March 4, 2009

Former Countrywide execs back in the game

The irony of former Countrywide Financial executives reaping huge profits buying distressed U.S. mortgages hasn't been lost on consumer groups.

Countrywide's former President Stanford Kurland now heads the Private National Mortgage Acceptance Co., known as PennyMac, which is buying distressed loans from the government and banks at fire-sale prices, then offering new mortgage terms to homeowners or pushing homeowners out the door with foreclosures if necessary, The New York Times reported Wednesday.

Business, Kurland said, is off-the-charts good.

But, the business is also sort of like the arsonist who sets fire to the house and then buys up the charred remains and resells it, Margot Saunders, an attorney at the National Consumer Law Center, told the Times.

Some say firms such as Countrywide are partly to blame for a national housing debacle that set off a chain of economic events that put the national financial system in a deep freeze.

Lawsuits claim Kurland played a pivotal at Countrywide, which offered loans with teaser interest rates that expired, leaving homeowners with loans the couldn't pay.

It is tragic and ironic. But then again, greed is a growth industry, Blair Nicholas, a lawyer representing retired Arkansas teachers who are suing former Countrywide executives, said to the Times.