Senator slams Countrywide

We are shocked -- shocked -- that it took Sen. Chuck Schumer three full days to complain about the Countrywide Financial business practices laid out in Gretchen Morgenson's New York Times story over the weekend. Schumer is usually much quicker than that.

As Mark Lacter reports over at L.A. Biz Observed, "the New York senator told the Calabasas mortgage lender today to stop paying brokers higher commissions for steering borrowers to adjustable rate subprime loans - a practice that was outlined in a NYT story over the weekend."  Lacter links to a Dow Jones piece that has no response from Countrywide.

Our take: We thought the bigger headline in the N.Y. Times story -- at least for Washington follow-up, and possible legal trouble for Countrywide -- was this nugget:  "Independent brokers who have worked with Countrywide also say the company does not provide records of their compensation to the Internal Revenue Service on a Form 1099, as the law requires."

It's never good to mess with the IRS. Those guys have zero sense of humor.

Your thoughts? Comments? Insights?
Photo Credit: Reuters

Comments

[Monkey In Chief]

I'm surprised out how gullible borrowers must be. Quoting people who shop around high prices or in this case high interest rates is supposed hurt business as the customers go elsewhere.

It's completely shocking to that borrowers don't get several quotes on mortgages before picking one.

I think the moral of the story is don't get a loan from Countrywide.

[keith]

Being a loan officer there are many reasons for the mortgage problem, one reason lenders doing no documentation loans, appraisal companies inflating home values, loan offiers puting people into loans they shouldn't have becuase they were looking for big commission instead of the looking out for the customers well being,and customers not doing there homework and doing research on the lender they are dealing with.

[sunsetbeachguy]

The tan man (Angelo) or a more descriptive nickname is the oompa loompa CEO, will join Bernie Ebbers and Jeff Skilling at the CEO federal prison before all of this is over.

[pugtv]

Countrywide won't report my income to the IRS? SWEEEET!!!! .... I want to work for Countrywide. Where do I sign up?

[investorguy]

Monkey: most people NEVER learned what questions to ask, or to get multiple offers. Because their parents never did.

[investorguy]

Kieth: I've dealt with several appraisers lately who are just the opposite -- they're erring on the side of undervalue, just to avoid the appearance of overvaluing. I've had to justify every improvement, often with receipts.

[Cal]

investorguy:"Kieth: I've dealt with several appraisers lately who are just the opposite -- they're erring on the side of undervalue, just to avoid the appearance of overvaluing"

But this wasnt what was happening during the boom, the appraiser were supposed to be an important check and balance but were instead just a rubber stamp. Now the secondary market has wised up that not only are the borrowers riskier then they thought, the collateral securing the loan is worth less than thought and in many places declining. The appraisal process getting conservative is just a natural reaction to the loss in confidence by investors in the mortgage system.

[Toby]

"It's never good to mess with the IRS. Those guys have zero sense of humor."

LOL and no patience.

[Problemwithcaring]

@investor guy:

PLEASE - how could appraisers possibly be routinely "undervaluing" homes in this WILDLY overpriced market? Your added crown molding means nothing, if the comps in the area are selling for less and less each day.

Your faux-anecdotes have grown as tired as they are useless.

[Rick Johnson]

Senator Schumer jumps on every issue. He used to be big on gun control also. He just can't stay away from a TV camera.

What is so shocking about a company directing/motivating it's sales staff to sell higher margin products? I say no harm no foul with that one.

If Countrywide has a large scale IRS problem, I would be really surprised. They are a giant company, what motivation would they have not to report broker 1099 income properly?

Why not just ask them for a comment?

RJ

[yours truly, Johnny Dollar]

I wouldn't even finance a used motor home through this guy.