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(Reuters)   Looking to re-build its scandal-plagued mortgage banking business, Citi decides to hire the former chief executive of Freddie Mac, the only mortgage lender with an even worse reputation than their own   (reuters.com) divider line 41
    More: Strange, Citibank, Freddie Mac, executive directors, Bankers Association, GMAC Mortgage, lenders, U.S. Securities and Exchange Commission, Freddie Mac executives  
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254 clicks; posted to Business » on 02 May 2012 at 8:47 AM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-05-02 08:50:12 AM
Why are these people not in jail?
 
2012-05-02 08:55:46 AM
Good God, will they never learn? They hired Robert Rubin as soon as Clinton was out of office and he convinced Chuck Prince to throw away his company on bad mortgage loans and derivatives, ruined the company, and now this????
 
2012-05-02 09:05:32 AM
Most people looking to take out a mortgage don't care about the reputation of the head of the mortgage division.
 
2012-05-02 09:40:19 AM
Freddie Mac, the only mortgage lender with an even worse reputation than their own

www.taxfairnessoregon.org

Millions of angry, unsatisfied customers would like to have a word with you.
 
ZAZ [TotalFark]
2012-05-02 09:46:25 AM
Where does Bank of America fall on the mortgage lender reputation list?
 
2012-05-02 09:57:25 AM
Yeah everyone hates Freddie Mac, without whom almost no one outside the top 1% would ever be able to buy property. How irresponsible of them.
 
2012-05-02 10:21:18 AM
I watched the second part of a Frontline show about the financial crisis and can't help but wish slow, painful deaths on these douchbags. The fact they walked away without so much as a slap on the hand pisses me off to no end.
 
2012-05-02 10:22:44 AM
I just refinanced my Freddie Mac-owned mortgage that was serviced by Citibank, with Citibank, using the HARP program.

Despite that, this story is completely irrelevant to my interests. I'm just going to relax and enjoy that $400/month savings
 
2012-05-02 10:35:01 AM
" In June 2006, Bowen discovered that as much as 60% of the loans that Citi was buying were defective."

"Bowen told the Commission that after he alerted management by sending emails, he went from supervising 220 people to supervising only 2, his bonus was reduced, and he was downgraded in his performance review."

"During 2006 and 2007, I witnessed many changes to the way the credit risk was being evaluated for these pools during the purchase processes," Bowen said. For example, he said, the chief risk officer in Citigroup's Consumer Lending business reversed large numbers of underwriting decisions from "turn down" to "approved."

"Another part of Bowen's charge was to supervise the purchase of roughly $50 billion annually in prime loan pools, a high percentage of which were sold to Fannie Mae and Freddie Mac for securitization."

"At the time that I became involved, which was early to mid-2006, we identified that 40 to 60 percent of the files either had a 'disagree' decision, or they were missing critical documents."

-FCIC Final Report
 
2012-05-02 11:35:04 AM
Lost Thought 00

Yeah everyone hates Freddie Mac, without whom almost no one outside the top 1% would ever be able to buy property. How irresponsible of them.

Bullshiat.
 
2012-05-02 11:44:43 AM
Freddie Mac, the only mortgage lender with an even worse reputation than their own

That's not true. Do you know how I know?

Freddie Mac is not a mortgage lender.
 
2012-05-02 11:50:41 AM

Lost Thought 00: Yeah everyone hates Freddie Mac, without whom almost no one outside the top 1% would ever be able to buy property. How irresponsible of them.


this.
 
2012-05-02 11:52:13 AM
jdemanon

this.

Nope. Still bullshiat.
 
2012-05-02 11:57:56 AM

impaler: Freddie Mac, the only mortgage lender with an even worse reputation than their own

That's not true. Do you know how I know?

Freddie Mac is not a mortgage lender.


Depends on how you define your terms I suppose. But "major player in the mortgage market" , probably wouln't hve fit in the headline as neatly
 
2012-05-02 12:08:49 PM
I need to learn how to fail upward like this at work.
 
