Most Corrupt Politicians for 2009

karenmills | 11 February, 2010 16:51

Judicial Watch Announces List of Washington's "Ten Most Wanted Corrupt Politicians" for 2009
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Judicial Watch, the public interest group that investigates and prosecutes government corruption, today released its 2009 list of Washington's "Ten Most Wanted Corrupt Politicians." The list, in alphabetical order, includes:

1.Senator Christopher Dodd (D-CT): This marks two years in a row for Senator Dodd, who made the 2008 "Ten Most Corrupt" list for his corrupt relationship with Fannie Mae and Freddie Mac and for accepting preferential treatment and loan terms from Countrywide Financial, a scandal which still dogs him. In 2009, the scandals kept coming for the Connecticut Democrat. In 2009, Judicial Watch filed a Senate ethics complaint against Dodd for undervaluing a property he owns in Ireland on his Senate Financial Disclosure forms. Judicial Watch's complaint forced Dodd to amend the forms. However, press reports suggest the property to this day remains undervalued. Judicial Watch also alleges in the complaint that Dodd obtained a sweetheart deal for the property in exchange for his assistance in obtaining a presidential pardon (during the Clinton administration) and other favors for a long-time friend and business associate. The false financial disclosure forms were part of the cover-up. Dodd remains the head the Senate Banking Committee.

2.Senator John Ensign (R-NV): A number of scandals popped up in 2009 involving public officials who conducted illicit affairs, and then attempted to cover them up with hush payments and favors, an obvious abuse of power. The year's worst offender might just be Nevada Republican Senator John Ensign. Ensign admitted in June to an extramarital affair with the wife of one of his staff members, who then allegedly obtained special favors from the Nevada Republican in exchange for his silence. According to The New York Times: "The Justice Department and the Senate Ethics Committee are expected to conduct preliminary inquiries into whether Senator John Ensign violated federal law or ethics rules as part of an effort to conceal an affair with the wife of an aide…" The former staffer, Douglas Hampton, began to lobby Mr. Ensign's office immediately upon leaving his congressional job, despite the fact that he was subject to a one-year lobbying ban. Ensign seems to have ignored the law and allowed Hampton lobbying access to his office as a payment for his silence about the affair. (These are potentially criminal offenses.) It looks as if Ensign misused his public office (and taxpayer resources) to cover up his sexual shenanigans.

3.Rep. Barney Frank (D-MA): Judicial Watch is investigating a $12 million TARP cash injection provided to the Boston-based OneUnited Bank at the urging of Massachusetts Rep. Barney Frank. As reported in the January 22, 2009, edition of the Wall Street Journal, the Treasury Department indicated it would only provide funds to healthy banks to jump-start lending. Not only was OneUnited Bank in massive financial turmoil, but it was also "under attack from its regulators for allegations of poor lending practices and executive-pay abuses, including owning a Porsche for its executives' use." Rep. Frank admitted he spoke to a "federal regulator," and Treasury granted the funds. (The bank continues to flounder despite Frank's intervention for federal dollars.) Moreover, Judicial Watch uncovered documents in 2009 that showed that members of Congress for years were aware that Fannie Mae and Freddie Mac were playing fast and loose with accounting issues, risk assessment issues and executive compensation issues, even as liberals led by Rep. Frank continued to block attempts to rein in the two Government Sponsored Enterprises (GSEs). For example, during a hearing on September 10, 2003, before the House Committee on Financial Services considering a Bush administration proposal to further regulate Fannie and Freddie, Rep. Frank stated: "I want to begin by saying that I am glad to consider the legislation, but I do not think we are facing any kind of a crisis. That is, in my view, the two Government Sponsored Enterprises we are talking about here, Fannie Mae and Freddie Mac, are not in a crisis. We have recently had an accounting problem with Freddie Mac that has led to people being dismissed, as appears to be appropriate. I do not think at this point there is a problem with a threat to the Treasury." Frank received $42,350 in campaign contributions from Fannie Mae and Freddie Mac between 1989 and 2008. Frank also engaged in a relationship with a Fannie Mae Executive while serving on the House Banking Committee, which has jurisdiction over Fannie Mae and Freddie Mac.

