal Reserve will exercise its rulemaking authority under the Home Ownership and Equity Protection Act (HOEPA) to address UNFAIR OR DECEPTIVE mortgage lending practices. At the same time we propose the TILA rule changes on advertising and timing of disclosures, we will issue, for public comment, significant new rules that would apply to subprime loans offered by all mortgage lenders.

    “we are looking closely at practices in the subprime mortgage market, such as prepayment penalties, failure to offer escrow accounts for taxes and insurance, stated-income and low-documentation lending, and the failure to give adequate consideration to a borrower’s ability to repay.

    “The Mortgage Reform and Anti-Predatory Lending Act of 2007, which was passed by the House of Representatives last month, would extend additional oversight and consumer protections to the market.

    “A second issue is the possible imposition of civil money penalties when the enforcement agencies find that there is a pattern or practice of violations. Penalties collected would be used to establish a trust fund for those consumers whose interests had been harmed but who lack a remedy in the event, for instance, that the responsible party has gone out of business.

19. JacMac
    Dec 18th, 2007 at 6:12 pm

    Here’s the link: http://www.federalreserve.gov/newsevents/testimony/kroszner20071206a.htm

20. Dana Joseph
    Dec 18th, 2007 at 9:55 pm

    Jac Mac - If you read through the blog you would see that I have been laid off from Countrywide. You would also read that I offered my personal email address in this public blog to Jose so that he could contact me. I still have many contacts within Countrywide and have access to a group that may have been able to help Jose’s client. Jose has never contacted me - guess he is not interested after all.
    BigCity has such a great point - when are we going to start holding borrowers accountable for knowing what they were getting themselves into?!?!
    As for the staff at Countrywide involved in Jose’s situation - first I’d say that we don’t know the whole story. Next I’d say that - yes - there are probably crooked and greedy people employed at Countrywide. These are individuals. I personally have put my stamp in one way or another on what must be thousands of these “subprime” loans. I know what we were approving and funding and what we turned away. I know the message sent to me from my superiors and the message I trickled down to my employees. We were considering the benefit to the borrower, the reasonability of the income and the transaction. We took great care to make sure the values on our appraisals were not pushed. It’s time some truths were told.

21. JacMac
    Dec 18th, 2007 at 10:31 pm

    Dana, why so defensive? Obviously, I had not read that you’d been laid off or the offer you made to Jose. I’m sorry you got laid off, that has to be tough on anyone and who knows what is going on with Jose, so I’m not going to assume.

    I make no bones about it, I am no fan of Countrywide and I’m not ready to discount the many stories here of people who are trying to modify their loan in good faith and being stonewalled.

    Why is it that Countrywide is in the middle of so many loan-gone-wrong-stories? And Loan-Mod-stand-still stories? And toxic slime-loan-strangles owner stories?

    Different loan, different buyer - same story and Countrywide is right in the middle. Doesn’t it beg to question?

    The view of Countrywide as this herald of prudent lending practices and accountability by former CW employees reminds me of the child in the abusive home who is invested in not seeing the abuse that is going on right in front of their face. In that situation, the idea that the child could be a part of something so horrible and gruesome is too painful and overwhelming so the child opts not to see– then the child grows up into an adult who opts not to see.

    In order for the massive fraud on the American people that has gone on in the mortgage industry to have gone on for soooooo long their had to be many participants AND many who turned a blind eye AND many who didn’t pay enough attention to what was going on and still others who saw and did nothing.

    I hate to hear people say in the face of corruption BUT I DIDN’T DO IT.

    It’s the old bystander effect. Bystanders suffering from this effect go through this two step — three step — no eight step dance and have the opportunity to do something but ultimately decide every step of the way to do nothing.

    In this case,
    1) notice the corruption or
    2)miss noticing the corruption because they’re preoccupied
    3) Realize there’s corruption but
    4) assume that as others are not acting, it isn’t corruption
    5) Assume responsibility for corruption or
    6)assume that others will and so they don’t have to or
    7) Know what to do about the corruption and do it or Don’t know what to do about the corruption and do nothing because of worry of embarassment, legislation, backlash, retaliation, saving their own skin, et cetera.

    I’m sure many people at CW were suffering from this “ailment”.

