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Tuesday, July 14, 2009

The "Criminal" Elite Ride On

I follow an on line news service from SourceMedia on a daily basis. Specifically I read National Mortgage News where today I read an article:

Did Wells Steer Minorities Into Baltimore Subprime Loans? by Brian Collins

This is a report on how the City of Baltimore, Maryland is suing Wells Fargo for lost taxes on homes that were financed by Wells and now foreclosed and vacant. While I believe in the concept of "innocent until proven guilty" - which applies to criminal cases - I also believe in the civil proceedure of having to "prove" your innocence of any wrong doing as charged.

So let me remind you all that this case is just beginning, no hearings have been held yet and no real evidence produced other then a former loan officer for Wells Fargo verbalizing their wrong doing and willing, evidently, to speak openly about it. It is interesting to note that she made over $700,000 in commissions one year and over $550,000 another as reported in the article but not substantiated in any way.

Why am I writing about this? Because Wells Fargo was one of the first to blame independant mortgage brokers of bringing them bad deals and therefore stopped doing business with them. Maybe you can begin to see why. First, if they laid the blame off on others then they become the "good guys". Second, by doing so they can now capture all the business by themselves for themselves controlling the files to perhaps "steer" more poeple into more bad loans keeping all the profit.

Independant mortgage brokers were the salvation for the people not the enemies as our illustrious financial institutions would have you believe. Sure there were a few bad apples but every tree has them.

We already know of other activities that Wells Fargo engaged in relative to mortgage securitizations. Did they really forge people's names to loan documents so that they could have more inventory to securitize? Some people who were victims said so. Did they really sell the same mortgage to more then one security? Some people who have had more then one company try to collect from them said so.

Did Wells Fargo "steer" people into sub prime, higher interest rate loans when they could have given them FHA or lower interest rate conventional loans? Probably but the evidence will eventually disclose the truth. But here is a quote from the article:

"I was verbally reprimanded…for placing too many borrowers in FHA loans, when the company wanted me to refer them to a subprime loan officer," his affidavit says. He was fired in 2007.

In response to the some of the allegations in the Baltimore lawsuit, Wells Fargo said it has policies, systems and controls in place to ensure race is not factor in the pricing or products it offers. "Our team members are instructed to give prime pricing options to all borrowers who qualify," it said.

The former loan officers said the Wells Fargo implemented filters in 2004 to prevent steering — but it was "easy" to circumvent. "The filter did not work and everyone knew it," Ms. Jacobson said.

What I do know is that the "banksters" as some now call them are still "gangstas".

But here is more from the same source by reporter Paul Muolo who is one of the few who has investigated and exposed the truth about the mortgage industry. In fact he has written two books that should be required reading.

In his What We're Hearing column of July 10th in National Mortgage News he talks about who has what company, issueing an IPO, buying up mortgage portfolios and most importantly where these corporate leaders came from.

Most, again, were high level executives of those same companies that created this mess to begin with - Countrywide and Impac - as examples. He says in the article,
"...Arch Bay Capital of Irvine being the winning bidder on the $600 million Wells Fargo non-performing subprime loan portfolio."
"...many players in the non-performing loan market say that Arch Bay - a vulture fund originally grubstaked by once high-flying alt-A giant Impac Mortgage - likes to stay under the radar and out of the newspapers. Oh well..."

Very interesting since Impac Mortgage was a prime player in the Alt A industry and a prime participant in the mortgage meltdown. Paul goes on to say that "Joe Tomkinson and William Ashmore are still running the place." In other words, Impac, still operated by the two who participated in creating our crisis, destroyed their company - which is still traded over the counter (OTC) as a penny stock in the pink sheets - are still out there openly not doing much but in disguise sending millions - where did they get the money and why if you fail can you just somehow start up a multi million dollar company to take advantage of the people you took advantage of previously?

OK, there is more in Paul's article.
"MORTGAGE PEOPLE: CRT Capital Group, Stamford, Conn., has named Ron KripalaniCredit Research and Trading LLC. Mr. Kripalani, a Wall Street veteran, was a mover and shaker at Countrywide Capital Markets where he served as CEO. That would be Angelo Mozilo's Countrywide." its new CEO. "
Pennymac is another company formed by the failed leaders of another major player in the mortgage meltdown. They are also looking to buy non performing mortgage notes and go public. Companies like this and the ones above are called "vulture" appropriate. They don't hide what they really are but we accept them as good business people helping our economy. Oh, boy!

The last part of Paul's column and other articles in other journals has to do with the talk and conversation of the government setting up a "new" agency called the Consumer Financial Protection Agency which is to protect - you guessed it - the consumer against banks and other lenders that may appear on the scene. While I do not want to get into a lengthy explanation of this I will reprint my comments to Paul's article.

I continue to enjoy your reports of all the "old" insiders - movers and shakers - still moving and shaking with new companies, IPO's and mortgage madness. They are the ones benefiting from the crisis "they" helped to create but this time they are being aided by the government's unclear policies and investments.

The Consumer Financial Protection Agency. Don't we have something called the Consumer Protection Agency now? Let me see if I get this right. A Consumer Protection Agency was/is there to protect CONSUMERS. Does not the Consumer Protection Agency which falls under the Federal Trade Commission protect consumers for credit issues now?

So if we get a Consumer Financial Protection Agency will it not be and do the same? Oh of course, it will try to determine how a bank or mortgage company can operate - I think. But cannot the current CPA create those same tyhpe of rules and regulations?

What is going on here? More agencies, more government, more duplication, but with power consolidation.

Uh oh, beware America.

Again Paul, great reporting to let the people know who is still thriving. Those of us just trying to survive or not surviving at all are just thrilled that these "elite" are still enjoying fine dining and jet flying while the rest of the nation - the "average" American - who they took advantage of, bankrupted and left out in the cold to dry - starve.

What a country! The prisons are full of people who smoked a little pot but these high flying criminals at the banks and other financial institutions are continuing to pillage and rape with the aid of government.

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