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akuma587 on 05 July 2009
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TheRealMafoo said:
Avinash_Tyagi said:

Again you're blaming government for the stupidity of the bank during the last few years banks were giving loans to people with no income and no collateral, no jobs whatsoever, this was their own stupdity in action.  You don't give someone a 300K loan when they have no income or collateral or anythign to cover the loan, its just common sense.

I mean when I bought my car, I needed 5 grand in a loan, and the credit union I went to made sure I was making enough money, had collaterl and a cosigner before I got the loan, and it was only five grand.  That's how a bank should act when loaning out money.

The Bank that gave that loan is not the bank that's in trouble. They most likely sold that loan the next week to Fannie Mae or Freddie Mac and made a profit.

Fannie and Freddie should have never offered to buy the loan in the first place. if the government had not made it posable for the bank to sell the loan, they never would have given it.

The banks that are in trouble, are then ones that purchased a massive block of loans that these government run companies bought, packaged, gave a high ratings to, and said were the safest posable place to invest.

That's the problem.

 
 
 
 
 
 
 
 
 
 
 
 
 
 

SEC charging ex-Countrywide CEO with fraud

Mozilo led lender who was major player in the subprime mortgage market

http://www.msnbc.msn.com/id/31108985/ns/business-us_business/

WASHINGTON - Federal regulators on Thursday charged Angelo Mozilo, the former chief executive of mortgage lender Countrywide Financial Corp., and two other company executives with civil fraud.

The Securities and Exchange Commission’s civil lawsuit, filed in federal district court in Los Angeles, also accuses Mozilo of illegal insider trading.

Countrywide was a major player in the subprime mortgage market, the collapse of which in 2007 touched off the financial crisis that has gripped the U.S. and global economies.

Mozilo, 70, is the most high-profile individual to face formal charges from the federal government in the aftermath of the crisis. He has denied any wrongdoing and Mozilo’s attorney on Thursday called the SEC’s allegations “baseless.”

Civil fraud charges also were filed against Countrywide’s former chief operating officer David Sambol, 49, and ex-chief financial officer Eric Sieracki, 52.

The trio “deliberately misled” Countrywide shareholders, SEC enforcement director Robert Khuzami said at a news conference at agency headquarters. While they painted a picture of robust performance, the real Countrywide was “buckling under the weight” of soured mortgage loans, he added.

Mozilo “was actively taking his own chips off the table” by selling his shares to reap nearly $140 million in illicit profits, Khuzami said.

The SEC is seeking injunctions and unspecified civil fines against Mozilo, Sambol and Sieracki and wants them to be barred from serving as officers or directors of any public company. The agency also is seeking unspecified restitution of allegedly ill-gotten profits from Mozilo and Sambol.

Mozilo’s attorney David Siegel said the stock sales “complied with applicable laws and regulations, and were made under the terms of a series of written sales plans which were reviewed and approved by responsible professionals.”

“All of the SEC’s allegations will be answered completely in court and disproved with the full facts and evidence,” Siegel said in a statement.

Attorneys for Sambol and Sieracki also said their clients will fight the charges.

“Making groundless allegations and losing in court will not help the SEC restore its reputation,” said Sambol’s attorney Walter Brown.

Sieracki’s attorney Shirli Fabbri Weiss said her client bought Countrywide stock during the time when the SEC claims he was withholding information from investors, and “lost money just like all other investors in Countrywide stock.”

The SEC and federal prosecutors have undertaken wide-ranging investigations of companies across the financial services industry, touching on mortgage lenders, the Wall Street investment banks that bundled home mortgages into securities sold to investors, and other market players.

 

 

And Mafoo, now it sounds like you are arguing that the government should have better regulated this practice even though you created a thread a week or so ago lambasting the government for proposing to do this EXACT SAME THING.

 



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