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Loan Modification & Loan Workout News published a new entry entitled "Senator Schumer Has Some Serious Questions for Mr. Mozillo" on 11/21/2007 9:26:06 AM, written by Moe.


Senator Schumer Has Some Serious Questions for Mr. Mozillo

Oh, this is great. Jane Wells came out on CNBC and announced she had a letter in her possession from Senator Schumer to Countrywide's CEO, Angelo Mozillo

I immediately went to her blog and had to post the details of the letter for my readers. What do you all think about these question and will they get answered by Mozillo?

Senator Schumer wants answers, including documentation to back up what he claims Mozilo told him about how Countrywide does business, in their meeting.

Schumer also wants structural changes for Countrywide. For example, he writes, "I believe that the practice of paying mortgage brokers higher premiums for higher cost mortgage products, commonly known as yield spread premium compensation, is inappropriate." The "yield spread premium compensation" is another way of saying "commission." I'm told that when an independent mortgage broker sells a loan, he or she has to disclose that commission.

But if you work for the lender, in other words, if you work for Countrywide, you don't have to say how much you're getting paid to push a particular product. It appears Senator Schumer wants to know just how much Countrywide brokers were getting paid, and if they got paid more for selling more profitable, but riskier, loans.

Sen. Schumer then asks Mozilo ten questions. Here they are (the last two appear to be based on actual comments the CEO made to the Senator:

1) What percentage of Countrywide's subprime mortgages came from independent mortgage brokers?

2) Does Countrywide pay independent mortgage brokers more for loans with prepayment penalties? Did it ever do so?

3) How many buybacks did Countrywide do in 2006? What was the value?

4) What percentage of Countrywide's subprime mortgages were refinancings vs. purchases in each year from 2000-06? Please include data from your retail branches as well as your independent mortgage brokers.

5) How much business in piggyback loans did Countrywide do in 2006?

6) "Inside the Countrywide Lending Spree," by Gretchen Morgenson, that appeared in the New York Times on August 26th, stated that a C-minus rated borrower with a 500 credit score could get a $500,000 mortgage from Countrywide. Does Countrywide provide, or has Countrywide ever provided, mortgages on terms similar to this report?

7) The same article stated that Countrywide would lend to borrowers who had been 90 days late on a current mortgage twice in the past 12 months. Does Countrywide lend, or has it ever lent, to such borrowers?

8) That same article also stated that Countrywide had profit margins as high as 15% on some subprime products. Does this article accurately report Countrywide margins for any existing or past products?

9) Please provide the documentation you discussed to support your claim that Countrywide makes the same amount of money on FHA loans as on other types of loans.

10) Please provide the documentation you discussed to support your claim that Countrywide had         received accounting advice for not giving independent mortgage brokers 1099 forms.

Jane Wells had these question for Countrywide and this is the response:

We asked Countrywide if it had responded. We haven't heard back. As for that last note about 1099 forms, I'm told it is very unusual for a company of this size not to send out tax forms to independent brokers who sell its loans. I was shown an email from Countrywide telling one such broker "Unfortunately, we don't issue 1099s. Sorry."

Why not? To save money? To leave less of a paper trail? Email me with the reason you think they don't.

Permalink: loanworkout.org/2007/11/21/senator-schumer-has-some-serious-questions-for-mr-mozillo.aspx


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NotSoFun4Counrtywide

 

Schumer's "Top Ten" List For Countrywide Not So Funny
 
Schumer's "Top Ten" List For Countrywide Not So Funny - Funny Business with Jane Wells - CNBC.com
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~beenawhile
Go Schumer!
What an article. LOVE it!

They don't provide a 1099 to the brokers because that would hold a program on their system, with the info and data, in which could be used against CountryWide at a later date.

Smart move on their part of course.... it's their way of covering up yet more of the fraud.
After all if there is no record of the piggybacks and YSP's, they cannot be held accountable.

So what can be done to Prove how much Countrywide has paid brokers for YSP, piggybacks?

Is it completely untraceable?
I don't think so, but could be wrong.

Go GET EM SCHUMER!



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Joe B
Actually the issue of not providing 1099's could also subject a very large number of mortgage brokers to being nailed for fraud on the IRS. After all, this represents real income, and I would be willing to bet that they liked working with Countrywide because they allowed them to actually "hide" their income! Very interesting.

On the issue of paying these brokers, the data is there. It just may be difficult to find. Some poor fool is going to have to go through a lot of data during discovery to find all the payments paid out and match them to brokers and certain deals. But the data is there!

CW has got the start of a very big mess on their hands.

I'm just miffed that they still are not discussing SERVICING fraud!! They are all tap-dancing around the issue, but nobody is giving it any attention!!

JB
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O -

Send him a letter. Let him know how you feel.

I think this is a GREAT START! He needs to ASK All the Mortgage compamy's and the servicers the same 10 QUESTIONS. I wish he would Aks Ameriquest the same QUESTIONS.
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~beenawhile
Joe,
I agree tenfold. 
and you're right they are still dancing around the MSF, O-'s got a great idea, we should all send an email about the MSF and how CountryWide makes huge profits off of illicit fees, and fake charges, to the accounts, and then how CountryWide makes profit upon the foreclosure of the property.

I think it is a start with Schumer, asking the questions, if he knew about us, and our probs.......

I think it would blow him away!
Great Idea O-

I know its Thanksgiving now, and we are all trying to prepare for the Holiday, but lets write a letter to Schumer when we have a spare moment, and then post it here on this thread.

Together with us all Schumer may listen, and hear it well.




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tap dancing
it's all about  MORTGAGE FRAUD

somewhere in the mess you will find mortgage servicing fraud  , this servicing fraud will take a while to get the recognition that it deserves ......
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AMERIQUEST SUCKS!

Loan Modification & Loan Workout News: Stop Foreclosure with Ameriquest AMC

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..

Schumer needs our attention. We have letters to write.

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