December 18, 2007

So why hasn't Countrywide Toxic Mortgage gone bankrupt yet? Simple. They conned the monkeys at the FHLB into lending them $50 billion plus


Right before banks fail you usually see them go to the central bank or the government as their "lender of last resort". And then they fail anyway. Just look at the Northern Rock mess in the UK for the perfect example, a failed bank which will now be nationalized (and the taxpayers of course get screwed).

Countrywide Toxic Mortgage, a corrupt institution which will fail in the end, has been looting the Federal Home Loan Bank, using it as its "personal ATM", potentially robbing taxpayers of over $50,000,000,000 so far and counting.

Taxpayers!? How could that be? Well, because when the FHLB fails, who do you think will fund their bailout? You got it. Us.

So how is Angelo Mozilo and his gang of thieves doing this? Simple. They've conned the FHLB into giving them all those billions by putting up mortgages as collateral.

Yes, if it wasn't so funny it'd be sad. They're putting up their toxic mortgages as collateral, and the FHLB is taking them.

The FHLB is either too corrupt or too stupid to know that there's a housing crash underway in the US, and that the crap that Countrywide has on their books is nowhere near worth what Angelo says its worth.

It's one big house of cards HP'ers. And when it all caves in, and the media is all a-twitter, asking "how did this happen"? and "nobody saw this coming", well, once again, it was all just so obvious (for HP'ers).

What stops this madness? When someone in DC finally realizes that the FHLB is being had, tells them that taxpayers will NOT bail them out, and they finally cut Countrywide and Mozilo off.

And then things will get interesting.

Sen. Charles Schumer, a New York Democrat and member of the Senate Banking Committee, accused Countrywide on Monday of treating the FHLB system "like its personal ATM," having borrowed $51.1 billion as of Sept 30.

He said that, as Countrywide's mortgage portfolio deteriorates, the FHLB exposure "poses an unreasonable risk."

Yet Bigelow said "we are very familiar with FHLB collateral requirements, and we are in full compliance ... The FHLB has some experience in risk management, and they probably have some idea what they're doing in terms of their lending activities."

23 comments:

christiangustafson said...

Time now for show trials and purges, Keith. Firing squads at dawn.

These people have created systemic risks that the rest of us will bear. The coming depression will not be truly nasty. This time around we have little social cohesion and a meth-addled underclass to contend with.

Short what you can while you can! It's smash and grab time in the financial markets first. Then you must defend your dollar pile from the looters, both bums and Boomers.

The enviros are right, it's time to return to Nature. Only this one is Hobbesian, not REI and granola.

chslaxcoach said...

Okay, so I have a loan with Countrywide for roughly $100K. Do you think would take $60K for it, cash today?

Seriously, what happens to my loan when these guys go under? Do they just sell it?

keith said...

See the blog post below this one. If San Diego has already crashed 15%, is Countrywide valuing any San Diego mortgage made in 2005, 2006 or 2007 at 15% less than what it was made for?

Of course not. That would be "marking to market"

House of cards. Ponzi Scheme. And even though Angelo Mozilo will be in jail, will it really matter when it's us, the taxpayers, in the end who end up getting screwed.

Anonymous said...

I guess TanMan forgot to grease Chucky's palm. Notice how Chucky doesn't ever criticize the Wall Street pimps who funded and sold the toxic debt.

CHARLES E. SCHUMER: CAREER PROFILE (SINCE 1989)
Top Contributors
1 Goldman Sachs $458,440
2 Citigroup Inc $399,716
3 JP Morgan Chase & Co $325,200
4 Morgan Stanley $298,946
5 Bear Stearns $230,350
6 Merrill Lynch $226,150
7 UBS AG $214,250
8 Credit Suisse Group $199,044
9 Lehman Brothers $181,450
10 Time Warner $167,500
11 Ernst & Young $155,500
12 Paul, Weiss et al $150,300
13 Metropolitan Life $147,999
14 Neuberger & Berman $145,500
15 Deloitte Touche Tohmatsu $135,199
16 Newmark & Co Real Estate $128,950
17 Schulte, Roth & Zabel $118,000
18 American International Group $116,375
19 Lazard Freres & Co $115,750
20 Sullivan & Cromwell $113,500

HOUSE2008 said...

Can the FHLB be made to reveal WHAT was used as collateral? Who oversee's FHLB? Can they be sued to reveal that information since it's taxpayers money that's being used via the argument it's public money therfore public records? Can I use FOIA against them?