2012-05-02 12:20:31 PM

Magorn: Depends on how you define your terms I suppose. But "major player in the mortgage market" , probably wouln't hve fit in the headline as neatly


True. We should look at the failure rate of FAM/FRE backed mortgages vs others.

growlersoftware.com
 
2012-05-02 12:56:05 PM
To be fair, Subby said worse REPUTATION than Citi. Freddie has been the recipient of four years of right wingers screaming at anyone who would listen that Barney Frank, Fannie and Freddie, and the CRA were responsible for the depression. The fact that anyone could make an argument so stupid with a straight face blows me away. Anyone who says the right wing wurlitzer isn't effective can suck on that.

Not sure if that was what subby meant, but that's how I took it.
 
2012-05-02 01:19:07 PM
Bill Black, a former senior deputy chief counsel, Office of Thrift Supervision, helped expose the savings-and-loan scandal. He is author of The Best Way to Rob a Bank Is to Own One and teaches economics and law at the University of Missouri, Kansas City.

Bill Black: Citi is a classic example of serially abusive senior management. The recent troubles are not really unique or even terribly different. Over the past 25 years Citi has gone from crisis to crisis and bailout to bailout and abusive or even outright criminal action. If there were 3 strike laws for white collar crime, Citi would have been put out of its misery 25 years ago.
 
2012-05-02 06:43:15 PM

Sergeant Grumbles: Why are these people not in jail?


I'm going with regulatory capture
 
2012-05-02 09:02:27 PM

Sergeant Grumbles: Why are these people not in jail?


Because corporations are people, my friend.
 
2012-05-03 04:46:51 AM

Whatthefark: I watched the second part of a Frontline show about the financial crisis and can't help but wish slow, painful deaths on these douchbags. The fact they walked away without so much as a slap on the hand pisses me off to no end.


Since the banks were pressured by the government to provide no-or-low down payment loans, and ARM loans, to people with mediocre credit, don't expect any trials.
 
2012-05-03 04:49:51 AM

impaler: Magorn: Depends on how you define your terms I suppose. But "major player in the mortgage market" , probably wouln't hve fit in the headline as neatly

True. We should look at the failure rate of FAM/FRE backed mortgages vs others.

[growlersoftware.com image 473x279]


You really need to look into why the banks were giving out questionable loans.
 
2012-05-03 04:53:22 AM
Corporation (n)

I legal entity that allows sociopaths to harm society using other people money and no face consequences for their actions.
 
2012-05-03 04:54:36 AM

Corporate Self: Corporation (n)

A legal entity that allows sociopaths to harm society using other people money and no face consequences for their actions.


Damn it Fark! Join the 21st century and let us edit our posts for a few minutes after posting.
 
2012-05-03 04:59:37 AM

Trolljegeren: Sergeant Grumbles: Why are these people not in jail?

I'm going with regulatory capture


From your link: "In economics, regulatory capture occurs when a state regulatory agency, created to act in the public interest, instead advances the commercial or special interests that dominate the industry or sector it is charged with regulating."

Ummmm... the regulators weren't advancing the interests of the banks, they were advancing the interests of those who couldn't afford to buy houses unless the banks were coerced into lending. Over 450 FDIC-insured banks have failed since the start of the real estate decline, and more would have failed if not for the bail outs... I don't see how that constitutes advancing the banks' interests.
 
2012-05-03 05:11:03 AM

DrPainMD: Trolljegeren: Sergeant Grumbles: Why are these people not in jail?

I'm going with regulatory capture

From your link: "In economics, regulatory capture occurs when a state regulatory agency, created to act in the public interest, instead advances the commercial or special interests that dominate the industry or sector it is charged with regulating."

Ummmm... the regulators weren't advancing the interests of the banks, they were advancing the interests of those who couldn't afford to buy houses unless the banks were coerced into lending. Over 450 FDIC-insured banks have failed since the start of the real estate decline, and more would have failed if not for the bail outs... I don't see how that constitutes advancing the banks' interests.


Sorry, but to suggest the poor banks were forced to make liar loans against their will is beyond stupid.
 
