Countrywide admits loan officers made errors

[Texas53]

Countrywide admits loan officers made errors
http://www.chron.com/disp/story.mpl/headline/biz/5758928.html

Errors???? Then Countrywide should pay off the loans they made errors on. :rolleye0001:

[NJ_Nurse]

I absolutely agree Countrywide should be held accountable for any and all errors. It's not enough to say "Sorry" and "We're going to improve things in the future."

[Cat]

Yeah, tell the people who already lost their homes. :1187603408.CR.Mothe

[SteveG]

The only "errors" they made were following company policy.

[Pauli]

ack.. countrywide... you would not believe the number of homes in my area that are in foreclosure that were mortgaged through countrywide. There were/are a couple of developers in the area that went in, built the homes and then sold them. If the family did not have the downpayment the developer would put the money in their account to look as if they did and then the loan would go through. they jacked up the price to account for the down payment amount, then the developer would get his money back out.. I have always wondered if countrywide was in on this little deal.

[SteveG]

How could we have the largest TAXPAYER bailout of the S/L's and banks in the 1980's just 4 years after they deregulated the mortgage lending industry, and then they continue to deregulate and allow for 110 - 125% loans and not require lenders to verify borrowers income and capability to repay these loans?
Then to top that off they took the independent appraisers and made them salaried employees of mortgage companies by enacting the direct endorsement program allowing for in house staff appraisers. No matter how many foreclosures you have if the loan is backed with adequate collateral then the lose would be minimum if any lose at all.

Partial post from msnbc blog:
Freddie and Fannie helped to eliminate the honest appraisers so to artificially inflate the home price for higher profit, The Office of Thrift Supervision knew it, FHA/HUD had a HUGE hand in it. Mortgage Guaranty Insurance Corp. knew it.

In the late 1980's the House Government Operation Committee said: "If sound valuation practices are not followed, HUD"S risks are increased." Yet they continued deregulating.

Why? Because instead of being punished, everyone gets bonuses.

I was put out of business because I tried to protect the public from exactly what is happening now, I have spent the last 20 years trying to get the MEDIA and Congress to address this issue.

I cannot print a web site but go to http://appraiserspetition.com/
How can a problem that was blamed for 1/2 of the LAST taxpayer bailout of these crooks STILL be a problem today? Your Congress and the MEDIA

This is a letter I received when trying to get help as an appraiser in Texas.
Our Congress not only knew this second bubble would bust they created the whole thing.
Forgive my simplistic view, but if a mortgage has adequate collateral there would be very little to no loss to all, so why did Congress eliminate the honest appraisers that refused to succumb to the pressures to hit the "right numbers" in the 1980's after the last bailout?

HENRY B GONZALEZ, TEXAS. CHAIRMAN
BRUCE F VENTO. MINNESOTA CHARLES E SCHUMER. NEW YORK KWEISI MFUME, MARYLAND JOHN J. UFALCE. NEW YORK MAXINE WATERS. CALIFORNIA HERBERT C. KLEIN. NEW JERSEY CAROLYN B. MALONEY.NEW YORK PETER DEUTSCH, FLORIDA LUIS V. GUTIERREZ. ILLINOIS BOBBY L RUSH, ILLINOIS LUCILLE ROYBAbALLARD. CALIFORNIA THOMAS M. BARRETT. WISCONSIN ELIZABETH FURiiE. OREGON NYOIA M VELAZQUEZ, NEW YORK ALBERT RUSSELL WYNN. MARYLAND CLEO FIELDS. LOUISIANA MELVIN L WATT NORTH CAROLINA

U.S. HOUSE OF REPRESENTATIVES
SUBCOMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
OF THE COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS
ONE HUNDRED THIRD CONGRESS B303 RAYBURN HOUSE OFFICE BUILDING WASHINGTON, DC 20515-6052

MARGE ROUKEMA. NEW JERSEY DOUG BEREUTER. NEBRASKA THOMAS J. RIDGE. PENNSYLVANIA RICHARD H. BAKER. LOUISIANA CRAIG THOMAS. WYOMING JOE KNOLLENBERO. MICHIGAN RICK LAZIO. NEW YORK . ROD GRAMS, MINNESOTA SPENCER T. BACKUS III. ALABAMA MICHAEL N. CASTLE. DELAWARE DEBORAH PRYCE. OHIO TOBY ROTH. WISCONSIN
BERNARD SANDERS. VERMONT (202) 225-7054

May 18, 1994

Mr. Steve G
4820 Westgrove #2205
Dallas, Texas 75248

Dear Mr. G:
I am writing in response to the recent letter regarding your unfortunate experiences as an appraiser in the past few years. First of all, I commend your meritorious honesty as a certified appraiser in the state of Texas. I sympathize with you and find it a shame that the fiduciary relationship you attempted to maintain with your employers went unnoticed and unrewarded.
Unfortunately, the Congress cannot legislate honesty throughout the banking and appraisal industry. I am confident that there are many respectable banks and mortgage companies who are in great need of an appraiser with your integrity. Rest assured that I always fight to uphold the FHA guidelines and I will continue to maintain the most effective way to protect borrowers and deter unfair lending practices.

