"There is danger from all men. The only maxim of a free government ought to be to trust no man living with
power to endanger the public liberty." - - - - John Adams

Sunday, July 10, 2011

The looting of America


In buying the corrupt lender Countrywide, Bank of America has been pouring billions and billions into a Black Hole.  B of A just last week pumped in another $20.4 billion, but the red ink keeps flowing.

If anyone needed any proof that the Wall Street Elites, backed by their bi-partisan Beltway allies in Washington, are looting this nation they need only look at Countrywide.  Crooked home loans, fraud, the implosion and free fall of the entire banking system, a nationwide home foreclosure nightmare costing taxpayers trillions, bribary of public officials . . . and no one goes to jail.

Welcome to the United Kleptocracy of America.

When Bank of America Corp. acquired mortgage giant Countrywide Financial Corp. three years ago, cementing BofA's position as a consumer banking leader, the purchase price was a measly $2.5 billion in stock reported the Los Angeles Times.

But the real cost could easily be 10 to 15 times that amount after the home lender incurred huge losses under BofA's ownership and the bank agreed to pay billions of dollars to settle litigation over bad loans made by Countrywide during the housing boom. On Wednesday alone, the bank added $20.4 billion in expected costs to the tally.

The mounting numbers have made the acquisition of Countrywide one of the most misguided takeovers in the history of banking, analysts say.  The worst by a mile," FBR Capital Markets analyst Paul Miller said — or at least the worst since he began following the industry in 1992.

Talk show host Dr. Michael Savage demands
to know why no one is in jail after billions
are stolen in banking and loan fraud.
When the Charlotte, N.C., bank agreed in January 2008 to buy Countrywide, the nationwide mortgage meltdown was well underway in the wake of surging defaults on subprime and other high-risk loans written by the Calabasas company and other lenders.

Shortly after the takeover was completed the following July 1, Kenneth Lewis, BofA's chief executive at the time, acknowledged that Countrywide's losses were running at the high end of what his staff had projected.

But because accountants had aggressively written down the value of Countrywide's assets before transferring them to BofA's books, Lewis predicted the combined home-loan business, consisting mostly of Countrywide's operations, would immediately show a profit — and could see huge earnings growth once the mortgage industry recovered.

Instead, the unit has bled about $16 billion in red ink since the Countrywide takeover — with no real industry recovery in sight.

The $20.4 billion in bad news disclosed Wednesday includes $8.5 billion in payouts to 22 institutional investors to settle demands that Bank of America repurchase bonds backed by Countrywide mortgages. An additional $5.5 billion is to beef up reserves for similar demands by other investors.

The bank also said it would record $6.4 billion in additional mortgage-related charges for the second quarter. That amount includes a $2.6-billion write-off of its Countrywide investment and expenses for revising its mortgage-servicing operations to comply with orders from the Federal Reserve and the Office of the Comptroller of the Currency, which regulates national banks.

BofA said the newly announced costs meant it would report a net loss of $8.6 billion to $9.1 billion for the second quarter, instead of a profit of $3.2 billion to $3.7 billion. Wall Street seemed to breathe a sigh of relief that things weren't even worse.

Corruptus in Extremis

Two U.S. senators, two former Cabinet members, and a former ambassador to the United Nations received loans from Countrywide Financial through a little-known program that waived points, lender fees, and company borrowing rules for prominent people.

Corrupt Democrat Chis Dodd got most of the press but
the coverup was bi-partisan.

Senators Christopher Dodd, Democrat from Connecticut and chairman of the Banking Committee, and Kent Conrad, Democrat from North Dakota, chairman of the Budget Committee and a member of the Finance Committee, refinanced properties through Countrywide's "V.I.P." program in 2003 and 2004, according to company documents and emails and a former employee familiar with the loans.

In June 2008 Conde Nast Portfolio reported that several influential lawmakers and politicians, including Senate Banking Committee Chairman Christopher Dodd, Senate Budget Committee Chairman Kent Conrad, and Fannie Mae former CEO Jim Johnson, received favorable mortgage financing from Countrywide by virtue of being "Friends of Angelo."

Senator Dodd received a $75,000 reduction in mortgage payments from Countrywide at allegedly below-market rates on his Washington, D.C. and Connecticut homes. Michael Moore's Capitalism: A Love Story shows on film that this was actually over a million dollars of a sweet-heart mortgage deal.  Dodd nonetheless called for stronger regulation of mortgage lenders and proposed that predatory lenders should face criminal charges.

Clinton Jones III, senior counsel of the House Financial Services Subcommittee on Housing and Community Opportunity, and "an adviser to ranking Republican members of Congress responsible for legislation of interest to the financial services industry and of importance to Countrywide." was given special treatment.