4.Secretary of Treasury Timothy Geithner: In 2009, Obama Treasury Secretary Timothy Geithner admitted that he failed to pay $34,000 in Social Security and Medicare taxes from 2001-2004 on his lucrative salary at the International Monetary Fund (IMF), an organization with 185 member countries that oversees the global financial system. (Did we mention Geithner now runs the IRS?) It wasn't until President Obama tapped Geithner to head the Treasury Department that he paid back most of the money, although the IRS kindly waived the hefty penalties. In March 2009, Geithner also came under fire for his handling of the AIG bonus scandal, where the company used $165 million of its bailout funds to pay out executive bonuses, resulting in a massive public backlash. Of course as head of the New York Federal Reserve, Geithner helped craft the AIG deal in September 2008. However, when the AIG scandal broke, Geithner claimed he knew nothing of the bonuses until March 10, 2009. The timing is important. According to CNN: "Although Treasury Secretary Timothy Geithner told congressional leaders on Tuesday that he learned of AIG's impending $160 million bonus payments to members of its troubled financial-products unit on March 10, sources tell TIME that the New York Federal Reserve informed Treasury staff that the payments were imminent on Feb. 28. That is ten days before Treasury staffers say they first learned 'full details' of the bonus plan, and three days before the [Obama] Administration launched a new $30 billion infusion of cash for AIG." Throw in another embarrassing disclosure in 2009 that Geithner employed "household help" ineligible to work in the United States, and it becomes clear why the Treasury Secretary has earned a spot on the "Ten Most Corrupt Politicians in Washington" list.

5.Attorney General Eric Holder: Tim Geithner can be sure he won't be hounded about his tax-dodging by his colleague Eric Holder, US Attorney General. Judicial Watch strongly opposed Holder because of his terrible ethics record, which includes: obstructing an FBI investigation of the theft of nuclear secrets from Los Alamos Nuclear Laboratory; rejecting multiple requests for an independent counsel to investigate alleged fundraising abuses by then-Vice President Al Gore in the Clinton White House; undermining the criminal investigation of President Clinton by Kenneth Starr in the midst of the Lewinsky investigation; and planning the violent raid to seize then-six-year-old Elian Gonzalez at gunpoint in order to return him to Castro's Cuba. Moreover, there is his soft record on terrorism. Holder bypassed Justice Department procedures to push through Bill Clinton's scandalous presidential pardons and commutations, including for 16 members of FALN, a violent Puerto Rican terrorist group that orchestrated approximately 120 bombings in the United States, killing at least six people and permanently maiming dozens of others, including law enforcement officers. His record in the current administration is no better. As he did during the Clinton administration, Holder continues to ignore serious incidents of corruption that could impact his political bosses at the White House. For example, Holder has refused to investigate charges that the Obama political machine traded VIP access to the White House in exchange for campaign contributions – a scheme eerily similar to one hatched by Holder's former boss, Bill Clinton in the 1990s. The Holder Justice Department also came under fire for dropping a voter intimidation case against the New Black Panther Party. On Election Day 2008, Black Panthers dressed in paramilitary garb threatened voters as they approached polling stations. Holder has also failed to initiate a comprehensive Justice investigation of the notorious organization ACORN (Association of Community Organizations for Reform Now), which is closely tied to President Obama. There were allegedly more than 400,000 fraudulent ACORN voter registrations in the 2008 campaign. And then there were the journalist videos catching ACORN Housing workers advising undercover reporters on how to evade tax, immigration, and child prostitution laws. Holder's controversial decisions on new rights for terrorists and his attacks on previous efforts to combat terrorism remind many of the fact that his former law firm has provided and continues to provide pro bono representation to terrorists at Guantanamo Bay. Holder's politicization of the Justice Department makes one long for the days of Alberto Gonzales.