22. alan
    Dec 18th, 2007 at 11:19 pm

    JacMac,

    If you ever did stated income refi and benefited from it however short lived that benefit was you ARE PART of problem. If you saw inflated income on 1003 and signed it and did nothing well surprise, you are party to the fraud scheme just like that sleazy LO.

23. JacMac
    Dec 18th, 2007 at 11:46 pm

    Alan,

    A pickpocket looks at a man and sees his pockets.

    A priest looks at a man and sees his soul.

    Connect the dots . . .

24. alan
    Dec 19th, 2007 at 12:12 am

    Oh, I see, one more rationalization why it’s ok for borrower to lie. Nice try. Anyone lied or abetted to lie on application is complicit to fraud and no amount of twisting is going to change that. They are not victims, they are fraudsters, to lesser degree than LOs but fraudsters nonetheless.

25. JacMac
    Dec 19th, 2007 at 12:17 am

    Oh, Alan *sigh*

26. bigcityloans
    Dec 19th, 2007 at 12:24 pm

    Jac Mac … perhaps we should come to the aid of those people whose automobiles are being repossessed … or perhaps those people who decided not to pay their taxes whether they be income or property … or those people who over-purchased on credit cards and cannot pay their bills … or those people who choose not to pay child support … or people who choose not to work … or people who gamble their paycheck at the track or casino.

    These are the same characteristics of most of the people who gambled on the stated, no ratio or no doc loans whether they were subprime or Alt-A. In essence, they rolled the dice and lost. Next time they will think twice … perhaps … but only if they are held accountable for their actions now … because it’s too easy to pass blame … bottom line is that the borrowers closed the deal and took full responsibility for their actions … the lender is accountable for other matters … and giving the borrowers who misrepresented themselves a free pass is not one of them.

27. dana joseph
    Dec 19th, 2007 at 1:32 pm

    Alan,
    Countrywide is in more of these stories you hear because it did so many loans - of course you will hear our name more often. We did what we did mostly because so many of us thought appreciation was a sure bet. Take a borrower who has poor credit but wants a home. A home is not like a car, it cannot be moved. Your collateral is therefore pretty solid. The borrower cannot hide it from us if he stops paying so we can always take it back. Lending the borrower the money to buy this home gives him the opportunity to really clean up his credit with a good mortgage rating. We all believed that most people would pay their house payments, they may blow off Visa, but not the mortgage. So we put the borrower in a $100,000 house on a 2/28 ARM. Because of his low FICO his rate would be really high but the ARM rate is much better and more feasible for the borrower. Yes, it will adjust but the idea is for him to pay his mortgage well over the next 2 years and improve his credit score. Additionally, his house will be appreciating so his LTV will be lower. In 2 yrs, his score is better and his LTV is lower so he is a much lower risk borrower and can refinance into a prime loan with a low fixed rate. Does all this cost him more? Sure, that’s the price you pay for having the poor credit in the first place. Is this a benefit to this borrower? Absolutely!
    I wish I could show you the number of loans we turned away over the years and why. I think you would be amazed. We tried our best to make good decisions on loans. We were concerned with 3 things - could they repay? would they repay? did the loan make sense for the borrower and if a refi - did it benefit the borrower?
    I will offer this. I believe a huge part of this meltdown is mortgage fraud. Lenders don’t talk about it as far as I can see and I don’t think it is prosecuted. Because of that, it’s not as well known. The number of property flip schemes and straw borrower schemes out there is phenomenal in my opinion. Fraud has gotten so much more sophisticated too. There are websites that you can go to where they will make up paystubs and w-2’s for you that are good enough to fool a lender. These websites say it is for “entertainment” purposes only. They will even verify employment for you. They have phone numbers that are listed to phony business names so the lender can verify the phone number, call it and get a verification of employment for you. Fraud for profit is a huge part of this mess. Not all of these foreclosures are famililes that have been put out on the street - many of them are empty homes purchased through the use of a straw borrower as a scheme for profit and the lender is left holding the bag.

    Thanks for the sentiment Alan - some of the victims of this crisis are the unemployed mortgage professionals out there. There are no mortgage jobs and many of us have to start all over in a new profession.