Thank you for contacting me personally on this matter. With every best wish I remain
Henry B. Gonzalez Chairman

Of course they couldn't regulate HONESTY in the industry, the PAC's and lobbyist's were paying them to de-regulate it.

Again, how can something that was declared; "a serious national problem costing taxpayers billions..." by a Congressional subcommittee in 1987 still be a problem TODAY?

One real simple question:
How does one:
"maintain the most effective way to protect borrowers and deter unfair lending practices. "
If one cannot regulate HONESTY in the banking and appraisal industries?

Why (sorry, I lied about one question) when a Congressional subcommittee, chaired by Con. Doug Barnard, Jr, said:
"...that it is extreme pressures on appraisers from real estate lenders and borrowers that MOST often cause bad appraisals."

"Alarming numbers of lending institution officials regard appraisals as an obstacle to be overcome or a rubber stamp..."

"While appraiser ineptitude is occasionally responsible for inadequate appraisals, MOST abusive practices result from explicit or implicit threats against appraisers, by real estate lenders and borrowers, that their services will be discontinued if they fail to provide the "right" numbers."

did FHA/HUD enact the direct endorsement program allowing lenders to hire in-house staff appraisers, in 1985?

They just took an independent entity and made him an employee of someone who viewed him as an "obstacle to be overcome"

If the lenders had such a strong adverse effect on appraisers when they were independent contractors, what are they going to do now that the CONGRESS made them salaried employee's?

Again go to the petition, HOW is this STILL a problem TODAY.

YOUR Congress and a media owned by big business.

And I have been after everyone from Congress to Presidents and especially THE MEDIA every since, for if all mortgaged home loans had ADEQUATE collateral and not backed by an artificial market this wouldn't / COULD'T happen,

That's the whole point in having an independent appraisal. To make sure the bank, the borrower and MOST important the TAXPAYER is protected from unnecessary losses.

[SteveG]

http://www.dunwalke.com/7_HUD_is_a_Sewer.htm

"When my staff approached me with a proposal to bail out a mortgage company so they could continue to lose money for us, I asked why we should spend money to lose more money in a way that would harm communities. After a long silence during which 30 staff members intently studied their feet, one brave soul explained to me that the mortgage bank was owned and run by a major Republican donor. Shocked, I said. “I am a major Republican donor,” and pointing to my presidential cufflinks that were adorning my French cuffs, “I got a pair of cuff links. You get cuff links. You don’t get $400 million of federal credit to throw down the drain.” My staff looked at me like I was so naive and clueless that there was no point in trying to communicate with me — better to let me learn the hard way."

[SteveG]

I believe this is the proverbial barn door being closed after ALL the livestock are gone and butchered for market.
http://www.ots.treas.gov/docs/4/481084.pdf

When I was still in Dallas seeking help as afore printed letter shows, the OTS declined to ever step in and do anything.

“Steve, we receive 4 to 5 calls just like yours every week, but our hands are tied, in fact they are trying to do away with all appraisers all together.”

Instead they just rendered the appraiser to a useless lap dog, who either gave what the lender/realtor what they wanted or they were eliminated. So NOW 20 years later, they are going to insist on appraisers doing their job? Amazing

Because I refused to commit federal banking fraud by knowingly over evaluating real estate prices, so to protect you the borrower, you the investor and you the TAXPAYER from unnecessary losses, I was eliminated.

We as appraisers were told / NO, ordered to report indications of fraud, waste and mismanagement, yet when I did you can see what I ran into, again refer to above letter from Rep. Henry B. Gonzalez.

Why are the people that use and abuse the "systems" get bailed out and "we the people" that lived within our means and / or tried to prevent such exorborent frauds are made to suffer and pay for their over indulgences?

[SteveG]

Ms Pauli:
"I have always wondered if countrywide was in on this little deal."

Yes Countrywide would of known all about it, for they know the borrower can not afford the house or do not have cash on hand.

Why do they not care? They bundle ALL the loans up and sell them to the secondary markets and grab their profit (cream) off the top and as long as they have an appraisal they (coutrywide) is not liable as a company.

This is one of the big reasons you pay higher insurance premiums on your car/life/property because of bad investments in bad mortgage "paper" (secondary mkts) this is why a lot of retirement funds are shakey (secondary mkts)

But fear not for you as a taxpayer insure ALL of them.

So when you are forced to bailout the moortgage lending crooks it hits you 3 to 4 differants ways besides.