2012-05-03 05:14:23 AM

Corporate Self: DrPainMD: Trolljegeren: Sergeant Grumbles: Why are these people not in jail?

I'm going with regulatory capture

From your link: "In economics, regulatory capture occurs when a state regulatory agency, created to act in the public interest, instead advances the commercial or special interests that dominate the industry or sector it is charged with regulating."

Ummmm... the regulators weren't advancing the interests of the banks, they were advancing the interests of those who couldn't afford to buy houses unless the banks were coerced into lending. Over 450 FDIC-insured banks have failed since the start of the real estate decline, and more would have failed if not for the bail outs... I don't see how that constitutes advancing the banks' interests.

Sorry, but to suggest the poor banks were forced to make liar loans against their will is beyond stupid.


Actually, it's well-documented.
 
2012-05-03 08:07:05 AM

DrPainMD: Corporate Self: DrPainMD: Trolljegeren: Sergeant Grumbles: Why are these people not in jail?

I'm going with regulatory capture

From your link: "In economics, regulatory capture occurs when a state regulatory agency, created to act in the public interest, instead advances the commercial or special interests that dominate the industry or sector it is charged with regulating."

Ummmm... the regulators weren't advancing the interests of the banks, they were advancing the interests of those who couldn't afford to buy houses unless the banks were coerced into lending. Over 450 FDIC-insured banks have failed since the start of the real estate decline, and more would have failed if not for the bail outs... I don't see how that constitutes advancing the banks' interests.

Sorry, but to suggest the poor banks were forced to make liar loans against their will is beyond stupid.

Actually, it's well-documented.


Too lazy to Google a citation from a non-partisan source?

Here's mine:

farm5.static.flickr.com
 
2012-05-03 08:35:49 AM

impaler: Magorn: Depends on how you define your terms I suppose. But "major player in the mortgage market" , probably wouln't hve fit in the headline as neatly

True. We should look at the failure rate of FAM/FRE backed mortgages vs others.

[growlersoftware.com image 473x279]


I would rather look at how much it has cost us as taxpayers to bail out each of those groups and how much of that bailout they have repaid.


The Federal Housing Finance Agency now estimates that the net cost of the bailouts through 2014 will be about $124 billion

and of course there is this

the government regulator for Fannie and Freddie, approved $12.79 million in bonus pay after 10 executives from the two government-sponsored corporations
 
2012-05-03 08:45:28 AM

DrPainMD: impaler: Magorn: Depends on how you define your terms I suppose. But "major player in the mortgage market" , probably wouln't hve fit in the headline as neatly

True. We should look at the failure rate of FAM/FRE backed mortgages vs others.

[growlersoftware.com image 473x279]

You really need to look into why the banks were giving out questionable loans.


I already have. That farking bullshat you just posted is Republican lies.

Wow! What are the odds? Objective empirical measurement of reality says one thing, Republicans say another. It's like they're lying sacks of shat or something.

Link

www.ccc.unc.edu
 
2012-05-03 10:01:54 AM

impaler: DrPainMD: impaler: Magorn: Depends on how you define your terms I suppose. But "major player in the mortgage market" , probably wouln't hve fit in the headline as neatly

True. We should look at the failure rate of FAM/FRE backed mortgages vs others.

[growlersoftware.com image 473x279]

You really need to look into why the banks were giving out questionable loans.

I already have. That farking bullshat you just posted is Republican lies.

Wow! What are the odds? Objective empirical measurement of reality says one thing, Republicans say another. It's like they're lying sacks of shat or something.

Link

[www.ccc.unc.edu image 335x270]


You do know that Clinton threatened to put ALL banks under the CRA if they didn't start adopting the loose CRA standards, don't you?

Or that HUD lowered lending standards, too?

Or that, in 1996, HUD directed Freddie and Fannie to provide at least 42% of their mortgage financing to borrowers with income below the median in their area. This target was increased to 50% in 2000 and 52% in 2005. In addition, HUD required Freddie and Fannie to provide 12% of their portfolio to "special affordable" loans. Those are loans to borrowers with less than 60% of their area's median income. These targets increased over the years, with a 2008 target of 28%.