28. JacMac
    Dec 19th, 2007 at 5:04 pm

    I must be in bizarro world. Moe has created this wonderful place to let the community know what is going on, but most especially homeowners who have been preyed upon and defrauded by a SYSTEM which had a fiduciary duty to approve buyers using sound lending protocols and who failed in their duty to do so and yet many of these posts disintegrate into a “blame the buyer” conversation, while many ex-brokers and capitalists repeat themselves over and over, sticking to one point: The buyer signed the papers..

    To put the onus solely on the buyer, even if the buyer had dishonest intentions is beyond comprehension. It speaks to an industry peopled by a mindsight that remains desperate to remain unaccountable, which is what lead to this crisis in the first place.

    If there was an upsurge of automobile owners defaulting on their loans, a crisis, because of lack of accountability and the creation of over inflated values on cars due to the existence of “exotic” loans where buyers were given access to millions of dollars, which banks solds and investors bought knowing full well that there was a grave risk that these same buyers would not be able to make the ever increasing payments on the overinflated loan value for a car who’s worth is based on a fanthom number that isn’t real, than HELL YES, the whole of America should rise up in arms and come to their aid.

    This is frustratingly beyond ridiculous. Everytime Moe painstakingly explains the realities of this situation, no matter how many reasoned, rational experts in the industry who have spoken to the WHOLE issue are sited, we have these posters who are so dogmatically invested in seeing only one side of the issue — the dishonest buyer — while ignoring everything else that the conversation never gets to the point of discussing real, workable solutions.

    Many of the unemployed mortgage professionals out there DESERVE to be unemployed. For them, the day of accountability has not yet come perhaps but they are certainly dealing with the consequences of their actions.

29. JacMac
    Dec 19th, 2007 at 5:07 pm

    Dana,

    The Fraud you so painstakingly describe would NEVER have been able to take place to the extent it has and with the disasterous consequences that is has IF it was not aided and abetted by the banks, the Loan Officers and the brokers who have a fiduciary duty to APPROVE the buyer of the loan using sound lending practices.

    Where is your angst against the lenders, brokers and banks who allowed their money to fall into the hands of swindlers?

30. Dana Joseph
    Dec 19th, 2007 at 8:04 pm

    I have never once said that all of the blame is on the buyers. Everyone is in such a rush to blame someone that I believe they are placing all of the blame on an industry that I have been a part of for a long time. When I say that I put my own stamp on thousands of those loans myself, I mean it. I and my colleagues were more afraid of our QC department (a department that would review our loans and look for mistakes and bad decisions) than we were of anything else!! Countrywide was obsessed with quality and in fact my bonus got cut if I made a poor decision or mistake. This was stressed more than the number of fundings. I am tired of hearing Countrywide villified in the media when it was operating with integrity. I was at ground zero - the Subprime Lending Group!! I am telling you that I saw what we would approve and what we wouldn’t.
    To say that out of work mortgage professionals deserve to be out of work is a heinous thing to say. You don’t know them! Many of the people out of work are not the executives (but we are getting to that point) or decision makers but the front line people. We were putting people in homes and more importantly giving people with poor credit a second chance. Hindsight is 20/20 and it’s easy for you to sit there and judge what we did now.
    As for the fraud, we fought it every day. Declined loans for it all the time. I am sure that a lot of it got by us anyway.

31. Moe
    Dec 19th, 2007 at 8:30 pm

    Dana, there were many people with caharacter such as yourself and that is great. But there were more that didn’t have too much integrity and in fact, they were greedy pigs.

    Countrywide was the biggest toxic lender because they are the largest lender. Kind of like the Exxon Valdez of lenders. So, naturally, Countrywide has masively contributed to the mess that our country is in.

    They sold billions of toxic mortgages and now they are refusing to really act and clean up their mess as their CEO cashes in BIG TIME and Amercian homeowners are losing their homes. Over 1 million Dana.

    Countrywide has 500,000 homeowners that are delinquent or in default. They have helped few. Yes, they are such a great lender, not!

    Not an attack on you but your former employer that you love.