Princess Mononoke said...

chslaxcoach said...
>>Seriously, what happens to my loan when these guys go under? Do they just sell it?
December 18, 2007 6:33 AM

Yeah, your loan will get passed on. Maybe once or twice who knows right now. My advice for your own sanity is STAY on top of who is servicing your loan each and every time you get a notice in the mail. Keep all your records in one place for quick reference.

Also, very important if you have your taxes and insurance impounded/escrowed make sure the NEW servicer knows about it... and ALWAYS follow up and make sure these two items have been PAID! Call the insurance co yourself and either look up your tax info with your county online or call them.

I hope this info helps you...

Anonymous said...

"Some idea"... yes.

Anonymous said...

DOPES!!!

keith said...

When the banks fail, here's a guy you can blame - Ronald Rosenfeld, who is the chairman of the Housing Finance Board:

http://www.msnbc.msn.com/id/22302135/

"There is always a risk," he admitted. "But the reward in my opinion is enormously more significant than the risk." The FHLB is protected against credit risk on its lending by tough collateral rules and a requirement to post de facto margin. Mr Rosenfeld said the regulator was on "high alert". But he said there was no blanket prohibition on posting complex or illiquid securities as collateral for loans. "Once we start saying we will not take something that is hard to value, it exacerbates liquidity problems in our system."

The 12 FHLBs have investment portfolios with $130bn (€90.4bn, £64.4bn) in mortgage-backed securities. This includes some subprime loans. Finance Board staff estimate that the dollar-weighted exposure to securities backed by subprime loans is less than 10 per cent of the private label MBS holdings.

"We believe after very extensive analysis that there is very minimal credit risk in the MBS held by the banks," Mr Rosenfeld said.

Asked what would happen to the FHLB portfolios if house prices fell by 20 or 30 per cent, he replied: "I do not know the answer, but I can tell you I do not want to hear the news."

Anonymous said...

Or maybe it's because the apocalypse you goons have been predicting for 30 years still hasn't arrived.

According to the goon out there Countrywide should be bankrupt, Wells Fargo should be gone as shoudl BofA, Bear Sterns, and every other bank.

I guess everyone should be out of business except the makes of tinfoil.

Anonymous said...

Anonymous said...
Or maybe it's because the apocalypse you goons have been predicting for 30 years still hasn't arrived.

According to the goon out there Countrywide should be bankrupt, Wells Fargo should be gone as shoudl BofA, Bear Sterns, and every other bank.

I guess everyone should be out of business except the makes of tinfoil.

December 18, 2007 1:24 PM

They are bankrupt you idiot! They used to be able to hide all their toxic paper off balance sheet in an SIV. If you noticed Citigroup recently had to bring $49 billion of this toxic paper back on their balance sheet. The banks have been bankupt for years and years and years. Mergers, off balance sheet accounts, SIV's, and derivatives have all served to make the collapse that much larger and destructive.

BA-BOOM, the system will implode and take everything with it.

Anonymous said...

Or maybe it's because the apocalypse you goons have been predicting for 30 years still hasn't arrived.

According to the goon out there Countrywide should be bankrupt, Wells Fargo should be gone as shoudl BofA, Bear Sterns, and every other bank.

I guess everyone should be out of business except the makes of tinfoil.

-----------

Hey shit for brains...it is coming apart...one can see where we are headed..just walk into the grocery store..the cost of things minus my paycheck...are not adding up...

Signed:

The Tin Foil Hat Makers

Anonymous said...

Hey shit for brains...it is coming apart...one can see where we are headed..just walk into the grocery store..the cost of things minus my paycheck...are not adding up...

Signed:

The Tin Foil Hat Makers

---

I agree. When you make $6.25 an hour and milk goes up 50 cents, it hurts. But you see unlike you McWorkers out there I don't care if milk is up 50 cents or gas is up 50 cents. And most people don't either. Food is such a small part of my income it really doesn't impact me at all.

Stop assuming everyone is a basement dwelling renter making minimum wage like you. Inflation only hurts the poor. If food is up 10% but my stock portfolio is up 7%, I'm still way ahead of the game. You on the other hand have nothing, live paycheck to paycheck and so it hurts you.

Mammoth said...

Am presently working on purchasing the 2.3 vacant acres adjacent to my property, here on the west side of Puget Sound. Spoke to the lender whom I bought 2 houses through in the past, and was told that they no longer lend money for undeveloped land.

So I spoke to a local bank; they are so desperate for business that the mortgage lady actually came to my house last Saturday and spent a hour with us going over all the paperwork. (Note: We’re doing this transaction WITHOUT an agent.)

Here’s the punch line: The mortgage lady told us that after closing, the loan will be sold to no other than the esteemed Countrywide!
-Mammoth

Veronica Lodge said...