6.Rep. Jesse Jackson, Jr. (D-IL)/ Senator Roland Burris (D-IL): One of the most serious scandals of 2009 involved a scheme by former Illinois Governor Rod Blagojevich to sell President Obama's then-vacant Senate seat to the highest bidder. Two men caught smack dab in the middle of the scandal: Senator Roland Burris, who ultimately got the job, and Rep. Jesse Jackson, Jr. According to the Chicago Sun-Times, emissaries for Jesse Jackson Jr., named "Senate Candidate A" in the Blagojevich indictment, reportedly offered $1.5 million to Blagojevich during a fundraiser if he named Jackson Jr. to Obama's seat. Three days later federal authorities arrested Blagojevich. Burris, for his part, apparently lied about his contacts with Blagojevich, who was arrested in December 2008 for trying to sell Obama's Senate seat. According to Reuters: "Roland Burris came under fresh scrutiny…after disclosing he tried to raise money for the disgraced former Illinois governor who named him to the U.S. Senate seat once held by President Barack Obama…In the latest of those admissions, Burris said he looked into mounting a fundraiser for Rod Blagojevich -- later charged with trying to sell Obama's Senate seat -- at the same time he was expressing interest to the then-governor's aides about his desire to be appointed." Burris changed his story five times regarding his contacts with Blagojevich prior to the Illinois governor appointing him to the U.S. Senate. Three of those changing explanations came under oath.

7.President Barack Obama: During his presidential campaign, President Obama promised to run an ethical and transparent administration. However, in his first year in office, the President has delivered corruption and secrecy, bringing Chicago-style political corruption to the White House. Consider just a few Obama administration "lowlights" from year one: Even before President Obama was sworn into office, he was interviewed by the FBI for a criminal investigation of former Illinois Governor Rod Blagojevich's scheme to sell the President's former Senate seat to the highest bidder. (Obama's Chief of Staff Rahm Emanuel and slumlord Valerie Jarrett, both from Chicago, are also tangled up in the Blagojevich scandal.) Moreover, the Obama administration made the startling claim that the Privacy Act does not apply to the White House. The Obama White House believes it can violate the privacy rights of American citizens without any legal consequences or accountability. President Obama boldly proclaimed that "transparency and the rule of law will be the touchstones of this presidency," but his administration is addicted to secrecy, stonewalling far too many of Judicial Watch's Freedom of Information Act requests and is refusing to make public White House visitor logs as federal law requires. The Obama administration turned the National Endowment of the Arts (as well as the agency that runs the AmeriCorps program) into propaganda machines, using tax dollars to persuade "artists" to promote the Obama agenda. According to documents uncovered by Judicial Watch, the idea emerged as a direct result of the Obama campaign and enjoyed White House approval and participation. President Obama has installed a record number of "czars" in positions of power. Too many of these individuals are leftist radicals who answer to no one but the president. And too many of the czars are not subject to Senate confirmation (which raises serious constitutional questions). Under the President's bailout schemes, the federal government continues to appropriate or control -- through fiat and threats -- large sectors of the private economy, prompting conservative columnist George Will to write: "The administration's central activity -- the political allocation of wealth and opportunity -- is not merely susceptible to corruption, it is corruption." Government-run healthcare and car companies, White House coercion, uninvestigated ACORN corruption, debasing his office to help Chicago cronies, attacks on conservative media and the private sector, unprecedented and dangerous new rights for terrorists, perks for campaign donors – this is Obama's "ethics" record -- and we haven't even gotten through the first year of his presidency.

8.Rep. Nancy Pelosi (D-CA): At the heart of the corruption problem in Washington is a sense of entitlement. Politicians believe laws and rules (even the U.S. Constitution) apply to the rest of us but not to them. Case in point: House Speaker Nancy Pelosi and her excessive and boorish demands for military travel. Judicial Watch obtained documents from the Pentagon in 2008 that suggest Pelosi has been treating the Air Force like her own personal airline. These documents, obtained through the Freedom of Information Act, include internal Pentagon email correspondence detailing attempts by Pentagon staff to accommodate Pelosi's numerous requests for military escorts and military aircraft as well as the speaker's 11th hour cancellations and changes. House Speaker Nancy Pelosi also came under fire in April 2009, when she claimed she was never briefed about the CIA's use of the waterboarding technique during terrorism investigations. The CIA produced a report documenting a briefing with Pelosi on September 4, 2002, that suggests otherwise. Judicial Watch also obtained documents, including a CIA Inspector General report, which further confirmed that Congress was fully briefed on the enhanced interrogation techniques. Aside from her own personal transgressions, Nancy Pelosi has ignored serious incidents of corruption within her own party, including many of the individuals on this list. (See Rangel, Murtha, Jesse Jackson, Jr., etc.)

