Mar 9, 2009
The former execs of Countrywide Financial, which was once the largest mortgage broker in the country, have started a new company, called PennyMac. They buy up defaulted mortgages from the U.S. government for about one third what the government is owed, and then get to keep a part of everything they collect.
The execs of PennyMac are the very people who pushed thousands of people into mortgages they couldn’t afford, with misleading or even fraudulent terms. There was even a name for such loans in the mortgage business – “liar” loans.
Countrywide and execs like Stanford Kurland, its ex-president, now head of PennyMac, made multi-millions in selling home loans to banks, which bundled them together to resell to investors. In so doing, they helped create the biggest real estate bubble, followed by the largest foreclosure crisis since the Great Depression.
Now they are making more millions on these same mortgages all over again. One of the PennyMac execs described their profits this way: “It’ s off-the-charts good!”
Handing over these mortgages to former Countrywide execs is “sort of like the arsonist who sets fire to the house and then buys up the charred remains and resells it,” as Margot Saunders, a lawyer for the National Consumer Law Center put it.