A former regional manager for Countrywide Home Loans, the mega mortgage company whose shady mortgage mill came to epitomize the subprime meltdown, went on The Today Show camera to detail some of the company’s questionable practices. Here’s some of the tricks he warned upper management about during his 6-month stint before he was fired for refusing to give loans to unqualified buyers:
housing bubble
By 5.9.08
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Dr. Housing Bubble tells the tumultuous story of one two bedroom 1 bath 825 square foot home in Santa Ana, California. The little house sold for $88,000 in 1988 and had skyrocketed in “value” all the way up to $505,000 when it was sold in 2006. The 90 year old house is current on the market for $177,495. [Dr. Housing Bubble]
By 3.4.08
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Initially, the lenders gave the impression that the majority of these loans were being given out to sophisticated investors who couldn’t document their $500,000 income and had better places to put their money to work. Clearly this wasn’t the case as we are seeing that 71% of the people are electing for the lowest of the low payments. Of course when the market in California was ripping it up by seeing 20%+ appreciation each year, making the minimum payment made sense because you were going to sell in 1 to 2 years and pocket the change. Heck, it was cheaper than renting!
Buyers Sue Agent For Inflating Real Estate Appraisal
By 1.22.08
The New York Times has an interesting article about a couple in California who are suing their real estate agent (who is conveniently also a mortgage broker) for allegedly artificially inflating the appraisal on their home by $100,000. A few days after moving in to their new home, says the NYT, “they got a flier on their door from another realty agent. It showed a house up the street had just sold for $105,000 less than theirs, even though it was the same size.”
Mortgage Fraud Festered Under Housing Bubble, Feds Investigate
By 10.6.06
In ’05, a small company bought up run-down duplexes in northeast Indiana at $50,000 a pop. Less than a month later, they were selling them for $120,000 to church secretaries, truckers, retirees and factory workers.
