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Lender Bender

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Somewhere along the way, someone failed to notice that collecting bad loans and securitizing them and then securitizing them again (lather rinse repeat) is what got us all in this mess in the first place. It certainly didn't help that we were incentivzing non-market based rates in the ballooning real-estate bubble, but that's not surprising. If you look at the back of the envelope DealBreaker MBS fees calculator its pretty easy to see that a trillion dollars or more poured into "the system" just in fees. Who was going to complain? But, shouldn't we have learned our lesson by now?
Bailing out banks is one thing, and we have our opinions on that in any event, but forcing banks to lend, or otherwise getting into the business of enforcing industrial and lending policy from the floor of the House (or any other political entity) is a dangerous path to take. The likes of Barney Frank have already shown themselves rather poor judges of credit worthiness. What will tip the scales in favor of one or another worthy borrower now? Political influence? Donation appeal? Victim of the week status? Which credit-(un)worthy borrower will the political powers anoint this week?
It is often said that countries get the government that they deserve. Now, with Hope and Change accepting the baton of power today, the prospect of borrowing another trillion or so to build roads and bridges has got the likes of George Soros claiming that the United States is going to have to write down its debt, and we haven't even gotten to our favorite entitlement programs yet. Perhaps we deserve a tax-and-deficit-spend government. For our many sins (flat panel tv gluttony perhaps)?
Or do I have it backwards? What say you, Dealbreaker?


Angelo Mozilo: Countrywide Was The Cadillac Of Mortgage Lenders

In June 2008, Countrywide founder and CEO Angelo Mozilo stood before a group of CFC shareholders and, through salty tears, told them that Bank of America would "reap the benefits of what we have sowed." He wasn't kidding, and in the 4+ years since Ken Lewis paid $4 billion for the place, BofA has had the pleasure of ponying up an additional $40 billion (and counting) in write-downs and legal fees associated with cleaning up Countrywide's messes, while CEO Brian Moynihan has publicly described the acquisition as an albatross around his neck. Additionally, Ang Moz forked over $67.5 million in 2010 to "resolve SEC claims that he misled investors," and separately, there has been talk by some that Countrywide contributed in no small way to the worst financial crisis since the Great Depression. In light of all that, does Ang Moz, have any regrets about the way his company was run? Not a fucking one and if he had to do it all over? He wouldn't change a thing.


Now As Good A Time As Any To IPO An Online Lender

What markets need right now is an online lender with a typical effective APR of 156 percent.