Fairly or not, Countrywide Financial and its top executives would be on most lists of those who share blame for the nation’s economic crisis. After all, the banking behemoth made risky loans to tens of thousands of Americans, helping set off a chain of events that has the economy staggering.SICKENING...
So it may come as a surprise that a dozen former top Countrywide executives now stand to make millions from the home mortgage mess.
Stanford L. Kurland, Countrywide’s former president, and his team 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 recent morning 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 leather boardroom chair, even as the financial markets in New York were plunging.
As hundreds of billions of dollars flow from Washington to jump-start the nation’s staggering banks, automakers and other industries, a new economy is emerging of businesses that hope to make money from the various government programs that make up the largest economic rescue in history.
They include big investors who are buying up failed banks taken over by the federal government and lobbyists. And there is PennyMac, led by Mr. Kurland, 56, once the soft-spoken No. 2 to Angelo R. Mozilo, the perpetually tanned former chief executive of Countrywide and its public face.
Mr. Kurland has raised hundreds of millions of dollars from big players like BlackRock, the investment manager, to finance his start-up. Having sold off close to $200 million in stock before leaving Countrywide, he has also put up some of his own cash.
While some critics are distressed that Mr. Kurland and his team are back in business, the executives say that PennyMac’s operations serve as a model for how the government, working with banks, can help stabilize the housing market and lead the nation out of the recession.
- THEY DUG THE HOLE WE'RE IN - WITH FANNIE MAE'S HELP.
- THEN, THEY LEFT US HOLDING THE BAG.
- NOW - WITH THE HELP OF THE US TREASURY, THEY'RE GETTING TO BUY BACK THE BAG AT A BARGAIN PRICE.
1 comment:
People who get rich are all about finding more and better and alternative ways to get and/or stay rich, and they never stop thinking about it. If getting richer means taking a cut of a government-run program, so be it. If it means working around the edges of what's allowed by a law that was poorly crafted by legislators having no clue about how business gets done, no problem. These ex-Countrywide guys are all over it.
This is just story #1 in what will be a book someday, the title of which might be:
"How the SuperWealthy Made Themselves a Bundle Thanks to the Stimulus Program -- While the Country Went Over a Cliff"
OR, hopefully,
"How Raking in Money from the Stimulus Bonanza Worked --- To the Benefit of Joe Sixpack AND the SuperWealthy"
------------------------------
I imagine a conversation going on in a dimly lit restaurant out in East Armpit, Nevada --- something like this:
Big Cheese Contractor Guy: "Look, if you will do two things: (1) make sure I get that $65 million contract and then (2) don't look too closely at the workforce I put together and bring up from Mexico to do the work --- just those 2 things --- I will not forget you when the money starts flowing to my bottom line. Think 6-figures. "
Shiny Blue Suit County Executive: "You know, of course, that this conversation never took place, all right? That said, I have a bank account for my kids' college savings fund. If money were to show up in there, ostensibly via my wealthy second cousin, Edward Slimeball III, I don't think anyone would ever question that. Edward would probably sell some gold coins for the record, in exactly the amount of the deposit, and whatever money he found in a FedEx envelope addressed to him should be cash --- no checks."
Oh yeah ... that's getting teed up already. It's what happens when money goes through politicians. And those people get reelected, too, after they play Godfather in their corner of he world. So we build in a quasi-permanent cadre of politicians when we let them dole out OUR money in ways that serve their own interests.
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