9.Rep. John Murtha (D-PA) and the rest of the PMA Seven: Rep. John Murtha made headlines in 2009 for all the wrong reasons. The Pennsylvania congressman is under federal investigation for his corrupt relationship with the now-defunct defense lobbyist PMA Group. PMA, founded by a former Murtha associate, has been the congressman's largest campaign contributor. Since 2002, Murtha has raised $1.7 million from PMA and its clients. And what did PMA and its clients receive from Murtha in return for their generosity? Earmarks -- tens of millions of dollars in earmarks. In fact, even with all of the attention surrounding his alleged influence peddling, Murtha kept at it. Following an FBI raid of PMA's offices earlier in 2009, Murtha continued to seek congressional earmarks for PMA clients, while also hitting them up for campaign contributions. According to The Hill, in April, "Murtha reported receiving contributions from three former PMA clients for whom he requested earmarks in the pending appropriations bills." When it comes to the PMA scandal, Murtha is not alone. As many as six other Members of Congress are currently under scrutiny according to The Washington Post. They include: Peter J. Visclosky (D-IN.), James P. Moran Jr. (D-VA), Norm Dicks (D-WA.), Marcy Kaptur (D-OH), C.W. Bill Young (R-FL.) and Todd Tiahrt (R-KS.). Of course rather than investigate this serious scandal, according to Roll Call House Democrats circled the wagons, "cobbling together a defense to offer political cover to their rank and file." The Washington Post also reported in 2009 that Murtha's nephew received $4 million in Defense Department no-bid contracts: "Newly obtained documents…show Robert Murtha mentioning his influential family connection as leverage in his business dealings and holding unusual power with the military."

10.Rep. Charles Rangel (D-NY): Rangel, the man in charge of writing tax policy for the entire country, has yet to adequately explain how he could possibly "forget" to pay taxes on $75,000 in rental income he earned from his off-shore rental property. He also faces allegations that he improperly used his influence to maintain ownership of highly coveted rent-controlled apartments in Harlem, and misused his congressional office to fundraise for his private Rangel Center by preserving a tax loophole for an oil drilling company in exchange for funding. On top of all that, Rangel recently amended his financial disclosure reports, which doubled his reported wealth. (He somehow "forgot" about $1 million in assets.) And what did he do when the House Ethics Committee started looking into all of this? He apparently resorted to making "campaign contributions" to dig his way out of trouble. According to WCBS TV, a New York CBS affiliate: "The reigning member of Congress' top tax committee is apparently 'wrangling' other politicos to get him out of his own financial and tax troubles...Since ethics probes began last year the 79-year-old congressman has given campaign donations to 119 members of Congress, including three of the five Democrats on the House Ethics Committee who are charged with investigating him." Charlie Rangel should not be allowed to remain in Congress, let alone serve as Chairman of the powerful House Ways and Means Committee, and he knows it. That's why he felt the need to disburse campaign contributions to Ethics Committee members and other congressional colleagues.

Reverse Mortgages, The Loan of Last Resort.

karenmills | 07 December, 2009 08:34

Intelligent Investing Panel

Avoid Reverse Mortgages

Alexandra Zendrian, 12.07.09, 06:00 AM EST

Keep away from the mortgage of last resort.

Markets Working Well in Hardest Hit Cities

karenmills | 14 October, 2009 19:28

How Much Mortgage Can I afford?

karenmills | 03 August, 2009 19:47

One of the first things your loan officer will do is figure out two types of debt-to-income ratio. The first is your housing to income DTI and your Total DTI. DTI is essentially your monthly liabilities divided by your gross monthly income.

Some lenders have a DTI requirement of 29/41 for FHA and 30/45 for conventional. This means your housing payment can’t exceed 30 percent of monthly gross income and your total monthly debt that shows up on your credit report plus your mortgage payment can't exceed 45% of your total gross monthly income.

These ratios will give you an idea as to what you can afford. You’ll also need to get a pre-approval to see what type of mortgage rate you might qualify for with your credit score. Your rate will also impact your payments and debt ratios.

Don’t forget taxes, homeowners insurance, homeowners association and mortgage insurance will impact your payment and your debt ratios.

