Deborah Garvin, mortgage broker in CA, gives an opinion on how our judicial system handles big time mortgage fraud. I expect that we will see more ineffectual 'justice' as the latest investigations into banking practices handling foreclosures come to light.
That’s right: It couldn’t happen to a “nicer” guy....Mozillo finally gets some comeuppance.
Just reported: Anthony Mozillo, former CEO of Countrywide Mortgage (now part and parcel of Bank of America) has settled with the SEC for violations of defrauding investors of the looming certainty of the mortgage meltdow. The fine: 67.5 Million. And, one of the largest ever given to a corporate executive.
The fact that Mr. Mozillo agreed to pay this fine through negotiations with the SEC should be very obvious to the American public. Mr. Mozillo and his attorneys (as well as Bank of America and the SEC) know that bringing him to trial would have absolutely opened up the opportunity for more criminal charges (from investors, consumers and nearly every other entity attached to purchase of Countrywide loans).
Without a doubt, Mr. Mozillo is widely regarded as evil incarnate by people within and outside of the mortgage industry. Except possibly Senators Dodd (Chairman of the Banking Committee) and Senator Conrad (Chairman of the Budget Committee and a member of the Finance Committee) who both received preferential (and illegal, per then guidelines of FNMA) Fannie Mae loans through their direct connection to Anthony Mozillo.
Both Senators refinanced properties through Mozillo’s (and Countrywide’s) V.I.P. program in 2003 and 2004. The loans in question allowed for significant reduction in costs to outright waiving of fees for the elite V.I.P. member. And, in some cases, loans that were outside the allowable loan limits for FNMA were closed (and sold) to the mortgage giant.
The SEC and Congress decided our illustrious Senators and Mr. Mozillo did nothing wrong in these related transactions (of which I am still left scratching my head) so there were never any consequences for any people involved in Countrywide’s V.I.P. program).
Besides lying to the SEC and Countrywide investors about the looming meltdown of the mortgage industry it is also important for the American consumer (both in and out of the real estate industry) to understand how Mr. Mozillo fleeced the American Homeowner through Countrywide’s loan product offering and loan officer compensation program.
In the mortgage industry it is widely known (required and legislated) that a mortgage professional has a fiduciary responsibility to their client to provide the best financial advice for the client (not the loan officer). This is not simply a “PollyAnna” viewpoint, but evidenced by the fact that (in ethical organizations) a consumer is going to pay a loan officer compensation based upon doing a loan with the loan officer.....ANY loan.
But, at Countrywide the loan officers were encouraged and enticed to steer consumers to the “1%, negative amortization loans” by dramatically increasing their commissions and their performance ratings within the corporation. Simply put, a loan officer’s standard of living and continuation with Countrywide was based upon his/her ability to “sell” the consumer on this specific product (without consideration for benefit to the consumer).
While I am pleased to know Mr. Mozillo will be deprived 67.5 Million of his “hard earned” (give me a break!!!!!) spoils from the meltdown of the mortgage industry, I certainly take no solace in this settlement. Rest assured, the millions (billions?) Mr. Mozillo “earned” through the boom years ensures that the fine is a mere pittance and his lifestyle will not be remotely affected.
In my humble opinion Mr. Mozillo should be playing checkers with Mr. Madoff. As yet, he has not paid his debt to the American public. Perhaps the further investigations into the foreclosure crisis will continue to reveal how Mr. Mozillo (and other Banksters, to be sure) helped fraud American consumers all the way to the bank.
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