The Golden West deal caused the collapse of Wachovia Corp. In its last quarterly report prior to its acquisition by Wells Fargo, Wachovia booked a huge third-quarter loss 2008 of $23.9 bn–$18.7 bn of which was a colossal golden goose egg writedown of goodwill, meaning Wachovia won the prize for the country’s biggest overpayment of a mortgage lender, Golden West.]
60 Minutes had a great segment this evening discussing Golden West, Wachovia, Wells Fargo, whistleblowers, etc. Google Herbert and Marion Sandler.
...interest-only payments on no-doc loans...
Amazing.
Weren’t the Sandlers part of the Saturday Night Live skit that NBC had to pull for threat of suit?
Herbert Sandler: My wife and I had a company which aggressively marketed subprime mortgages, and then bundled them into securities to sell to banks such as Wachovia. Today, our portfolio is worth almost nothing — though at one point, it was worth close to $19 billion.
Pelosi: My God. I am so sorry. Were you able to sell it for anything.
Herbert Sandler: Yes, for $24 billion.
Pelosi: I see. So in that sense, you’re not so to speak, actual victims.
Herbert Sandler (chuckling): Oh, no. That would be Wachovia Bank.
Marion Sandler: Actually, we’ve done quite well. We’re very happy.
Thanks for posting this. It’s a great/scary read and also identifies two great websites: footnote.org and Dumb Bubble Deals.
So why did Wells take Wachovia, even if for very little money? They must have thought the underlying businesses would be worth something someday.....if the ever manage to make it alive to someday.
Organizations funded by the Sandlers include:
American Civil Liberties Union (ACLU)
Moveon.org
ProPublica
America Votes
ACORN
Center for American Progress
Human Rights Watch
The Sandlers are credited with the invention of the “Pick-A-Pay” mortgage that allowed borrowers to pay less than the interest due on their loan each month — which increased the total amount owed by the borrower. Analysts place the blame on the near failure of Wachovia in the fall of 2008 on the “Pick-A-Pay” mortgage portfolio they acquired from the Sandler’s firm.
Sandler, Marion O
SAN FRANCISCO, CA
94111 $2,300 08/30/2008 P OBAMA FOR AMERICA - Democrat
Sandler, Marion O
SAN FRANCISCO, CA
94111 $-2,300 08/30/2008 P OBAMA FOR AMERICA - Democrat
Sandler, Marion O
SAN FRANCISCO, CA
94111 $2,300 08/30/2008 P OBAMA FOR AMERICA - Democrat
Sandler, Marion O
SAN FRANCISCO, CA
94111 $2,300 08/18/2008 G OBAMA FOR AMERICA - Democrat
Sandler, Marion
OAKLAND, CA
94612 World Savings & Loan Assoc./Executi $2,300 05/30/2007 P NANCY PELOSI FOR CONGRESS - Democrat
Sandler, Marion
OAKLAND, CA
94612 World Savings & Loan Assoc./Executi $2,300 05/30/2007 G NANCY PELOSI FOR CONGRESS - Democrat
You thought that was great? Don't you imagine that 60 Minutes would have wanted to talk to the Chairman of the House Financial Services Committee (i.e. Barney) about this egregious abuse? That's SOP at 60 Minutes, after all, to bring in some Lefty talking head. Or at least they would have spoken to Chris (Country-Wide) Dodd, the Senate Banking Committee Chairman. This was a white-wash, pure and simple. I've got twenty bucks that says no one is ever convicted for this. This was diversion from the real fraud that was Fannie Mae and Freddie Mac, and a prelude to the upcoming "victimized homeowner bailout".
The Sandlers are prominent lefties, I hear.
bump
Little details:
First, given the price of houses in California back then (peaking at something like $600k), this Thompson guy seems to think that Golden West managed to find only households with incomes of $200k or more.
Second, what he didn’t bother to mention was whether the loans were documented, or did they just take the word of the borrower...I think that I know that answer.
It really wasn’t hard. All Wachovia had to do was pull some of the real loan documents and investigate who the people were and whether they could pay it back. It’s called due diligence and people need to go to jail for what not doing it.
It is worth noting that one of Wachovia’s earlier acquisitions, First Union, put together the first Morgage Backed Securities (MBSs) backed by sub-prime Community Reinvestment Act mortgages, in concert with the now-defunct Bear Stearns.
October 20, 1997
First Union Capital Markets Corp., Bear, Stearns & Co. Price Securities Offering Backed By Affordable Mortgages
http://www.freerepublic.com/focus/f-news/2090118/posts
look inside Wells Fargo, you will find the worst of the mortgage lenders housed in this bank, Wachovia, which Wells Fargo bought last fall for $15.4 bn, and housed within Wachovia is Golden West Financial, which Wachovia bought for a stupefying $25 bn, Golden West, the purveyor of some of the worst junk mortgages in the country.
Bank of America Tender Offer
Scottrade, Bloomberg | 2/15/2009 | Myself
Posted on 02/15/2009 4:01:51 PM PST by demoskowitz
http://www.freerepublic.com/focus/f-news/2186400/posts
Yes, the 60 minutes segment was good, but I remember correctly, they could not reach the sandlers for comment. Sandler sent them some limp letter, but that was it. So, they just walk with their 2.4 billion dollars because wachovia was dumb enough to buy the bad debts?
Herb and Marion Sandler are the two Saturday night live included in a scathing skit a few months ago leading to NBC pulling the skit on some pretext and scrubbing the Sandler portion... They are Obamakins.
These banks have a very good idea EXACTLY what the assets are worth.
They are desperately trying to keep the world from finding that out. At least, until they have managed to unload their sacks of crap onto the US Treasury.
This was true in September of last year and it's true today.