An Appraisers Viewpoint

karenmills | 26 June, 2009 17:04

Thank you truth in mortgage:

An appraisers viewpoint...

“Yesterday it was the Realtors, the day before it was the Mortgage Brokers, and today it’s the Builders.

The builders did NO demographics study and created the largest OVER SUPPLY in human history. Is it our fault the values are being destroyed?

Most of these builder homes are selling cheap because the BANK owns them and the buyers are paying CASH. Do you not expect a further discount when paying cash?…

Appraisers are being thrown under the bus…as usual when the bankers and builders get caught with their hands in the cookie jar.

I mean who’s next? Do you know about the HVCC? It cuts the appraisers fee in 1/2 and TAKES ALL our client relationships away.  Those took years to build.

Not every appraiser worked for a crook. The HVCC was implemented on 5/01/2009. Do any appraisers really care about the appraisal quality at $150 when we used to make $300.

My bills have gone up….the borrower is also now paying MORE after the HVCC went into effect. How is that just? I have had it with all the crooks from DC down to the Main Street Bankers. They ALL wanted high values and now……you can’t come in low enough for the banks (appraisals coming in too low).

Every solid, honest, professional appraiser I know….HATES what this job has come down to. We work hard, play by the rules, turn in crooks……and are left to clean up the mess…at ½ price.”

So this is a taste of how some appraisers feel about the situation at the moment…not good.

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Congresswoman Laura Richards Not Fit to Lead

karenmills | 15 June, 2009 20:44

He's not alone. Neighbors have complained to the city, written letters and e-mails to Richardson and House Speaker Nancy Pelosi , but the three-bedroom house remains an eyesore. Neighbors just wish she would sell it or let it go into foreclosure, anything to get it into the hands of someone who would care.

"She shows total disregard for everyone in the neighborhood," said Sean Padovan, a retired police sergeant. "She ought to be embarrassed and ashamed."

Richardson did not return phone calls for this story.

The problems with the house began shortly after Richardson was elected to the Assembly in 2006 from Long Beach and bought the two-story house in the leafy Curtis Park neighborhood.

It wasn't long before Padovan, 62, angry that the lawn wasn't being mowed, knocked on Richardson's door, told her he was a neighbor and asked if she minded if he cut the grass. He hauled out his hand mower, and when Richardson still seemed to have no interest in taking care of her yard, he stuck a gardener's card in her door with a note saying that she should call him if she had questions.

He never heard from Richardson, not a thank-you or a wave as she walked past.

After Richardson was elected to Congress in 2007 in a special election, she moved out around Labor Day. She told Bailey that she planned to rent out the house. Later that year, he sent her an e-mail with a link to a real estate agent who could help. He never received a response.

With no one living in it, the house continued to deteriorate.

Angry at the demise of the once stately home and worried about what it would do to their property values, neighbors took things into their own hands.

Carrie Thomsen would walk across the street with her hose and water the yard. Janet Carlson sent her gardener to Richardson's house once a month for six months to mow the lawn. She paid kids $20 during the fall to rake the leaves. They once peeked inside and saw a dead bird in the living room. Her husband turned on the sprinklers the last two summers, worried that dry weeds would turn into a fire hazard.

Things got so bad that in the fall of 2008 rats began breeding in Richardson's backyard and soon moved into L. Kraft's house next door. It took him two months to get rid of them.

Richardson's house, he said, "has become such a hideous place."

The congresswoman has gained a degree of infamy in the Sacramento neighborhood. The two-story house, gray with red trim, is badly in need of paint. The front lawn is a patchwork of grass and weeds with brown splotches of dirt. Much of the once lush ivy covering the chain-link fence has died.

The red wooden gate sprawls on the lawn, unless someone props it up. A toilet sits on the back patio.

The backyard weeds, which neighbors said had grown three or four feet high, were cut a day after The Times wrote about them a few months ago. Dead leaves have gathered behind the hot tub. Rosebushes are struggling from lack of water, since the sprinklers are never turned on. Gone are the rose of Sharon, miniature crape myrtle and primroses the previous owner had labored over for years. - LA Times.