Watch this video and tell me who's lying.

I used to have a bunch of links to official government web sites that documented various government agencies' coercion tactics (they were very proud of forcing the evil, greedy banks to loan money to the poor), but, surprise, surprise, the links are all dead now.
 
2012-05-03 10:12:22 AM
PS. Here's a life-long Democrat who, after months of research, also came to the conclusion that it was Clinton, Greenspan, and the Democrats in Congress that caused and then denied the existence of the housing bubble.
 
2012-05-03 11:12:26 AM

DrPainMD: You do know that Clinton threatened to put ALL banks under the CRA if they didn't start adopting the loose CRA standards, don't you?

Too bad he didn't. Could have avoided disaster.

www.ccc.unc.edu
 
2012-05-03 11:18:18 AM

DrPainMD: Or that HUD lowered lending standards, too?

Or that, in 1996, HUD directed Freddie and Fannie to provide at least 42% of their mortgage financing to borrowers with income below the median in their area. This target was increased to 50% in 2000 and 52% in 2005. In addition, HUD required Freddie and Fannie to provide 12% of their portfolio to "special affordable" loans. Those are loans to borrowers with less than 60% of their area's median income. These targets increased over the years, with a 2008 target of 28%.


And why did they push for that?

Because they were "falling behind the private sector."

But we're to believe the government directed agencies that changed their policy to better compete with private institutions, because they were lagging them, are to blame for the mess?

growlersoftware.com
 
2012-05-03 11:20:32 AM
Not that I'm posting facts that support my opinion, while DrPainMD can only point out that other people are saying what he's saying.

An echo is not evidence.
 
2012-05-03 11:21:21 AM
Note that I'm posting facts that support my opinion, while DrPainMD can only point out that other people are saying what he's saying.

An echo is not evidence.


rather
 
2012-05-03 11:42:00 AM
impaler

CRA vs Subprime isnt the proper comparison. It is CRA vs Prime.

According to Bank of America (which isnt a trusty source at all, but its what I got), as of Sept 2009, CRA made up 6% of their loans and 17% of their defaults and 20% of their writeoffs.

CRA was far from the biggest problem in the housing debacle. It might have been in the top 10. Those that blame it are way oversimplifying things. But those who dont think CRA was any part of the problem, well, cant read farking numbers.
 
2012-05-03 11:45:41 AM
impaler

But we're to believe the government directed agencies that changed their policy to better compete with private institutions, because they were lagging them, are to blame for the mess?

Part of the problem, yes. Once again, not the primary problem, but I put Fannie and Freddie in front of CRA on the problem list.

They never should have changed their policy. They should have remained financially sound by only buying sound mortgages like they had mostly done up to ~1995. While I despise the entire concept of GSEs, at least Freddie was competently run from 1970-1995.
 
2012-05-03 01:01:15 PM

Tjos Weel: They never should have changed their policy. They should have remained financially sound by only buying sound mortgages like they had mostly done up to ~1995. While I despise the entire concept of GSEs, at least Freddie was competently run from 1970-1995.


Agree, but as you can see from that market-share chart, that just would have slightly reduced the problem.
 
2012-05-03 01:13:54 PM
Let's not forgot the 2004 ruling freeing up the Big 5* to increase their leverage.

Link

* Lehman Brothers, Bear Stearns, and Merrill Lynch, Goldman Sachs and Morgan Stanley.
Strike denotes failed bank.
 
2012-05-03 03:39:17 PM
impaler

Agree, but as you can see from that market-share chart, that just would have slightly reduced the problem.

True, but since the government (read: ME) was on the hook to pay for F&F's failures, that is okay with me. Of course, as it turned out, we were on the hook for the banks failures too, but there is no reason that we should have been. I have no problem with banks taking insane risks as long as we are willing to let them fail.

No COMPANY is too big to fail

No COUNTRY is too big to fail
 
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