32. Dana Joseph
    Dec 19th, 2007 at 8:52 pm

    Thanks Moe. No matter who is to blame, reality is that it is a very sad state of affairs. I was a borrower once prior to being in mortgage and I must say it was a confusing and overwhelming process. I’ll admit that I didn’t know enough about it and could have likely been taken advantage of. I am hoping that as terrible as all of this is that we find a better way to do things.
    Please consider this though - just because Countrywide is the largest lender doesn’t mean it is the most toxic. I think that it has been made a bigger target because it is the largest. Competition between lenders drove a lot of the loosening of the guidelines. If your competitor is doing it but you aren’t - they they get the business. From what I could see, we were always the last kid to jump off the bridge. A colleague of mine from another big subprime lender who came to us told me how amazed she was that we actually had underwriters! She told me she used to wonder where all the underwriters were in her previous company. They finally told her they didn’t really have them. Countrywide was definitely not the most toxic!

33. JacMac
    Dec 20th, 2007 at 11:08 am

    Dana, I think the mortgage brokers who were corrupt deserve to be unemployed.

    As far as Countrywide, I think your opinion of them is skewed and you are refusing to look at the overwhleming evidence of their deceitfulness and gress as a company on the whole, but that’s just my humble opinion.

    If Countrywide is so great, they should have kept you on and not laid you off. THey received massive amount of funding from the federal reserve and other banks. THen they turned around and laid off thousands of people. That doesn’t help the economy.

34. JacMac
    Dec 20th, 2007 at 11:09 am

    I wrote deceitfulness and gress but I meant greed or maybe I was trying to type gross, as in grossness, too, because that fits also.

35. Moe
    Dec 20th, 2007 at 11:51 am

    Dana, they sold the same loans as everyone else. They sold the most of these loans. Have you seen their REO Portfolio? It is huge!

    http://www.countrywide.com/purchase/f_reo.asp

    They will own 250,000 of these properties before it is all said and done.

    My big beef with Countrywide isn’t that they did all these loans, it is because they are NOT REALLY puting a Countrywide effort to assist struggling homeowners that are delinquent or in default.

    They need to clean up their image by helping homeowners and stop putting dumb commercials on the TV about no costs loans and maybe some commercials aimed at helping homeowners.

    Thier loyalty is orginating loans and this is it. They need to change their tune and help the American people who made them the #1 lender.

    So, what can you do to help us help more Countrywide borrowers? I get people every day that are in loans they could afford before but now they can’t because it has adjusted and CW is not helping them, even though they claim they are.

    Who do you know is loss mitigation that can help me help CW borrowers?

36. bigcityloans
    Dec 20th, 2007 at 11:55 am

    Dana — the reality is that there should never have been a stated wage earner program at 106% financing or any type of stated program for that matter …. how difficult is it for a borrower to provide W2s and paystubs ??? … for self employed … if tax returns did not support sufficient income … then bank statements should have been used to document income … not merely stating income … these loan products were designed to fail … because … it was too easy for borrowers, brokers and LOs to manipulate the information on the application to meet guidelines … but the lenders should suffer the consequences of these failed programs as well … however … the borrowers should not be bailed out either … not everyone in America has the earning power to own a home … that is why there are apartment buildings.

37. dana joseph
    Dec 20th, 2007 at 1:07 pm

    JacMac - I agree that all the crooked brokers out there should be unemployed and in fact, I think they should all be in jail. They laid me off because my division was dissolving.

    Moe, Countrywide did not keep it’s loans, it sold them. We are a huge servicer for other investors - for loans we have sold and then just a servicer for other loans. Again, the sheer number of the loans we service is what puts our name out there so much. We did not originate all of those but since we are servicing them, we are the folks people are having to deal with. Listen to me - still saying “we”! LOL. Please email at my email address earlier in this blog and I’ll give you the info.

    BigCity - agreed. Stated W-2 was stupid!! We did at least use Salary.com and the borrower’s credit profile and the amount of assets that they had (verified at underwriter’s discretion) to determine “reasonability”. Problem was - everyone else was doing it (stated). Our Brokers would go to other lenders if we didn’t do it too. We wouldn’t just lose the stated w-2 loans, they submit all their good loans first to another lender if they felt we were too tight.

38. JacMac
    Dec 20th, 2007 at 1:37 pm

    Big City, I agree with you. The stated option created crooks out of lot of professionals in your industry.

    That being said, as it is said often when a buyer says she/he’s been defrauded, no one FORCED Countrywide to close on stated loans, and to say, well everyone else was doing it is just childish.