Fed Slowing MBS Purchase Pace

karenmills | 24 May, 2009 18:24

Research from Credit Suisse states that if the Fed would like to keep rates lower for longer, it will need to slow the pace of its current purchases in order to maintain their capacity to continue to purchase mortgage backed securities.

CS analysts stated the Fed's involvement in the mortgage backed securities market will probably be necessary into 2010. The Fed has purchased close to $450 billion in mortgage bonds issued by Freddie Mac, Fannie Mae, and Ginnie Mae.

The Fed has committed to buying up to $1.25 trillion in mortgage backed securities until July leaving the door open for continued buying as part of the Homeowner Affordability and Stability Plan announced back in February.

As the economy improves  as it has been recently showing signs of the Fed may have more difficulty keeping interest rates in the range they prefer. Moody’s chief economist John Lonski noted today that mortgage rates gone low enough to stabilize home sales possibly leading to a slow summer sales season.

Underwriter Mutiny

karenmills | 05 May, 2009 20:20

Overworked and underpaid mortgage underwriters are burning out by the scores. Are you experiencing slow turn times, poor decision quality or inconsistent findings? You're suffering from a quiet revolt by underwriters. Lacking a formal and coordinated effort, mortgage underwriters seem to all be rejecting the status quo of overworked and underpaid. The consensus is that bank management stinks and bank employment is for the birds.

Begining in February, the nations mortgage underwriting volume exploded and continues to be overwhelming. Undewriters can be heard complaining about working 12 hour days 6 to 7 days a week. Pay is low and the banking environment is toxic right now due to pressure from multiple sources.

A formula for high burn-out.

Working for banks, especially mortgage banks is considered a horrible experience: Staggering production increases, severe shortages in staff due to cuts in 2008, severly increased compliance requirements, reduced support from management, etc, etc, etc... no wonder underwriters are burning out.

 

David Stevens of Freddie Mac, Wells Fargo, World Savings Going to FHA

karenmills | 28 March, 2009 12:20

President Obama has named David Stevens, a former World Savings, Wells Fargo and Freddie Mac executive as Assistant Secretary for Housing and Federal Housing Administration (FHA) Commissioner.

Prior to this nomination David Stevens was appointed to the post of president and COO. Prior to joining The Long & Foster Companies, Stevens was executive vice president, national wholesale manager responsible for all sales, operations, and finance for Wells Fargo Home Mortgage's wholesale channel

The White House Monday named David Stevens as assistant secretary at the Department of Housing and Urban Development. The position needs Senate confirmation to put Stevens in charge of the governments housing mortgage insurance program.

Bank of America's Countrywide Refusing to Fund March's FHA Transactions

karenmills | 09 March, 2009 19:23

Countrywide advertised March 31st as the final day that FHA loans submitted to them could be funded with a score of less than 620. For those mortgage brokers, Realtors, home buyers and borrowers that are funding loans through the Countrywide side of Bank of America this month- get ready for some serious bad news.

 

 

Regardless of whether your transaction is a refinance or a purchase and the moving truck is on its way, you're probably out of luck. The executives at Bank America and Countrywide have decided to sink a great many loan files submitted to them for closing this month.  

The directive came down in this form: This is straight from a Countrywide Underwriters mouth and confirmed by a wholesale rep- If a qualification component of the loan submitted to Countrywide didn't match the underwriters findings and the loan had a mid fico score of less than 620, the loan was to be declined. These were the same loans that Countrywides secondary managers and wholesale reps stated would be clear to fund until March 31st while selling their services in February.

Here's a real life scenario direct from an underwriter:

A mortgage broker submitted a borrowers purchase transaction on February 17 in order to fund on March 27th. The file had a 612 mid score on the borrower, a 680 mid on the co-borrower. The property is a single family residence. This particular subdivision has a $195 annual association fee- $16.25 a month. Because the $16.25 a month was not included on the loan application in the proposed housing payment, the underwriter was required to decline the loan. The borrowers debt ratios WITH the $16.25 additional debt were 28 / 42, well within guidelines. Underwriters are basically being told to find any excuse to decline loans with mid scores less than 620 for fear that the loans can't be sold into the secondary markets. 

This was a colossal misrepresentation of what and what could not be offered to consumers. I have to imagine that there are tens of thousands of home purchasers across the country that will be left holding an empty bag. A truly Horrible situation if you are a home buyer that has sold their current home or a renter that has given notice, and are required to find a new home by the end of the month.

