The Center for Public Integrity in a new report, Subprime Players Get Tax Money To Fix Subprime Mess , show the very same corrupt predatory lenders, Countrywide being at the top of the list, are now receiving U.S. taxpayer money to modify mortgages.
Firms that fed off the subprime lending frenzy that devastated the banking system are lining up to collect more than $21 billion in taxpayer funds meant to help bail out borrowers now in trouble on their loans.
The funds come from the federal government’s Home Affordable Modification Program (HAMP), begun in February by the Obama administration to coax lenders into modifying mortgages that might otherwise result in foreclosure. According to a Center for Public Integrity analysis of public records, of the 25 top participants in the program, at least 21 were heavily involved in the subprime lending industry. Most specialized in servicing subprime loans, but several both serviced and originated the loans.
Among those on the list:
- At least two firms that earlier settled charges of illegal collection practices brought by federal regulators; another was placed under federal supervision before voluntarily surrendering its bank charter;
- A subprime subsidiary of top-bailout recipient American International Group Inc. (AIG);
- Two former subsidiaries of Merrill Lynch & Co. and one former subsidiary of Lehman Brothers, investment banks that helped underwrite the subprime boom, and;
- A subsidiary of the now-sold, former No. 1 subprime lender in the nation, Countrywide Financial Corp.
Bear in mind, for prime loans, the current cure rate is 6.6% and less than 30% of home mortgages modified stay in good standing after a year. But more to the point is why do the same cutthroats, even have a job after that and to add insult to injury, get to manage U.S. taxpayer funds?
Go to the link to read the entire article. Public Integrity has multimedia displays, charts, graphs, detailing these subprime lenders and the public funds they have received over time.