Jones is now state director for federal residential-mortgage bundler Freddie Mac. Alphonso Jackson, acting secretary of HUD at the time and long time friend and Texas neighbor of President Bush, received a discounted mortgage for himself and sought one for his daughter. "In 2003, using V.I.P. loans for nearly $1 million apiece, Franklin Raines, Fannie Mae’s chairman and C.E.O. from 1999 to 2004, twice refinanced his seven-bedroom home, which has a pool and movie theater."

Speaker of the House Nancy Pelosi's son, Paul Pelosi, Jr., also received a loan with Countrywide. Barbara Boxer, Adam H. Putnam, Richard C. Holbrooke, James E. Clyburn, and Donna Shalala are also among those with mortgages from Countrywide.

CBS News had obtained the following list of then-Fannie Mae employees whose names had been turned over to investigators as having received VIP loans from Countrywide:
  • Sandra Adams: Fannie Mae Account Associate
  • Nitirwork Armstrong: Fannie Mae Director
  • Gregg Ayres: Fannie Mae Customer Acct Manager
  • Jeffrey Baker: Fannie Mae Business Analyst
  • Ingrid Beckles: Freddie Mac VP Default Mgmt
  • Cherry Billings: Fannie Mae Asst to CEO
  • Christine Buckley: Fannie Mae Sr Assistant
  • Sharon Canavan: Fannie Mae Govt Relations/Lobbyist
  • Delynn Conley: Fannie Mae Underwriter
  • Carla Corpuz: Fannie Mae Senior Underwriter
  • Tanguy De Carbonnieres: Fannie Mae Legal Counsel
  • Bernard Deane: Fannie Mae Director
  • Mollie Dougherty: Fannie Mae Sr Business Manager
  • Roy Downey: Fannie Mae Director
  • Cynthia Fatica: Fannie Mae Legal Counsel
  • Jamie Gorelick: Fannie Mae Vice Chair
  • Lizbeth Grant: Fannie Mae Director Tec/Secondary Mkt
  • Greta Hamilton: Fannie Mae Manager/Home Loans
  • Lester Handy: Fannie Mae Consultant
  • James Johnson: Fannie Mae Chairman and CEO
  • Jack King: Fannie Mae Manager
  • Karen King: Fannie Mae Credit Risk manager
  • Gerald Langbauer: Freddie Mac VP Sales
  • Derek Lowe: Fannie Mae Technician/Home Loans
  • Mary Lee Moriarity: Fannie Mae Sr Underwriter Consult/Lending
  • Daniel Mudd: Fannie Mae Vice Chair and COO
  • Paulette Porter: Fannie Mae Sr Proj Mgr/Mtg Securities
  • Alan Quirion: Freddie Mac Director
  • John Radwanski: Freddie Mac Sr Port Director
  • Franklin Raines: Fannie Mae Chairman and CEO
  • Robin Ramsay: Fannie Mae Customer Acct Manager
  • Rebecca Rosena: Fannie Mae Credit Risk manager
  • Irwin Rosenstein: Fannie Mae Ass. General Counsel
  • Robert Sanborn: Fannie Mae Vice President
  • William Shirreffs: Fannie Mae Director
  • Joseph Silva: Fannie Mae Servicing Portfolio Manager
  • Donna Simpson: Fannie Mae Customer Acct Manager
  • Michelle Sorensen: Fannie Mae Sr Business An/Mortgage
  • Mary Ann Staley: Fannie Mae Marketing Dir
  • Deborah Kay: Tretler Fannie Mae VP Risk Management
  • Kirk Willison: Freddie Mac VP Trade Relations/Dir Industry Relations
  • David Yoon: Fannie Mae Acct Associate

Poor people are shot for looting.  Businessmen and
their political allies who loot pay a fine and retire
to their beach house in the Hamptons.

A full bi-partisan cover up

On October 15, 2010, Mozilo reached a settlement with Securities and Exchange Commission, over securities fraud and insider trading charges. Mozilo agreed to pay $67.5 million in fines.

TRANSLATION:   Just write a check and walk.

This fine represents a small fraction of Mozilo's estimated net worth of $600 million. Countrywide will pay $20 million of the $67.5 million penalty because of an indemnification agreement that was part of Mozillo's employment contract. The terms of the settlement allow Mr. Mozilo to avoid acknowledging any wrongdoing.

Republicans controlled Congress and the White House while all the crooked insanity was going on.  No meaningful investigations were held.  Then Democrats controlled Congress and the White House. No meaningful investigations were held.  Now the Republicans are back in control the House.  Again, Countrywide is swept under the rug. 

In February 2011, the U.S. dropped its criminal investigation into the facts behind the Countrywide civil settlement.

And the looting of America goes on and on and on.

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