You think I'm making this up or leaving something out, sadly I'm not. When I heard this story I was floored. I couldn't imagine that any bank could have so horribly mismanaged their pipeline as Countrywide has this month. 

The truth is that Countrywide has again messed things up bad and is now looking for ways to back out of its commitments. 

 

 

 

Worst Mortgage Executive(s): Frank M. Sillman

karenmills | 02 March, 2009 16:29

A nationwide leader in the marketing of toxic mortgage loan programs. IndyMac was oblivious to their impact on the economy and housing market. Frank M Sillman captained this mortgage lender and bank with a voracious appetite for everything low or no documentation. In many ways, IndyMac was in a heated race with Countrywide to the bottom. 

They consciously avoided more practical programs such as conventional full documentation loans. It was IndyMac's practice to price themselves out of conventional full documentation loans in an effort to stear production away from GSE loans and into private lable non-prime programs.

Showing weak business acumen, they started to offer FHA forward loans only just prior to their failure. While much of the market was quickly constricting they avoided changes to reasonable lending practices, putting investors and bank depositors knowingly at risk.

Early to failure, way too late to embrace market reality: The irony is that for a brief spell after they were given FDIC support, they attempted one last time to capture market share with a final toxic program; the five year fixed stated loan. I guess old habits really do die hard.

They were also viewed negatively by many in the industry because of how they undermined their broker customers with their brokers borrowing clients. IndyMac created a division called www.loanworks.com which focused on taking Realtor business away from their mortgage brokers- a costly attempt that continues to drain funds and undermine loan quality. They were vicious and they routinely undermined their broker and correspondent relationships.

They undermined the American workforce by implementing impractical systems such as having loan conditions signed off in offshore centers such as those in India. IndyMac was a retail bank, retail mortgage operation and one of the largest wholesale and correspondent lenders in the nation. IndyMac endeavored into all facets of toxic lending including sub-prime loans.

BIO: Frank M. Sillman Chief Executive Officer at IndyMac Mortgage Bank-

Mr. Sillman joined IndyMac in 1997 as Senior Vice President and promoted to Mortgage CEO and Executive Vice President of the Mortgage Professionals Division in 2004. During his tenure at IndyMac Frank Sillman held leadership positions with the Mortgage Bank including managing the Product Development, Sales and Marketing departments.

In prior years he founded TCM Mortgage and American Home Credit.

Currently: LinkedIn site Quote from Mr. Sillmans page

Managing Partner Fortace LLC

September 2008 — Present (7 months)

Richard Wohl and myself have set up a nationwide Fraud Recovery business that's working with government agencies, investors and lenders to help them recover monies lost to mortgage fraud.

Isn't this new position like the fox protecting the hen house?

The Home Affordability and Stability Plan

karenmills | 18 February, 2009 20:48

We'll all find out more when the complete details are released on March 4 but here is what I found out so far about this pretty great sounding program...

President Obama and the Treasury Department presented a much awaited and touted foreclosure prevention plan that will rely on GSEs: Fannie Mae and Freddie Mac to help pre-default borrowers. The Homeowner Affordability and Stability Plan will address foreclosures from several angles depending upon the borrower’s situation.

Borrowers needing help and that have Fannie and Freddie guaranteed loans but aren't able to refi because their loan exceeds 80 percent of the homes value- loan guidelines will be relaxed to streamline refinancing.

This effort is expected to help up to 5 million homeowners secure more affordable and sustainable mortgage interest rates and payments. To make sure Fannie and Freddie are up to the task the Treasury will give up to $200 billion in capital to the pair through stock purchases.

The Treasury will also still continue to purchase Fannie Mae and Freddie Mac mortgage backed securities as they have been doing since January of 2009 to help keep interest rates low and pump up liquidity to the secondary mortgage market. The GSEs mortgage portfolios will be increased by $50 billion to over $900 billion.

Borrowers could get loan terms that lower the housing debt ratio to 31 percent with voluntary lender reductions and government subsidies. In some cases the program would provide below market interest rates for five years then adjust upward at a slow pace until reaching the average rate for the same conforming loan at the time of the initial loan modification.