RE: Taxpayer bailout of Federal Home Loan Bank...

That's great, just great.

Now the question is, who will provide a bailout for the taxpayers?

V.L.

Anonymous said...

Don't deposit at Countrywide banks and financial centers. Learn more about the national mortgage crisis and Countrywide's role in it. Visit www.dontdepositatcountrywide.info

shitferbrains best friend said...

shitferbrains is just another unemployed daytrader.


You better get off the computer shitferbrains and make the bed, do the dishes and vacuum before your wife gets home or Bertha's gonna kick your ass again.

uknowwhoiyam said...

I've recently heard (from reliable channels) that Countrywide is issuing bonds paying 8-13%. Holy sh*t. How can CFC possibly stay in business paying that rate for cash?

Anonymous said...

Whose an idiot who thinks the 50 cent increase in milk is the problem? Inflation across the board, okay, except for the cost of houses, is the coming problem. Maybe you are healthy now,so you do not have much in the way of service costs,or maybe you have no kids, but, the cost of almost everything is going up quite quickly right now and you have to live in a bubble not to feel that.
I doubt that even people who feel really well off right now won't be affected. I think this is the coming economic headache.

HOUSE2008 said...

According to the goon out there Countrywide should be bankrupt, Wells Fargo should be gone as shoudl BofA, Bear Sterns, and every other bank.

I guess everyone should be out of business except the makes of tinfoil...

Keep in mind it DID happen to the S&L, LTCM ect and there are a few banks already, albiet small ones, that have been taken over by the FDIC recently. Look, the bottom line is if one were to add up ALL the possible savings in America it would come to somewhere between 1-2 trillion dollars. Now here's the fun part. Wall Street alone has leveraged this to the multiple of 10x on MBS & one can see tthe direction this is going & the billions Wall street has lost. As a nation we are B-R-O-K-E. Social security alone is a 45 TRILLION dollor I.O.U. Once you add up ALL the debt that the U.S.A has accumalated, well, it's more like 345 Trillion. It woud take close to 300 years to pay this off. Fun huh? So sufice it to say there isn't enough money in the world to rescue this credit system especially if it were done like your bank account. We'll just lurch from one shiny bubble to the next.....

Unsinkable I tell you! said...

Bollywocks to you I say. If we were truly sinking like all you pobbly-waggers keep predicting, then why am I still enjoying cigars and brandy in the ballroom.

Bubble Bah! In fact I've noticed that I'm looking up more and more because the room is tilting UP not DOWN!!!

HA ha ha. Keep predicting your doom, I'm going outside onto the Lido deck to look at the pretty icebergs! Unsinkable I tell you!

Rhymes with Shunt said...

"I don't care if milk is up 50 cents or gas is up 50 cents. And most people don't either."
------------------
Speak for yourself, you bonehead.

I make $70K/year and these food & gas price increases ARE disturbing to me.

Anonymous said...

The Taxpayers Bail Out of The Federal Bank ....You said it .

When I first found out that the Feds were going to give big loans against this junk paper that CountyWide was a bag-holder on ,I just got sick to my stomach .

Funny how Senators like Charles Schumer alway bring up wrong acts after the fact (on purpose),when Schemer was saying how wonderful the Feds were were providing loans.

The whole plan was for the Feds to give short term loans until the bag-holding lenders(like Countrywide ) could transfer this junk paper to Government backed loans ,after they raised the loan amounts to 1 million .This is the biggest Con job in history .

This whole Fed Loan scheme is so dishonest ,and it's always been how to pass the junk to a new bag-holder (being the taxpayers ).

When inflation eats you alive ,and your taxes are raised to pay for defaults from loans to Countrywide and the like and defaults from government backed loans ,you will feel like you got conned .

Object to it people ,object to the sneaky plan from the Government Workers that are suppose to be serving you . You see, the people who are coming up with this plan are the servants of the public who were asleep on the job when all this faulty lending was happening ,and they were getting money from these fat cats .

Object to the plan to obstruct justice by these elected and appointed officials .

I bet you that our trusted servants have promised all kinds of investors from around the world that they are going to cash them out just as soon as they can get this FHA problem going or Fannie or Freddie .

It's about time that we ask why the Feds thought that giving money to scum lenders holding bad paper was creating liquidity in the market.It was just buying time .

The nerve of these scum lenders and Wall Street institutional loan makers wanting loans at cheap rates on bad paper at the expense of the dollar and inflation costs to us all . How dare they get upset when the Fed Chairman only went down .25. These bastards should be charged 10% against their junk paper at 30% max loan against it .

Object people ,object .