The loan giant took advantage of the public for years ! ! !
Excerpt:
ON its way to becoming the nation’s largest mortgage lender, the Countrywide Financial Corporation encouraged its sales force to court customers over the telephone with a seductive pitch that seldom varied.http://www.nytimes.com/2007/08/26/business/yourmoney/26country.html?_r=2&hp&oref=slogin&oref=slogin“I want to be sure you are getting the best loan possible,” the sales representatives would say.
But providing “the best loan possible” to customers wasn’t always the bank’s main goal, say some former employees.
Instead, potential borrowers were often led to high-cost and sometimes unfavorable loans that resulted in richer commissions for Countrywide’s smooth-talking sales force, outsize fees to company affiliates providing services on the loans, and a roaring stock price that made Countrywide executives among the highest paid in America.
Countrywide’s entire operation, from its computer system to its incentive pay structure and financing arrangements, is intended to wring maximum profits out of the mortgage lending boom no matter what it costs borrowers, according to interviews with former employees and brokers who worked in different units of the company and internal documents they provided. One document, for instance, shows that until last September the computer system in the company’s subprime unit excluded borrowers’ cash reserves, which had the effect of steering them away from lower-cost loans to those that were more expensive to homeowners and more profitable to Countrywide.
In effect, this was tantamount to engaging in organized criminal activity. Why is that so hard to for some people here to grasp ?
If Mozilo's crew was engaged fraud on the font end dealing with customers and hiding obvious underwriting scams -- why would they not commit fraud on the back end in selling mortgage paper on Wall Street. ? ? ? ? ?
R.I.P. Countrywide
Soon to be Bank of America
Isn't that the point of a business, to "wring" maximum profits? Should it be illegal?
You were complaining because they took too much risk. Now you complain because they calculate in a way that reduces risk?
which had the effect of steering them away from lower-cost loans to those that were more expensive to homeowners and more profitable to Countrywide.... In effect, this was tantamount to engaging in organized criminal activity
Last time I bought a car, the salesman tried to up-sell me. Didn't realize this was tantamount to "organized crime."