Meet Tracy Warren. NPR says she’s not surprised by the mortgage meltdown because she was supposed to be in charge of preventing it. Tracy worked for a quality control contractor that reviewed subprime loans for investment banks before they were sold on Wall Street, and her company’s biggest client was none other than Bear Stearns. Tracy says she found plenty of loans to reject. The trouble is, according to Tracy, after she rejected them… her bosses unrejected them.
subprime meltdown
Countrywide CEO Accidentally Emails Homeowner, Calls His Plea For Help "Disgusting"
By 5.21.08
Apparently Angelo Mozilo, the CEO of Countrywide, has never made a mistake and needed help (from, say, Bank of America,) because he thinks that homeowners who are desperately trying to refinance out of their disastrous home loans and avoid foreclosure are “disgusting” if they look to the internet for help writing letters.
By 5.13.08
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Last week the best radio show ever, This American Life, tackled the housing and credit crisis by talking to some of the real people involved with packaging junk no-proof loans into “sensible” investments. In the words of host Ira Glass and friends, it all comes back to “The Giant Pool Of Money.” [This American Life]
Countrywide Still Asking Consumers To Lie About Their Income
By 5.6.08
Countrywide would like you to believe that it put all that messy “predatory subprime lending” business behind it and is no longer coaching consumers to lie on their loan applications in order to qualify them for loans they can’t afford… but are they telling the truth about telling the truth? One woman who recently contacted Countrywide about refinancing her home told NPR that sketchy mortgage lending is alive and well at Countrywide.
How The Candidates Would Address The Foreclosure Crisis
By 4.28.08
Mark Ireland, former Minnesota Assistant Attorney General, took a look at what the three remaining presidential candidates are saying about the foreclosure crisis and translated their campaign-speak into good ol’ American English.
Why Few Seem To Be Able To Work Out Better Loan Terms
By 4.25.08
Call it what you will, the borrower bailout/rescue/whatever does not seem to be working. Foreclosures are still on the rise along with defaults and sad stories. And while those numbers go up, the economy continues to worsen.
By 4.23.08
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Bob Lawless considers why fewer homeowners walk away from “underwater” mortgages than you might expect. [Credit Slips]
No Help For 70% Of Homeowners Facing Foreclosure
By 4.23.08
A new study shows that despite the best efforts of lawmakers and mortgage-service companies, little is actually being done to help homeowners facing foreclosure, says the Wall Street Journal.
WaMu Reverses Decision To Exclude Subprime Losses From Executive Bonus Calculations
By 4.22.08
Activist shareholders forced big changes at a Washington Mutual stockholder’s meeting last week, especially the reversal of a much-criticized decision to exclude subprime losses when calculating executive bonus pay. Washington Mutual was one of the lenders cavorting the most eagerly in the refuse trough of subprime lending, and has endured some of the largest losses as a result. Other key shareholder wins included splitting the CEO and Chairman position, and the resignation of several key board members. Nice job, activist shareholders, way to wake the hell up long after the damage was done.
By 4.22.08
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Bank of America says it will tighten lending standards at Countrywide. [MarketWatch]
Real Estate Speculation: From A Trailer Park To Foreclosure On 4 Homes
By 4.21.08
The Minneapolis Star-Tribune has a fascinating article about real estate speculation in Minnesota. The article focuses on Bradley and Sarah Collin, a couple with three children who were living in a trailer park when they were suckered by a local “property management company” that (illegally) paid the couple $20,000 cash to buy 4 houses in a new subdivision.
1 in 33 Homeowners Predicted To Be In Foreclosure Within Next 2 Years
By 4.17.08
For those of you hoping that foreclosure crises has hit bottom, we’ve got some bad news. A new report released by the The Pew Charitable Trusts says that 1 in 33 homeowners is expected to be in foreclosure over the next two years, due primarily to subprime mortgages made in 2005 and 2006.
WaMu CEO Compares Mortgage Meltdown To The Great Depression
By 4.16.08
WaMu announced today that they lost $1.14 billion in the first-quarter and CEO Kerry Killinger said that nothing of this scale had happened “since the Great Depression.” Comforting!
“Nothing of this scale has happened since the Great Depression,” Chief Executive Kerry Killinger said at WaMu’s annual meeting. “This is the toughest credit cycle I have seen in my years in the industry.”
WaMu says it will cut 3,000 more jobs, including that of Mary Pugh, chair of their finance committee who “had been fiercely criticized for failing to protect Washington Mutual from overexposure to subprime and other risky mortgages,” according to Reuters.
By 4.12.08
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Uh-oh, someone forgot to pay their bills! Exciting new data from the American Bankers Association shows that late payments on consumer loans have risen to 2.65%—an 8.6% increase from the previous quarter. People are finally wising up to the fact that ignoring your mortgage is the fast path to the easy lifestyle you always wanted. [FiveCentNickel]
Life In A Subprime Ghost Town: Not Paying The Mortgage Feels "Great!"
By 4.10.08
We’ve been hearing tales of suburban McGhost-Towns that were submerged by a tidal wave of foreclosures at the height of the subprime meltdown and are now just sitting there, the lawns turning brown one by one.
Justice Department Will Investigate Countrywide's Lending Practices
By 4.3.08
Judge Thomas P. Agresti of the Federal Bankruptcy Court in Pittsburgh on Tuesday approved an inquiry into “the impact of Countrywide’s bankruptcy procedures on the integrity of the bankruptcy process” by the Office of the United States Trustee, a Justice Department arm that polices bankruptcy filings.