    The loan brokers I dealt with overstated my income by $8,000.

    How?

    Well, I dealt with them only by fax. The sent me the signature document of the application claiming I was only signing to lock in my rate.

    What did I know? I foolishly trusted them. At the closing, I got a copy of an illegible copy of the application which states, if you look real closely at it, that my income is a wapping $14k a year. I gave them all of my 1099s and my income statements. What did they do with them?

    The insentive of a huge YSP I’m sure lead them to go with a stated doc instead, and of course they walked away with the money, $14,662 and I’m lefting with the crappy loan.

39. JacMac
    Dec 20th, 2007 at 1:40 pm

    Not 14k a year — 14k a month.

40. bigcityloans
    Dec 20th, 2007 at 3:23 pm

    Dana — as a lender business cannot be predicated on funding applications that should not be funded because you would be “blackballed” by brokers if you did not. It would have been better for you to terminate those brokers … send their phony paperwork to the banking authorities … and have the feds take the lead.

    As far as “reasonability” of income … salary.com gives a range at best … did you use the low end, high end or a gross up of the high end …use of credit … i believe CW had a no tradeline program … assets … what were your seasoning requirements … 30 days? — just because everyone else was committing “white collar crime” … not an excuse for CW to become part of the pack.

41. bigcityloans
    Dec 20th, 2007 at 3:43 pm

    JacMac — you are right … lenders should not have closed most of the stated loans … however … executive compensation at the lenders was based on production … these executives knew that the paper was phony … however … they told employees like Dana to keep pushing the paper through by justifying the application by information posted on salary.com as well as other ploys created by the execs.

    Your own loan … i assume that you did your due diligence and went to several lenders prior to closing with the “fax-in-the-night” brokers … so … either your application did not meet conventional underwriting guidelines (Fannie / Freddie) or you believed that the brokers you chose were the “mystics” of the mortgage world and would work wonders for you … unfortunately for you … they were not … could not … and … did not … yet … you closed.

    As far as YSP … a broker has the potential to earn more YSP from full doc Fannie / Freddie loans than with a stated Alt-A or subprime programs … while at the same time providing their clients with better rates … so … i have to believe that there is more to your story.

42. JacMac
    Dec 20th, 2007 at 10:19 pm

    BigCityLoans, if you want to know about my story — ask.

    But don’t use those fancy, sarcastic terms when you’re talking about my home, and the possible loss of it because I have been defrauded.

    I went to different mortgage brokers. One had my paper work for a couple of months and said that my credit was so good he was trying to find the right loan for me and the guys in his office were fighting over it.

    He came back with a loan from CW but I didn’t like the looks of it — mind you, I had no experience with loans, didn’t know a YSP from my ABCs and didn’t understand what an ARM really was.

    You can call me niave or stupid if it floats your boat and makes you feel better but that’s the short end of it — I was ignorant.

    I foolishly believed the brokers WOULD inform me. I asked questions and tried to understand what they were saying.

    I previously refinanced with a very nice Loan Officer, I paid the closing costs, $12K and she consolidated my original note, and the second mortgage that was earning %12.99 into one loan with a nice payment, no neg am.

    I was lucky and didn’t know it. She was honest. I thought she was just doing her job.

    I didn’t believe the brokers who defrauded me were mystics. I thought they were HONEST. I thought they actually meant what they said, and did have my best interst at heart.

    Like I said you can call me all the names in the book if you want to, if it makes you feel better but that was the situation. Period.

    It’s too bad that I didn’t meet up with someone like Dana Joseph (and I am NOT being sarcastic.)

    I would have rather they turn me down for a loan ten thousand times than be in the situation I am in now, thank you very much.

    I have always paid my bills on time and in full, I have perfect credit, so what the hell do you mean by “fax in the night” — I never said that.

    I have a jumbo loan, so no, it doesn’t meet conventional FANNIE/FREDDIE guidelines.

43. bigcityloans
    Dec 21st, 2007 at 1:24 pm

    JacMac — so if you have perfect credit and document sufficient income to support your obligations … then … why did you not walk into a bank and secure an “A” graded loan? Jumbo money was priced only one quarter of one percent higher than conforming money prior to August of this year. However … it sounds like you closed on a neg am product … for which you probably have every reason to be upset since these products should never have been offered through “wholesale” channels to mortgage brokers since brokers never received the proper training to educate their clients on how these products would effect their clients financial well being over the long term. (Yes, brokers who sold neg am products received incentive YSP based on the margin that the ARM was sold. The higher the margin the more money they were paid by the lender for placing the loan.)