Once a modification is complete borrowers would receive a $5000 credit. In addition, Loan servicers will receive an upfront fee of $1,000 for each completed loan modification as well as incentives of up to $1,000 each year for three years if the borrower stays on time with their new terms.

It doesn't stop there... an incentive of $500 will be given to servicers and another of $1,500 paid to mortgage holders if they modify predefault loans before the borrower becomes delinquent.

Lender would be backed by an insurance program worth $10 billion.

Some Borrowers Assuming The Lotus Position

karenmills | 11 February, 2009 14:58

 

 

I called my therapist yesterday... not for what you think. We're both in the same chamber of commerce and she mentioned that she was thinking of refinancing soon. She heard that mortgage rates were going down to 4.5%. When I called her she said that she wanted to wait. First thing I thought was that she was cheating on me with another loan officer. Now you know why I need a therapist. Hummm, I might have some anxiety issues huh?

Anyway, as a loan officer you wonder how people can assume the market is going to do anything. There are however a lot of loan officers reading their "crystal balls" and make these absurd prognostications. I mean yes 4.5% could happen but for nothing is set in stone. If you are at 7% and you are paying those dollars every month and you can get to 5% and pay less dollars why would you continue paying "those dollars" to wait for a 4.5% that may never come. 

The first thing you should consider if you are like my therapist is the difference in payment between 7.0% and 5.0% and then the difference between 5.0% and 4.5%. This'll let you know if you need to wait or buy those shoes you've been thinking about NOW.

Are you losing money by waiting?

Confessions of a Mortgage Crook

karenmills | 04 February, 2009 10:54

You might find this confession disturbing, I did. Most of the mortgage people I know are fair, this young gentleman was not. The managers at Ameriquest were notorious for this type of "management" style and tactics. I can go on and on (and will in later blogs) about companies that were unregulated and managed by HYPER-crooks. 

I and the others on this website have joined together to stop this type of behavior in our industry. We are asking for your support- please email your representatives in Congress and State regulators for tougher guidelines for entrance into the Loan Origination field. We in this industry handle very personal information and feel requirements to become a loan officer MUST be considerably more stringent.

Here's an excerpt from the confession:

"As a 19 then 20 year old boy, my managers and handlers taught me the ins and outs of mortgage fraud, drugs, sex, and money, money, and more money. My friend and manager handed out crystal methamphetamine to loan officers in a bid to keep them up and at work longer hours. At any given moment inside the restrooms - cocaine and meth
was being snorted by my estimates more than a third of the staff, and more than half the staff
manipulating documents to get loans to fund and more then 75% just completely made false
statements on 1003s..."

Click here for the full confession

List of the Most Toxic Mortgage Lenders

karenmills | 23 January, 2009 08:39

Here is a compiled list of the most toxic lenders from my data sources. The data is from 2006.

2007 is when the implosions started so most of the information for 2007 is unclear at this point.

These lenders account for 60-65% of the loans we are currently having problems with. 

MtgCo/Lender	06 Ranking	06 Volume (billions of $)	Where are they now?
Countrywide	1	46	BOFA NOW
New Century	2	37	GONE
Fremont	3	30	GONE
National City	4	30	PNC NOW
WMC	5	27	GONE
Option One	6	24	GONE
Argent	7	22	GONE
Long Beach Mtg	8	18	GONE
Wells SubPrime	9	16	CLOSED
American Home	10	15	GONE
Accredited	11	13	GONE
Indymac Bank	12	12	FDIC
BNC	13	12	GONE
Decision One	14	11	GONE
Equifirst	15	10	BAD SHAPE
World Savings	15a	10	WACHOVIA
Chase Manhattan	16	8	TRIMMING
Greenpoint	17	7	GONE
Wilmington	18	7	TRIMMING
Novastar	19	7	GONE
Resmae	20	7	GONE
Homecomings	21	7	GONE
Beneficial	22	6	TRIMMING
First Magnus	23	6	GONE
Washington Mutual	24	6	FDIC/CHASE
Encore Credit	25	5	GONE
Lehman Brothers	26	5	GONE
First NLC	27	5	GONE
People’s Choice	28	5	GONE
HFC	29	4	TRIMMING
Bear Sterns	30	4	GONE