    No … JacMac … you are not ignorant … you got caught up in the “shell game” that was being promoted by several lenders to mortgage brokers. You … and … many thousands of others.

44. alan
    Dec 21st, 2007 at 3:19 pm

    bigcityloans,

    Do you know for a fact that jumbo 30-year fixed paid more to the broker than SA/OA ? I was under impression that incentive was geared toward these land mine loans rather than vanilla fixed ones.

45. bigcityloans
    Dec 22nd, 2007 at 2:30 pm

    Alan — yes — at the same rate — apples to apples — remember that pricing is determined by risk — the higher the risk the less YSP, if any, will be paid at a comparable rate. The program that was being sold to garner more YSP was the “pay option ARM” program or neg am program. Brokers were able to increase their YSP by increasing the borrowers “margin”. Another way that brokers manipulated and increased YSP on subprime loans was to include a prepayment penalty because lenders would pay a higher YSP for a loan that would be on their books longer at the higher interest rates offered through subprime products.

46. JacMac
    Dec 23rd, 2007 at 12:11 pm

    “No … JacMac … you are not ignorant … you got caught up in the “shell game” that was being promoted by several lenders to mortgage brokers. You … and … many thousands of others.”

    Thank you for your comments, BigCityLoans.

    That is EXACTLY what happened to me, I got caught up in a shell game and it feels good to have MY PERSONAL situation validated and not tossed into a heap of those who were looking to defraud the banks or use the system.

    The fact of the matter I asked the LO exactly what she was being paid and she referred me to the Loan Origination fee, and said that was it. I knew nothing about the YSP or the prepayment penalty. The prepayment penalty in my loan documents appears at the very top of the second page of a document on which the first page is half empty. The 1st page reads MERS in bold letter centered in the middle and explains that if I pay my principal in advance I won’t be penalized. At the very top of the next page is very confusing language which, when defined by a professional, explains the percentage points (not dollars but points!!!!) I would be asessed if I paid off my entire loan before a three years period.

    I, myself, being unfamiliar with the industry would have never known what it meant. But even so, I asked so many questions that LO seemed very frustrated with me and that made me feel very uncomfortable and wary. Also, I didn’t like the margin or the rate — but please understand this is all 20/20, my putting together all of the feelings I had and problems which came up.

    When I tried to walk away from the deal and rescind, after I FOUND the right to recission papers in my closing documents because they certainly DID NOT POINT IT OUT TO ME, he broker told me he would “massage” the loan — I kept asking WHAT DO YOU MEAN BY MASSAGE and he kept trying to explain it in a number of ways, EVERY WAY BUT BY TELLING ME THE TRUTH , which now I understand meant he was going to buy down the loan with his YSP — he reduced his YSP by over $10K so I WOULD close on the loan but of course, never told me about the prepayment penalty.

    What kind of business traps people into toxic loans by penalizing them with a huge monetary cost if they try to PAY EARLY????

    I wouldn’t give a damn about this loan and the mistakes I made IF I COULD GET THE HELL OUT OF THE LOAN W/O BEING FINANCIALLY SLAUGHTERED!

    But now their are no more products out there being offered for the likes of me, and thousands of others caught in the same trap.

    So the pitch: Don’t worry, you can refi out of the loan in two or three years, this is just for right now and look at how much money you’re saving was a BIG FAT LIE!!!!

    It seems plainly unethitical to me, but I’m not in the business.

    The reason why I didn’t just walk into a bank and do it that way?

    I didn’t know there was a difference. I thought it was all the same players within the same pool. I tried to contact the woman who did my previous loan for months but couldn’t find her, she had moved on from the bank she worked on.

    I spoke to a person who owns three brownstones and had been in the “game” for over ten years and ask him advice on what to do and he said that “they’re all the same, looking to make a buck”.

    So I asked the questions of this mortgage broker that I thought needed to be asked and I was lied to over and over.

    I don’t know about others but THAT’S MY STORY.

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